Chapter 14 Outdated Products
Seated in a private room of a newly opened hotel in Jiangyin County, Zhang Jianjun returned after ordering the dishes and pulled out a pack of Zhonghua cigarettes, offering them around. However, apart from himself, no one else smoked, so he simply put them away and sat down to chat over tea.
There were seven people in the room. Besides Su Yuanshan, Qin Weimin, and a couple of others, Zhang Jianjun had also invited Wang Chaoxin and Pan Xiaojun, who had just been recruited by Su Yuanshan into Yuanxin.
The food was quickly served. As the host, Zhang Jianjun poured drinks for everyone. When he got to Su Yuanshan, the young man quickly covered his cup and smiled, "Thank you, Director Zhang, but I won't drink alcohol."
Zhang Jianjun glanced at the bottle. "Then how about a beer?"
"I have work to do tonight. My seniors can drink with you," Su Yuanshan said. He knew his senior brothers could hold their liquor, and truthfully, he himself wasn't a lightweight either, but he needed to stay sharp to finish preparations and then rush to Huajing Electronics in Xicheng to fabricate the chips.
Hearing that Su Yuanshan still had work to do, and considering his young age, Zhang Jianjun didn't insist. "Waiter, bring a Coke for him!"
"No need, I'll just drink tea and accompany everyone."
...
After the first round of drinks, the atmosphere loosened up. Following Pan Xiaojun's explanation, both Wang Chaoxin and Zhang Jianjun were full of admiration for Yuanxin's ability to develop software even better than foreign products, especially software so closely tied to their industry.
"Brother, we really owe you one," Zhang Jianjun said, filling Su Yuanshan's teacup and standing to toast him. "Let me toast you a cup!"
"It was nothing," Su Yuanshan stood and smiled. "I'll toast you back with tea instead of wine, hope you don't mind."
After draining his cup, Zhang Jianjun sighed. "You have no idea, brother. Our factory has been shut down for so long. If we don't restart production soon, we won't even be able to put food on the table."
The word "again" caught Su Yuanshan's attention. "Director Zhang, is your factory a restructured one?"
Since the 1980s, China had experimented with corporatization reforms in the Special Economic Zones, but the real wave wouldn't come until after 1992. For instance, Jiangyin Factory would be restructured and renamed the following year, with Wang Chaoxin officially taking the helm.
"No, not exactly a corporate restructuring... more like a lease," Zhang Jianjun said with a bitter smile, explaining his situation to Su Yuanshan.
It turned out Zhang Jianjun's factory was called Jiangyin Radio Factory, a thirty-year-old state-owned enterprise under the county government. It had been losing money for years and had been shut down for nearly a year, with workers' salaries unpaid for six months. As someone who had grown up in the factory community, Zhang Jianjun felt emotionally attached to it. After making money in the South Island real estate boom, he decided to return and try to save the factory, at least to help his fellow townsfolk get some wages.
This heroic personal dream was admirable, but reality was cruel. After exhausting all efforts to secure management rights and failing, Zhang Jianjun came up with a clever solution: he created a shell company and, through hiring and leasing, gained control of the factory's workers and equipment.
This way, the government got rid of the burden, still received some income, the workers got paid, and kept their official employment status—a triple win.
However, since it was a "lease," every day they delayed reopening meant bleeding money.
After listening to Zhang Jianjun's story, Su Yuanshan fell silent.
He knew that Zhang Jianjun's plan was... rather naive. Even if his improvements worked, the larger trend was unforgiving: tape recorders were already outdated, even in China.
"Didn't expect you to have such a heroic spirit, Director Zhang," Qin Weimin said, smiling as he raised his glass.
Zhang Jianjun quickly stood to clink glasses with him. "Master Qin, you're too kind. Compared to you guys, I'm just scraping a bit of socialism's wool."
Hearing the phrase "heroic spirit," Su Yuanshan fell into thought for a moment, then smiled faintly and asked, "Director Zhang, before you decided to make tape recorders, did you do any market research?"
Zhang Jianjun nodded. "Yes, when I returned from the South Island, I observed along the way. There's still some demand for tape recorders in rural areas, especially in remote mountain villages."
Su Yuanshan pursed his lips thoughtfully. "I'm not an expert on markets, especially traditional ones. But there's one thing, Director Zhang, that you might need to reconsider."
"Oh? What's that?" Zhang Jianjun asked curiously.
At that moment, Wang Chaoxin, who had been chatting with Tian Yaoming, also turned to listen.
Su Yuanshan slowly rotated his teacup and said, "Nowadays, markets are no longer purely driven by consumer demand. In the past, if people needed vegetables and meat, we grew vegetables and raised pigs. If people said they couldn't buy meat, we raised more pigs."
"But with technological progress, many new markets are born from products that consumers didn't even know they needed. You create something new, people find it useful, and that's when the market forms. Mobile phones, pagers, even TVs and tape recorders—these were all born from technology, not from ancient human needs."
"As someone in technology, I deeply understand how fast things are evolving. In the computer industry, there's a thing called Moore's Law—every two years, computing power doubles. This has held true for decades, and it's not just computers; the entire semiconductor industry's capabilities and architectures are advancing rapidly."
"In fact, Director Wang should have firsthand experience. Jiangyin Factory used to produce single transistors; now it makes integrated chips. How many times has performance improved?"
Wang Chaoxin looked at Su Yuanshan deeply, then glanced at Zhang Jianjun, finally sighing heavily. "Old Zhang, I didn't want to say anything earlier because you were so enthusiastic. But honestly, I agree with Xiaoshan. Tape recorders have no future."
Zhang Jianjun froze.
Seeing everyone around the table nodding in agreement, he suddenly panicked a little.
After all, he was the only one at the table with just a middle school education. The others were at least technical school graduates, and many had master's degrees. Although he had made money, that was from flipping real estate, which didn't require technical knowledge—just guts and luck.
Returning home to run a factory had been his attempt to find a more stable path after getting scared by the real estate bubble. But now, facing real technology players, how could he compete?
Zhang Jianjun looked around the table, finally locking eyes with Su Yuanshan. "Then... what should I do?"
At that moment, Pan Xiaojun, who had been quietly sipping his drink, said lazily, "Anything is better than making tape recorders. A Walkman-type portable music player would be a good direction."
Su Yuanshan raised an eyebrow, once again impressed by Pan Xiaojun's sharpness. He nodded. "Exactly. If you insist on staying in the audio business, make Walkmans. But if you're willing... you could also partner with us to make pagers."
Originally, Su Yuanshan had planned to find partners in Shenzhen or Shanghai for the pager project. Once he produced a working prototype with Chinese display, finding investors would be easy.
But after observing Jiangyin's conditions today, he realized this place might be better.
In the future, although Shenzhen and Dongguan would become major electronics hubs, Jiangyin and Wuxi had always been strongholds for integrated circuit industries.
Zhang Jianjun was a bit lost. "Pagers?"
"More precisely," Su Yuanshan explained, "pagers that can receive and display Chinese text messages. One of the small chips we're producing on this trip is the screen display driver for it."
As he spoke, Su Yuanshan looked at Wang Chaoxin. "From the decoder chip for the pager to the encoder chip for the paging station—all proprietary designs by Yuanxin. Sorry, Director Wang. We had originally planned to tell you tomorrow."
With a loud clatter, Wang Chaoxin's chopsticks fell to the floor.
Thank you for the support, friends. If you want to read more chapters in advance, go to my Patreon.
Read 20 Chapters In Advance: patreon.com/Albino1