Anhui company chief cut his teeth in tough Russian trade

PUBLISHED : Thursday, 08 July, 1999, 12:00am
UPDATED : Thursday, 08 July, 1999, 12:00am

The mainland's booming private sector has attracted people from all walks of life and one company boss in Anhui has a background as colourful as any.

Zhang Shengkuan is a tall, imposing man who heads the Hefei Kuan Yue Industrial and Trade Group.

Earlier this year, he distinguished himself by becoming the first head of a private company in Anhui to take over a state firm.

Mr Zhang learned his management skills in the state sector and in one of the world's toughest markets, Russia.

After graduating from college in 1982, he worked for two years as a university lecturer for 50 yuan (about HK$46.60) a month, for two years as a reporter and then as a manager in a state firm which manufactured television parts and telecom equipment.

He left the state sector - 'diving into the sea' of commerce as mainlanders say - in 1993 and set off for Moscow with US$100,000 in capital to set up a trading firm to import snow-proof shoes, eiderdown jackets and sportswear.

'I had been to Canada and the US and realised that in these countries you had little chance unless you had a lot of capital. The Soviet Union had just split and there were many opportunities, like China in 1978,' he said.

Although business in Russia is harder now that hundreds of mainland firms have moved there, Mr Zhang retains his office in Moscow and spends about half the year there.

Meanwhile, his company in Hefei is registered as a Russian investment, qualifying for benefits as a foreign investor.

'I employ 20 Russians and I use an unemployed professor as my interpreter,' he said.

'I shun the company of other Chinese as it is too dangerous. About 30 are killed each year, mostly by other Chinese who know of their success and are jealous.

'The Mafia there are easier to deal with than the police. I give the Mafia $500 a month and receive protection.

'They are available by beeper or mobile phone any time.

'Others pay up to $5,000. They are reliable, unlike the police to whom you have to pay money at any occasion.' Back in Hefei, Mr Zhang has set up his own firm making leather clothes for the US market and, in 1997, moved in to real estate development.

In February, he also agreed to become general manager of a state construction firm with debts of four million yuan, more than double its assets.

'My friend is head of the Construction Bureau which owns the firm,' he said.

'He said that I could take it over, but I didn't want to because I cannot change the way of thinking of the 141 workers. So I use them as contract workers.

'My plan is to turn it into a shareholding company once the value of its assets rises from negative now to zero.

'What it brings me now is a construction licence, which the government stopped giving out in 1997, and tax and other benefits.

'I spend a week per month on the company but receive no compensation for it.' Mark O'Neill