Age of Legends

Chapter 240 The Entry Plan
"So the general truth is out. Zhou Ping really wants to have a say in the technology within the joint venture, so he wants to get you, Dad, to be the one to lead the charge. Is having a say in the technology really that important? I mean, can he actually do it?" Zhang Zhonghua was just a former engineer who had been reassigned. Given Zhou Ping's current influential position in the company, it was surprising to Zhang Chen that he would specifically seek out Zhang Zhonghua, unless there were benefits he couldn't refuse.

His father said, "Of course it's important. Technological influence means profits. Without it, we can only earn a meager OEM fee, and at least 70%-90% of the profits will be taken by foreign companies. Take the Beijing Panasonic CRT factory, for example. Because it uses all Panasonic technology, the Japanese side takes a 70% cut for every CRT they sell. Many core technologies are obtained from others, and the conditions are even more stringent. The key is that you have to put up with their treatment and be completely controlled by them. This is because it involves the issue of technical standards."

"Whoever controls the technical standards controls the transformation of production lines, the transformation of suppliers, and the licensing of patents. Every link in this chain can leave you speechless, and profits are squeezed out bit by bit. Domestic factories have a history of rebelling against this. Huaguang Company broke through its self-developed core technology, and Samsung was forced to open up its shadow mask patent to its joint venture. This is the importance of technological dominance."

Zhang Chen nodded and then asked, "Dad, has your patent application been approved? Have the technical details been published?"

Zhang Zhonghua said, "Of course."

Zhang Chen said, "Then I understand. The foreign companies that Zhou Ping and his team contacted must have discovered that their technical parameters were inferior to your FD29. That's why they were confident that you could bring the technology back and gain a voice. But they didn't expect you to fall for their trap, and their wishful thinking was immediately thwarted."

Huang Huifen said, "They'll only end up losing more than they gain! We won't give it to them!"

This is my own mother. She was complaining before that Zhang Zhonghua didn't take the opportunity to get back to his original position and reach new heights, but now she's changed her tune and turned her guns on the outside.

Zhang Chen shook his head. "Dad, to be honest, the current CRT flat-screen TV technology will eventually be replaced by LCD technology. What you've developed now may be core technology, but it's still a long way from being put into production. Even if you can find a manufacturer that needs it, you'll still need to contact the company that plans to develop a 29-inch flat-screen TV production plan. But these companies often have path dependencies and plans in their production plans. It's not like you can just suddenly approach them and they'll abandon their original plans and suppliers and switch to producing your product."

“I understand what you’re saying…” Zhang Zhonghua nodded.

“FD29 is your life’s work, but its creation is a very long process, and it may never even be completed. Do you agree with that?” Zhang Chen said.

Zhang Zhonghua found it strange. Although he understood Zhang Chen's growth and "awakening," the current Zhang Chen seemed to have eyes that could see through the world, patiently guiding him. But this strange feeling was replaced by the deep thinking guided by Zhang Chen.

“Instead of wasting time and effort searching, we should seize the opportunity at hand and get the greatest benefit,” Zhang Chen said. “Moreover, this may be the most likely opportunity right now to bring FD29 into production.”

Huang Huifen watched intently, her eyes wide. She was staring at Zhang Chen, the same Zhang Chen who, when the company was short of funds, had turned to Liu Qi of Yipin Real Estate, a competitor, and secured a 30 million yuan investment in exchange for ten years of commercial operation rights. Afterwards, Chen Xuran lavished praise on Zhang Chen in front of her.

Now Zhang Chen is doing the same thing, and instead, he's advising Zhang Zhonghua to head-on into those storms.

"So, what do you mean by persuading Dad to do?" Zhang Zhonghua found it interesting and stared at Zhang Chen. "I heard from your mother that their company had a problem with a 20 million yuan bank loan. You and Aunt Chen went to Liu Qi and asked him for 30 million yuan. I see you've gotten too big for your britches now. So tell me, what should I do now to shut down the company?"

“It’s not that the company is closing down, but rather that you’re trying to get promoted to management in the new company, or at least become a partner. That way, the people in your current company can join you,” Zhang Chen said.

