Those Years When I Was Forced to Top the Forbes List

Chapter 250 Locking in the Order
An hour later, at the city government.

The two walked closer as they chatted.

"This supermarket is a good choice to bring in."

“I have always been very optimistic about Pang Donglai, but the support from those companies needs to be done step by step. Right now, only products from about twenty factories are on the shelves. Most of them still need to make improvements to their products and production lines. I estimate that the annual sales of this Pang Donglai store are at most three or four hundred million yuan. They are still in the stage of building their reputation. For their sales to really take off, I guess they will have to wait until the big stores open.”

"Three or four hundred million? A million a day is very good! I think the greater significance lies in the overall upgrade of Chongqing's service industry!"

"Don't get your hopes up too high. The comprehensive upgrade of the service industry is about raising public awareness of consumer protection, which will take a long time. I think it's possible that it will cause a collective boycott by the service industry in the short term. At that time, you'll have to use the government's power."

"Government power. Haha, I see there's something behind your words."

As soon as the office door opened, Leader Huang entered, followed by Chen Xuebing. The desk was cluttered with documents and some untidy mess.

Chen Xuebing glanced at the documents and saw words like "chip industry" and "communications" on them.

He was right; Lao Huang had gathered a lot of intelligence in the past few days.

Leader Huang didn't shy away from the topic and even picked out a copy of "Chongqing's Six Major Industry Plans" from the table and handed it to him.

Chen Xuebing flipped through it and smelled the fresh scent of ink; it was clearly freshly printed and packaged.

Automobiles and motorcycles, equipment manufacturing, chemicals, materials, and energy.

Electronic information.

This section also includes "3G" and "communication".

Upon seeing this, Chen Xuebing raised his eyebrows and chuckled lightly.

"No financial industry?"

Leader Huang wasn't going to bother joking with him: "Finance serves industry!"

Chen Xuebing was silent for a moment, then said very directly, "Zhanxun cannot move to Chongqing."

"I know," said Leader Huang without looking up.

"You know?" Chen Xuebing asked, somewhat surprised.

"Isn't it just that Shanghai offered a bunch of conditions to entice Spreadtrum? I can know about Kan Zhidong's affairs, but I can't know about this?"

Huang's rhetorical question left Chen Xuebing speechless.

That makes sense. They were transferred from Shanghai, so it wouldn't be difficult for them to thoroughly investigate Spreadtrum.

"That's not all. There are also market reasons. Chongqing can only manufacture PCBs (circuit boards) and doesn't have a complete industrial chain. Spreadtrum can't really operate here."

"That's not necessarily true." Leader Huang chuckled. "Chongqing's manufacturing base isn't as weak as you think. Next year, we'll be bringing in a batch of computer manufacturers, and the support for high-tech industries will be unprecedented. It's not just about corporate policies, but also personal policies. For personal income tax, we can refund up to 16% to 18%. Except for the portion collected by the central government, we'll refund the rest. I plan to include the 3G communications industry in these preferential policies as well."

Hiss.

Chen Xuebing gasped.

Individual income tax refund?
This policy is quite aggressive.

要知道高科技人才收入都很高，月收入5000-20000的部分税率是20%，2-4万是25%，4-6万30%10万以上是45%。

Of this, local governments take 40% and the central government takes 60%.

If we calculate based on Lin Bin's monthly salary of around 100,000 yuan plus bonuses, and using a quick calculation of 80,000 to 100,000 yuan, we would deduct around 10,000 yuan, leaving 30,000 yuan in taxes to be paid.

This doesn't even include the 1000 million shares and dividends that Lin Bin is entitled to.

The local portion will be fully refunded, meaning that wages alone will be reduced by 12,000 yuan.

For amounts exceeding 100,000, you'll enjoy even greater discounts.

If it were him...
Well, he doesn't have to pay income tax.

At least until the introduction of CRS (Common Reporting Standard) in 2018, it was not necessary; the BVI had already circumvented it.

He doesn't even need to use BVI right now, as the company's main income comes from the stock market, and he didn't have to pay taxes before 09.

Once other businesses are up and running, apart from necessary regular dividends, all the profits can be kept for the company's development. You can buy anything through the company, and if you really need something, you can borrow from the company or take out a loan. After a certain period of time, you can use BVI customer transactions to balance the accounts. There is no need to use any tricks such as family offices or segregated companies.

As long as he pays the company's value-added tax and income tax properly, he will be a tax pioneer.

But this reduction is a real benefit for employees whose income must be deposited into their personal accounts.

If the income remains the same, many employees would probably want to come.

When Leader Huang saw the change in Chen Xuebing's expression, he smiled slightly.

“In addition, other places offer a three-year 50% reduction, while we offer a three-year exemption and two-year 50% reduction. Within the first three years, we fully subsidize the local portion of the value-added tax and fully exempt income tax. The fourth and fifth years offer a 50% reduction.”

