One day three years ago, Mr Yuan was in his Keyuan (Source of Science) Restaurant in Peking when friends told him about a group of professors at the Nanjing University of Aeronautics and Astronautics who had designed a low-cost, ultra-light two-seater airplane.
"Since my youth, I have wanted to do something special," he explained. And so, since January this year, Mr Yuan, 39, has been certified as China's only private aircraft manufacturer.
Funded by 22 million yuan (pounds 1.9m) in bank borrowings, Mr Yuan purchased the rights to the Nanjing design and now surveys his production base and new runway at the foot of the Yanshan mountains, north-west of Peking. In the workshop, the company's sixth aircraft has just been assembled, in much the same way as an overgrown model plane would be, by slotting the pieces together. Made of fibre-glass and driven by a rear propeller, the finished product weighs in at only 240kg, reaches a flying height of 3,500 metres, and sells for about pounds 20,000.
Outside the entrance to the administrative block, a group of spivvy- looking businessmen from Peking parked a new Mercedes. They told Mr Yuan they were interested in buying a couple of his aircraft to start a recreational flying centre, and wanted immediate delivery. "That's too quick," laughed a suspicious Mr Yuan.
The question is how can a restaurateur suddenly become a small-plane manufacturer in a country where airspace is still controlled by the military? Mr Yuan grew up in the Cultural Revolution, and started work in 1974 in a state restaurant. In 1986 he bought his own restaurant, and the business took off, selling Imperial-style food.
"I was only a restaurant man. I knew nothing about light aircraft," he says. "But I was already interested in aeroplanes. When I heard about the Nanjing design, I was very happy. I knew transport in China was not very good; so many traffic jams. The automobile industry was developing very quickly, but I thought that light aeroplanes would have a future."
The project has been fraught with delays. It took three years to get permits from the Civil Aviation Administration of China, who had never dealt with a private manufacturer. "I never predicted all these difficulties at the beginning. If I had known, I would never have done it," admits Mr Yuan.
His wife now runs the restaurant, whose profits are used to finance the aircraft company. The biggest challenge is who will buy the small planes, which can be used for recreation, crop spraying, aerial photography and remote postal services. So far, Mr Yuan has received orders for about 30.
To celebrate the return of Hong Kong to China in 1997, the company plans to fly one of its light aircraft from Peking to the former colony, air traffic control permitting.