“You’re overthinking it!” Zhang Zhonghua said. “You want me to use FD29 to invest? There are regulations in the state-owned enterprise reform that state-owned enterprise employees cannot directly hold shares in Sino-foreign joint ventures. Only technical backbones can hold a small number of shares in the parent company through the employee stock ownership association, but those are very small, a fraction of a percent.”

Zhang Chen then asked, "Could you, in your personal capacity, license the technology to the joint venture, collect a percentage of sales revenue annually, and then use an offshore company to inject that percentage into the joint venture in exchange for shares?"

Zhang Zhonghua's eyes widened. "Where did you learn about these techniques?" "I read some extracurricular books, about how some entrepreneurs operate. Haha, can it really work?" Zhang Chen laughed.

“Don’t read these kinds of miscellaneous books. Did these books tell you about the fate of that entrepreneur? This is illegal and will lead to audit risks later. Do you want your father to go to jail? Especially Zhou Ping and his ilk, do you think they can just watch me use this method to get shares? Exchanging technology licensing for sales commissions is enough to make them envious. When they report me and the audit bureau comes down, I definitely won’t be able to escape!” Zhang Zhonghua said.

Zhang Chen realized that his father was indeed a very proper and disciplined person. This personality had prevented him from achieving great success, but it also prevented him from making any major mistakes. Otherwise, if the previous chairman of Nanguang Company had been involved in embezzlement and implicated a large number of people, his father, who was in charge of a technical line, would have had a hard time escaping punishment. This was probably also why Zhang Zhonghua was not well-liked.

At this moment, Huang Huifen seemed preoccupied and suddenly asked, "What if you can't get the funds back with this technology? What about your loan? What about the loan the government gave you...?"

Zhang Chen noticed that he and Zhang Zhonghua looked at each other at the same time, as if a sudden flash of inspiration had struck them.

Zhang Chen jumped up and hugged Huang Huifen, exclaiming, "No wonder you're such a lucky star, Mom!"

Huang Huifen was somewhat flattered, wondering what she had said that made the two men so happy.

"What...what happened?"

Zhang Chen smiled and looked at Zhang Zhonghua, "Dad, the person who approved your loan was your classmate from Xida University, Xi Mingrong, who is now the vice mayor and director of the Development and Reform Commission, right?"

Zhang Zhonghua remained silent, clearly deep in thought. This wasn't important; Zhang Chen had only posed a question, so he offered a possible solution: "So, if you pledge the FD29 technology patent to the State-owned Assets Supervision and Administration Commission (SASAC) in Rongcheng, establish a SASAC-controlled company, and then use this SASAC-controlled company to enter the joint venture between Nanguang Company and foreign capital, wouldn't that achieve our plan to get involved?"

After a long deliberation, Zhang Zhonghua nodded. "It's feasible. We can give it a try. But can we really be sure that LG's technology is inferior to my FD29?"

Zhang Chen smiled and said, "Dad, you need to have confidence in yourself. Otherwise, how could someone like Zhou Ping change his attitude so drastically?"

This involves analyzing the other party's behavior to uncover the truth. However, if the truth isn't revealed by revealing the cards, Zhang Zhonghua still prefers to play it safe.

Zhang Chen, on the contrary, was extremely excited. Neither Nam Kwong Company nor LG Company, which was about to invest, were easy targets. Zhang Zhonghua wanted to use FD29 to enter Nam Kwong Company, to gain technological dominance, and to gain a voice. However, he was weak and alone, and might very well be devoured by these two parties, leaving nothing but bones.

However, if there is official involvement, then it's a different story. If one's father is backed by the State-owned Assets Supervision and Administration Commission, the strategic significance is completely different, and one is fully qualified to sit at the table and play the game.

Zhang Chen thought to himself, "Just wait and see what happens to Zhou Ping's group and the foreign investment company LG that's planning to come in."

If Zhou Ping and Ding Shenghua knew that Zhang Chen and Zhang Zhonghua had analyzed so much about their interception of Zhang Zhonghua's demand for the patent, and had even devised a strategy to break the deadlock, they would definitely regret it!

(End of this chapter)