BEIJING - Family firms have been labelled China's economic "invisible engine" by a report released Monday, but it says their role is threatened by the inability of many to persuade the next generation to take over the reins.

Co-presented by the research organs of the All-China Federation of Industry and Commerce, Sun Yat-sen University, Zhejiang University as well as Hong Kong-based family firm Lee Kum Kee, the report features analysis of the development of Chinese family businesses, which it says have become hugely important in China.

However, of 1,014 surveyed entrepreneurs aged above 50, more than 40 percent expressed hope their kids would take over in the future, while only 35 percent of the younger family members confirmed their willingness to do so.

"Many Chinese family companies just had no clear family corporate ambitions or passing-down plans, and they still need to explore more how to sustain their family cultural heritage," said Chen Ling, co-author of the report and a family business researcher with Zhejiang University.

Lack of effective passing-down plans also contributed to the short lives of Chinese family businesses, said Chen.

The average age of 4,309 Chinese private businesses studied through a 2010 survey was only nine, much lower than their Western peers, according to the report.

Li Huisen, a senior executive with sauce manufacturer Lee Kum Kee, said for many Chinese family businesses, keeping growing was more difficult than starting. "How to sustain business development for generations is a question that needs to be answered by all of Chinese family business owners," he said.

The problem is made more pressing by the important part that family business have to play in driving the Chinese economy. Citing figures from a survey done last year, the report said 85.4 percent of China's private enterprises belong to family businesses, in which individuals or families own a controlling stake of more than 50 percent.

Furthermore, of the country's private businesses, 55.5 percent are family firms in which the controlling family members are actually involved in corporate management.

China's family businesses, mostly formed after the country's drive to  reform and open up three decades ago, are mainly based in the east of the country and focus on the manufacturing sector.

In comparison to 1996, when more family firms specialized in the catering industry, by 2009, an increasing number had become involved in wholesale and retail, a trend that tallied with China's economic development, according to the report.

Statistics indicated that 36.9 percent of the 762 listed private companies in China's A-share stock market (which, as of the end of last year, had a total of 2,063 listed companies) were family firms.

The function of family businesses in ensuring market supply, stimulating investment and promoting export has proven indispensable for boosting the Chinese economy, noted the report.

Zhuang Congsheng, vice chairman of the All-China Federation of Industry and Commerce, said the federation will further its research on family businesses, especially successful ones, in an effort to help local family firms to sustain development and curtail the threat of family businesses dying out when their heads retire or pass away.

"The coming five to 10 years will be a crucial period for China's family firms in terms of the passing-down of business," Zhuang said.