Chapter 53: Chapter Fifty-Three: Pork or Poison?

The Silver Mink mouse sold well in the domestic market, with almost no competition, but computers were still considered a luxury in China, and only a small number of ordinary households could afford them.

The largest computer buyers in China right now are government units in Beijing and procurement departments from various provinces and cities; the bulk of sales come from these departments, and major clients of computer manufacturers like Legend and Great Wall are also government agencies, public institutions, hospitals, or large corporations.

Ordinary households still couldn’t afford computers priced at tens of thousands of yuan; even if Silver Mink dominated the entire domestic mouse market, it might only sell tens of thousands of mice per year, and foreign brands like IBM, Compaq, and Apple, even if they sold computers in China, had little interest in partnering with Silver Mink.

Li Dongling hoped Silver Mink could expand overseas; global computer sales were projected to exceed 37 million units this year, while domestic sales—both domestic and foreign brands combined—were under 500,000 units, with the bulk of sales still overseas.

Even if Silver Mink only captured a tiny sliver of the overseas market, its mouse sales would likely far exceed domestic figures!

Hu Zi shook his head, “We haven’t had any contact with overseas computer distributors or agents yet.”

“To enter the overseas market, we need overseas distributors and heavy advertising investment; given our current situation, this would be far too risky.”

Hu Zi spoke, his thinking aligned with the conservative mindset of domestic companies at the time: focus on the domestic market first, and only seek opportunities abroad once domestic profits dried up and growth stalled.

If we rashly entered the overseas market and failed, Dongling High-Tech could suffer serious damage; right now, with Silver Mink’s reputation, aren’t we doing just fine domestically? Why take such a risk?!

Li Dongling glanced around, then looked at Yao Luoying, Chen Tao, Gao Peng, Li Dongshan, and others; apart from Yao Luoying, who seemed to have something to say, the rest clearly agreed with Hu Zi.

“Whether it’s the Silver Mink mouse or the digital cordless phone we’re developing, every future product from Dongling High-Tech must go abroad!”

Li Dongling said, we certainly can’t abandon the domestic market, but for at least the next decade, domestic income and consumption levels still lag behind those overseas.

Cutting grass is possible anywhere, but cutting domestic grass doesn’t yield nearly as much profit as cutting foreign grass—it’s not that domestic grass can’t be cut, but foreign grass offers far better value.

Hearing Li Dongling’s words, Hu Zi and the others stared with open mouths; domestic companies were all fixated on their own tiny patch of land, never daring to openly say they wanted to cut foreign grass like Li Dongling did.

“What about the digital cordless phone development?!”

Li Dongling turned to Chen Tao, who oversaw Dongling High-Tech’s technical department.

Chen Tao quickly replied, “We’re currently developing it, but some technical hurdles remain, and performance testing requires time; however, we can begin pilot production no later than July this year.”

Li Dongling glanced at Chen Tao; this development pace wasn’t fast at all—it was already March 1994, and they claimed July for completion, but R&D was inherently uncertain; a minor issue could delay things by weeks, even months.

“Accelerate development; the technical department can hire more R&D staff, and if you need experimental equipment, purchase it.”

“Also, I plan to have Dongling High-Tech jointly establish a laboratory with Pingyang University and Hanxi Transportation University, with an estimated investment of no less than 15 million RMB, and from now on, we’ll allocate no less than 5% of annual profits to R&D!”

Li Dongling told Chen Tao; upon hearing this, Hu Zi, Yao Luoying, Chen Tao, Li Dongshan, Gao Peng, and the others were stunned.

Dongling High-Tech’s cash flow looked healthy—thanks to the Microsoft settlement and prior satellite dish profits—but Li Dongling was now directly allocating roughly one-seventh of that cash to build a lab, not to mention committing 5% of future annual profits to R&D.

In today’s China, this was shocking; especially among domestic tech firms, which chased profits by sourcing every component overseas and refused to spend a single cent on R&D, seeing it as wasteful—Li Dongling was going completely against the grain.

Investing so heavily in R&D now wouldn’t earn praise; it would likely invite ridicule, especially since the two top executives of China’s most famous computer brand were currently embroiled in internal conflict over whether to invest in chip R&D.

If even China’s top tech companies behaved this way, how bold Li Dongling’s decision was, was obvious.

Dongling High-Tech wasn’t a state-owned enterprise, and its equity faced no disputes; Li Dongling held absolute control, and once he decided something, there would be no bureaucratic delays within Dongling High-Tech.

Establishing a proper, top-tier laboratory for developing new technologies was essential; if Dongling High-Tech wanted to compete with overseas tech firms, it needed its own technology, or it would forever be at their mercy, vulnerable to being choked off at any moment.

Li Dongling felt 5% of annual profits for R&D wasn’t enough; in the future, global giants in pharmaceuticals and tech all invested 15% on average, some even exceeding 25%—technology was literally hammered out by money.

