IN China, the term fu er dai - rich second generation - is a conventional appellation for children from affluent families. But there's another name that better defines their responsibility - shao shuai.

Shao shuai - literally, young marshal - refers to those who continue, or are supposed to continue, their parents' business. Compared to fu er dai, which usually refers to a group living a luxurious lifestyle, shao shuai has more positive connotations, often applied to young future entrepreneurs.

Zhejiang Province, known for its private economy and wealthy entrepreneurs, has an abundance of shao shuai, who are young, rich, and in most cases, better-educated than their parents.

Statistics show that there are some 6 million medium-and-large-scale private enterprises in the province facing a situation of finding a successor in the next five to eight years.

Yet having offspring take on the family company is not as easy as putting him or her into a CEO office. Rather, it's a long process that involves many considerations - including whether the second generation is willing, or capable, of taking on the company.

Other problems include, if there is more than one child, who should take the seat? And what if the first and second generations have a big fall-out on running the enterprise?

With these questions in mind, Shanghai Daily visited Zhejiang Shao Shuai Society - Zhejiang Young Entrepreneurs' Club - an association based in Hangzhou that helps young, rich second generation make a smooth transition to running the family business, and meets first generation entrepreneurs and shao shuai to hear their experiences.

The society has more than 70 members, aged between 18 to 35. Two thirds of members are children of Zhejiang entrepreneurs whose companies each own property of more than 100 million yuan (US$15.7 million), while the rest are young entrepreneurs who own companies with property of more than 50 million yuan.

Society activities include lectures, forums and business trips, plus social activities such as golf, diving, hunting and cocktail parties.

"It's a common phenomenon in Chinese communities that entrepreneurs prefer to have their children take over the company rather than hire professional managers," says Professor Zheng Jingpu, chief expert of the Family Enterprise Study Center in Beijing, and a consultant to the Zhejiang Shao Shuai Society.

Zheng says some entrepreneurs let the years pass without forming a succession plan. "Many do not realize that they need a successor until they are old - they should have a strategy in place years before," he explains.

With so many possible pitfalls, succession is often fraught with difficulties, as the example of a family running a furniture factory in Ningbo City illustrates.

Extreme story

"My son shouted that he wanted to kill me, because I didn't buy him a Porsche," the father sighs as he recounts his tale.

The entrepreneur's son deemed that a father should take care of a son - in other words, give him money whenever he wants it.

The father, who built his business from scratch over 20 years, planned to pass it on to his three sons. But this hopes ended in disappointment.

The eldest son studies abroad. However, he cut class for three months, and the first the father knew about it was when the college called.

His second son had worked as a public servant, but quit and ran his own business years ago. He would rather continue on his own path than succeed his father.

And the youngest son - the one who wanted to kill his father - proved a bitter disappointment.

It is an extreme story, but tells a tale: among the offspring of entrepreneurs, some are spoiled; some are not willing to take their parents' business; and some are not capable.

According to a report which took 182 outstanding family businesses in the country as respondents and was issued by a panel from Shanghai Jiao Tong University earlier this year, only 18 percent of entrepreneurs' offspring take the initiative to continue in the family business. The rest do not want to take on the business or accept the task only because they feel obliged to.

The report also writes that the average age of bosses who established enterprises after China's reform and open policy in 1978 is 52, meaning most need to consider their successors.

Jiang Zhuoyin, 20, is the son of the boss of a large chemical plant in Hangzhou and a sophomore student at University of Delaware in the United States, studying finance. He wishes to start his own finance company, but says he will take on the chemical plant if his father asks him to.

"I am not really interested in the industry, but have to take the business because I am the eldest son," says Jiang.

Showing his entrepreneur credentials, Jiang has already established a venture importing cars from the United States, which is doing well.

But while Jiang shows initiative and is prepared to take on the family business, experts say some offspring of entrepreneurs are less driven.

Professor Zheng says "people cherish things they don't have, and first-generation entrepreneurs carved out businesses because they needed money.

"But rich kids are more likely to pursue ideal things since they are allowed more life options."

Being in the shadow of a parent also plays a part. Li Jun, director of Beijing University Corporate Inheritance Research Institution, says "the second generation may think it's due to their fathers' contribution if they run the company well, but it will be their fault if they fail."

However, Zheng argues that the claim that only 18 percent of entrepreneurs' children take the initiative in taking over the family business is misleading. Shao shuai who use family money to start a new venture or upgrade or diversify the business are equally valid ways of succeeding, says Zheng.

"Shao shuai are a large group, many with overseas education and hence their own perspectives," he adds.

Seeking change also provides a source of friction. While the many Zhejiang enterprises produce small items - such as zippers, buttons and lighters - many young people are keen to move to other products.

Jin Jin, whose father's group in Shaoxing boasts three listed companies, ended up quarrelling with his parents when he decided to start a software company.

"My parents have traditional industries, like textile and printing, which invest a lot but earn not much, so I thought I should move into a new industry," recalls Jin.

The then 21-year-old college student, with only 5,000 yuan (US$785) as start-up capital, made his first 10 million yuan within three years through an online Internet game cards business, and then running an Internet game company in Hangzhou.

"Shao shuai should be encouraged not only in taking on the company but also starting up businesses," says Zheng. "Creativity should always go hand-in-hand with handing over businesses."