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SCMP Reporter

AT 39, Zhang Hongwei owns a business conglomerate with 46 subsidiaries and with total assets of 1.5 billion yuan, including a company listed on the Shanghai Stock Exchange.

  ''At my age, Li Ka-shing had not yet achieved what I have achieved now. So when I reach his age, I am quite sure that my achievement will be bigger than his,'' says Mr Zhang.

   Last year, 13 of his companies were listed on the Shanghai Stock Exchange under the listing vehicle, Orient Inc, which has assets of 105 million yuan and businesses covering real estate, manufacturing, tourism and trading.

   Reputedly one of the richest men in China, Mr Zhang would not disclose his personal fortune.

  ''If I tell you how much money I have, the triads would go after me soon,'' he joked.

    Last year, group profit after tax was 100 million yuan, with 50 million yuan coming from the listed company.

   This year, profit after tax for the group is expected to top 200 million yuan, including 100 million yuan for the listed vehicle.

  Mr Zhang is not shy about his ambitious plans for his business empires. ''For three consecutive years, the size of the company has been doubling, and this would be the model for our development in the future,'' he says.

   By 1998, the 20th anniversary of the company, the net asset value should exceed 10 billion yuan and, at its 30th anniversary, the net asset value should reach US$10 billion, entering the ranks of leading global conglomerates, he says.

    The key to the group's rapid expansion has been by merger and takeover, both inside and outside the country.

   In China, the company will take over state-owned industrial giants, and float them on stock exchanges after repackaging. Overseas, Mr Zhang does not rule out buying listed companies in Hong Kong.

   ''I have to use the takeover as a means of expansion, because it is too slow to expand your business empire by relying solely on business operations,'' he says.

   Born on December 26, 1954, Mr Zhang shares the same birthday as late Chinese leader Mao Zedong. However, he was a victim of the Cultural Revolution initiated by Mao.

   Originally a resident of Harbin, at 18 Mr Zhang was sent to the country to work as a farmer because his father, a government official, was labelled a rightist.

  ''Because of my background, I was not even allowed to join the People's Liberation Army and to continue my education. The most painful thing in the world is that you are looked down upon by people around you,'' he said.

  ''During the years in the countryside, I was not resigned to my fate. I had a strong will to achieve something because I felt strongly that I did not belong to the land,'' he said.

   He started to learn how to draw construction blueprints with an uncle who was also sent to the countryside because of links with the Nationalist government before the Communist takeover.

   Shortly afterwards, Mr Zhang formed a contracting team with fellow farmers and started working on small projects.

    ''Because of my political identification, I was not allowed to enter the border area to carry out the construction projects,'' he said.

   After four years, he realised that if he wanted to tackle bigger projects, he had to go to Harbin.

   With 700 yuan, Mr Zhang arrived in the city hoping to find contracting work for his team of 50 people.

  To convince companies to contract the team on construction projects, Mr Zhang had to accept the condition that if the project was not satisfactory, the workers would not get paid.

  Soon the team had a string of projects and, in 1984, it was established as Harbin Orient Construction and Engineering Co.

  In 1988, it was chosen as one of the first four companies in China to carry out a shareholding experiment alongside Shenyang's Brilliance, Guangdong's Wanbao, and Beijing's Stone. The June 4 crackdown stopped the experiment, but it was resumed shortly afterwards.

 1990, the company issued shares to the public and late last year it was listed on the Shanghai exchange.

   ''We are the first listed enterprise which does not have a single state-owned share, the first one whose old and new shares are listed simultaneously, the first one whose parent company is also a shareholding company, and the first A-share listing whichemploys a foreign accounting firm,'' said Mr Zhang.

   KPMG Peat Marwick was employed to audit the group's books and, although the cost was more than 10 times that charged by mainland firms, Mr Zhang said it was worthwhile because the company could save more when preparing for B share or H share issues.

    ''The auditing exercise provides us with an opportunity to examine our strengths and weaknesses in accordance with internationally accepted criteria, so we know how to improve ourselves,'' he said.

    The parent company is empowered by the government to go into international trade and establish a finance company, giving it the necessary power to fully expand its business.

   Among the 46 companies under the Orient umbrella, 17 are based outside China, most in the Commonwealth of Independent States, with some in South Korea and Japan.

  Mr Zhang says the group will focus its development in Heilongjiang, Beijing, Shanghai, Dalian, Shenzhen and Hainan around its core business of finance, real estate, trading and manufacturing.

     It will also expand its business in tourism and is building a skiing centre for the Asia Winter Games, to be used as a holiday resort after the games.

   Mr Zhang is an active member of the Chinese People's Political Consultative Conference and the All China Federation of Industry and Commerce.

    ''You have to take part in politics because politics and business are inter-related. The non-state-owned sector has to be represented in the political arena,'' he said.

   ''In China, doing business is different from doing business in other places; you only spend 30 per cent of your effort on business, the other 70 per cent is spent on dealing with all kinds of inter-personal relationships'' he says.

    However, Mr Zhang is confident that Chinese businessmen will be more competitive than their counterparts in capitalist countries.

  ''We are familiar with both systems, and can face the two systems with ease,'' he said.



Tycoon Zhang sets personal aim of out-achieving Li Ka-shing