Dongling High-Tech wasn’t there yet, but being able to allocate 5% of profits to R&D was already a huge effort; once stable revenue arrived, Li Dongling would certainly increase R&D investment.

As always, you can’t eat a fat man in one bite; a journey of a thousand miles begins with a single step—starting R&D is better than just buying parts and assembling machines, isn’t it?!

“There’s one more thing,” Hu Zi said, “Should Dongling High-Tech build its own factory or acquire an existing production company to increase mouse output and eventually produce digital cordless phones?”

Building a factory or acquiring one requires heavy upfront investment, but once production begins, costs drop dramatically—you no longer rely on contract manufacturers, and every yuan of profit stays in your own pocket.

Li Dongling thought for a moment and said, “Finance, calculate how much it would cost to build a factory, and also look for suitable production companies we could acquire.”

Seeing Hu Zi and Chen Tao finish their reports, Li Dongling lightly tapped the table, “I have two more announcements.”

“First, Dongling High-Tech will make some management adjustments soon, and new executives will join.”

Li Dongling was giving advance notice; no one was surprised—Dongling High-Tech had operated like a makeshift team, with Yao Luoying, Hu Zi, Gao Peng, and others holding multiple roles, so personnel changes were inevitable.

“Second,” Li Dongling stood and smiled, “You’ve all worked hard lately; the logistics department will purchase TVs, air conditioners, pagers as prizes, and all department staff will receive an extra month’s salary as bonus; department heads and above will receive a 10,000-yuan bonus, and there will be a year-end bonus this December!”

Li Dongling was speaking directly to Hu Zi; when Hu Zi joined, he’d demanded a 50,000-yuan annual salary, which seemed generous, but he never imagined Dongling High-Tech would reach this point—he’d signed a two-year contract, practically a bargain-bin deal.

But Li Dongling wouldn’t treat Hu Zi unfairly; without Hu Zi’s support, Dongling High-Tech might have fallen into chaos while Li Dongling was away; though his salary was low, bonuses and year-end rewards would compensate him.

Hu Zi smiled, and Yao Luoying and the others did too; it wasn’t about how much bonus Li Dongling gave them this time, but proof that Li Dongling wasn’t one of those stingy bosses who hoarded every yuan—he was willing to share even when he made a million.

As Yao Luoying was about to leave the office, she suddenly said to Li Dongling, “Director Li, Deputy Mayor Yao of Pingyang’s Industry and Commerce Bureau will visit our company this afternoon.”

Hu Zi glanced at Yao Luoying but didn’t think much of it; Yao Zhengru and other Pingyang municipal leaders had visited Dongling High-Tech frequently lately.

They were afraid Dongling High-Tech would be poached or moved away; in a city like Pingyang, producing a foreign-exchange-earning company was rare, so they had to guard it tightly, fearing some provincial capital or distant city might steal it away—frequent visits made sense.

Moments later, when Yao Luoying announced to Dongling High-Tech staff that everyone—including recent interns—would receive an extra month’s salary as bonus, a wave of cheers erupted throughout the entire office building.

In the afternoon, Yao Zhengru arrived at Dongling High-Tech with only one secretary, traveling light.

“Director Li, you’re young and talented—the new waves push the old ones forward—you’ve done things we never dared imagine!” Yao Zhengru said, shaking Li Dongling’s hand.

“Mayor Yao, you flatter me.”

Yao Zhengru had visited Dongling High-Tech many times; aside from the digital cordless phone R&D lab, he’d seen everything else, and now he headed straight to Li Dongling’s office.

Seeing Yao Zhengru’s demeanor, everyone knew he wanted to speak privately with Li Dongling and stepped out.

“Lately, Luoying has been causing trouble at Dongling High-Tech!”

Once alone in the office, Yao Zhengru immediately laid it out.

Li Dongling was slightly surprised but not shocked—he immediately guessed the relationship between Yao Luoying and Yao Zhengru: “Mayor Yao, you’re joking; Dongling High-Tech wouldn’t have come this far without Assistant Yao.”

Yao Zhengru studied Li Dongling for a moment, then said plainly, “The city government hopes Dongling High-Tech will stay in Pingyang; we’ll offer maximum support on taxes, loans, land use, and everything else.”

To keep Dongling High-Tech, the Pingyang municipal government was willing to sacrifice years of tax revenue.

“Dongling High-Tech’s headquarters won’t leave Pingyang!”

Li Dongling replied, though the locations of its subsidiaries and labs might vary.

Yao Zhengru understood the implication, but still nodded—he’d take even just the headquarters name; as long as it stayed in Pingyang, it was a huge benefit to the city.

“I came today for another reason—I’m warning you in advance: tomorrow, Mayor Luo will meet you personally; he may bring up the West City Wireless Factory No. 1.”

Hearing this, Li Dongling looked at Yao Zhengru in surprise, unsure what he meant.