A successful share offer has proved the worth of AviChina and its notoriously media-shy chairman CHINA'S STATE INDUSTRY bosses are notoriously media shy and Zhang Yanzhong, chairman of AviChina Industry & Technology, is no exception. So it was a pleasant surprise to be granted an audience with the head of the aviation and automobile firm's $1.94 billion share offering. Listing candidates need to tell their story but it was no mean feat attaining the crisp 15-minute interview with a representative of such a key state-owned enterprise, especially since AviChina is a subsidiary of Avic II (Aviation Industry of China II), a key player in the country's military-industrial complex as the maker of both military and civil aircraft. As a producer of commercial minivans, helicopters and regional jets, AviChina holds some of its parent's most profitable assets. Top brass at other sensitive 'pillar industries' such as the oil triumvirate PetroChina, China Petroleum & Chemical and CNOOC rarely offer themselves up for media questioning. A quick scan of Chinese-language press over the past year confirmed the low profile of Mr Zhang, who is Avic II's party secretary and president as well as a research professor at the Chinese Academy of Engineering - a highly regarded position in the Chinese science and technology field. Other than sporadic articles by state-run industry media such as China Aviation News, he has only once been interviewed by the Hong Kong media. One personal snippet of information gleaned from a China Aviation News article was that, in 1984, Mr Zhang became the first mainland student to receive a PhD from Cambridge University's elite Trinity College since 1949. He said that a number of his Cambridge classmates went on to be senior captains of industry in Hong Kong. 'Had I gone overseas I could have become a big boss, too,' he was quoted as saying in March. Speaking four days after the completion of China's first manned space mission, the aeronautic scholar was welcoming, relaxed and even humorous, despite being flanked by five aides intent on scrutinising each question. Despite having 40 years' experience in the aviation field, Mr Zhang played down descriptions of him as a father figure in the mainland's advanced-engineering field. His caution is understandable given the sensitivity of Avic II's military aircraft business. His utterances are under constant scrutiny by his bosses in the State Council. According to an oil industry executive, all press articles on the country's oil firms are read by party officials at the central government, so officials cannot afford to be misquoted or make comments that are out of sync with the party line. Bosses of state firms almost never give personal interviews, as they are not supposed to draw public attention to their personal lives as a result of their work. Mr Zhang was, however, prepared to talk about overstaffing at state firms and the likelihood of staff reduction among AviChina's around 30,000 staff and Avic II's 210,000. 'We do not want to have too many staff and we do not want our staff costs to be too high,' he said. 'At the moment, our business is growing relatively fast, so our staff count [can be] maintained at a steady level but we do not rule out the possibility of staff reduction should we introduce a higher degree of automation. 'The aim is to improve productivity and increase returns to shareholders,' he added as a sales pitch to prospective investors. When probed on the company's likelihood of following in the footsteps of some fellow state enterprises and introducing overseas talent, Mr Zhang said: 'We have not started public scouting for foreign talent but I think this is a good development.' He added the company hoped to increase its interaction with foreign peers. China has been making aircraft for more than 50 years but it started developing its civil aircraft industry only recently. Last week, AviChina agreed to form a joint venture to manufacture aircraft with the world's second largest aeronautical equipment maker, European Aeronautic Defence and Space (EADS), which owns 80 per cent of Airbus Industrie. As part of the deal, EADS is buying new AviChina shares equivalent to a 5 per cent stake, which deepens the 20-plus-year relationship between the two firms. Under another joint venture, to make regional jets, AviChina has sent more than 50 staff to train at Brazil's Embraer - the world's largest maker of aircraft with capacities of between 30 and 90 passengers - while Embraer experts are working in AviChina's jet operation in Harbin. So how did the exchange go? 'The [extremely cold] weather is a bit of a problem [for the Brazilians],' he said. 'Their Portuguese-speaking children are going to school in China but that is not a problem, we are very open [in the northeast].' One thing Mr Zhang was particularly proud of was the fact that his firm had had in place a performance-based compensation system for over a decade. The scheme not only applied to management staff but also technical experts in both its vehicle and aviation operations. However, the company has not yet introduced share option schemes for management but is considering doing so. Due to regulatory complications in the issuing of options, some state firms are granting managers 'mock' share options, which pay them a reward without actually having to issue any shares. When asked whether, at 63, Mr Zhang would consider retiring from the group after the listing, he side-stepped the question by saying: 'Everybody will one day retire. Even you will retire some day.' What about becoming a full-time academic in the future? 'I have not given up academic work even now. I am an academician of the Chinese Academy of Engineering, this is a lifetime honour. I have published 11 books, including an English-Chinese dictionary of aeronautics terms.' Biography Zhang Yanzhong, 63, is chairman of AviChina Industry & Technology. He also is the party secretary and president of AviChina's parent company, Aviation Industry of China II. Mr Zhang won distinction at tertiary education level by becoming the first mainland student to receive a PhD from Cambridge University's elite Trinity College since 1949. Now, he is a research professor at the Chinese Academy of Engineering - a highly regarded position in the Chinese science and technology field - and has published 11 books, including an English-Chinese dictionary of aeronautical terms.