Leader Huang spoke with great confidence, much more decisively than when he was stingy and reluctant to discuss value-added tax in Hefei.

Chen Xuebing clicked his tongue inwardly as he listened.

It is a municipality directly under the central government after all.

Chongqing is inherently more attractive than most cities, so implementing this policy is a major strategic move.

Shanghai had tried it before, but that was for Sino-foreign joint ventures and foreign investment. Moreover, most of their high-tech enterprises had been established for several years and were no longer new. The tax exemption period had expired, so it would be difficult to implement it.

If they poach talent like this, the decline of Chongqing's technology industry can indeed be significantly mitigated.

But that's for the future.

“Leader Huang, if you have any thoughts, just say them directly. But Spreadtrum really can’t move. I’m just a shareholder. If you make them move on the condition that HSDPA is required, they would rather break through the barrier themselves.”

Leader Huang did not refute.

He really doesn't have many cards to play in this matter.

So during this time, he also increased his understanding of the situation and increased his leverage.

"I heard that your baseband chip design is even more difficult than that of a CPU?"

Chen Xuebing pondered for a moment after being asked the question.

This wasn't exactly his forte, but at least he had a general understanding of the details.

"Well... in terms of complexity, baseband is indeed superior. It has to complete signal demodulation and channel decoding within microseconds, and there are still many problems to solve, such as signal interference and attenuation, as well as protocol compatibility. Each generation of communication technology has to be reconstructed."

"As for CPUs, foreign EDA software has accumulated years of technical expertise and can provide a fixed instruction set architecture. Many small functions are based on instruction sets. Developing according to the instruction set is less difficult, and the update frequency is also smaller than that of baseband."

“CPU development is a marathon that never stops, while baseband design is like climbing Mount Everest. With each new generation of 2G, 3G, and 4G, you have to climb it all over again. However, updating and optimizing baseband chips based on the communication protocols of the same generation is simpler.”

"However, if CPU R&D involves building its own instruction set and ecosystem, achieving complete autonomy is extremely difficult. It requires generation after generation of updates, and the team size requirements are far greater than those for baseband, requiring at least a team of thousands of people."

Huawei has deeply customized and optimized ARMv8 based on its permanent license, which can be said to have formed a complete set of independent instruction sets.

Singularity is currently only developing a CPU based on the ARM architecture, but it will inevitably follow this path in the future.

Moreover, future chips from major manufacturers will be true SoCs, integrating CPU, GPU, functional chips, and baseband chips, and requiring packaging, making it much more complex than it is today.

The SOC that Marvell provided for them is just an external baseband, which reduces power consumption by about 15%. If the baseband is fully integrated, power consumption can be reduced by another 15%-20%, and heat dissipation and thinness will also be greatly improved.

Chen Xuebing's brief explanation of the current situation had already impressed Leader Huang.

"Wow, I didn't expect you to be an expert in this area. Where did you learn it?"

Chen Xuebing laughed: "Through constant exposure, my practical skills are zero; I'm a long way from being an expert."

He simply has the ability to mentor experts.

After all, having clarified the functional direction already saves a lot of time.

"So your Spreadtrum company is a very mature team capable of developing its own 3G chips?"

Spreadtrum's TD chip design capabilities are now recognized as being among the top three in China, with only Huawei comparable to it, and ZTE may not be able to catch up. Otherwise, Chen Xuebing would not have placed such high expectations on it.

But he sensed something amiss in what Leader Huang said.

"In China, it's probably among the top ten. There are many other excellent teams, and Chongqing University of Posts and Telecommunications is also quite good."

Leader Huang clapped his hands: "Then let's form a powerful alliance! I won't make you move your headquarters! Move your 3G chip team here, and I'll have Chongqing University of Posts and Telecommunications Information Technology jointly develop with you! We can authorize each other and learn from each other, how about that?"

Chen Xuebing was starting to regret it.

Why be humble?
What's with the "strong" stuff? Just bring the protocol stack!

He stopped pretending and shook his head directly.

"That won't work. Apart from the protocol stack, Chongqing University of Posts and Telecommunications doesn't have any technologies worth learning. If we license each other, we'll be at a disadvantage."

Upon hearing Chen Xuebing tell the truth, Leader Huang finally chuckled.

“I’ve asked Chongqing University of Posts and Telecommunications (CQUPT), and they admit that they are not as good as you in terms of technology and team, and their commercialization capabilities are even worse. But we want to build a 3G industrial park, and the industrial chain must be complete. We need Chongqing chips that are recognized by the market. I’m not asking you to move everything here. Chongqing only needs your 3G chip design team to jointly develop chips with CQUPT. Let them send a team to establish a research institute with you. The patents developed will belong to you, and the profit sharing will be as you said. How about that?”

Chen Xuebing raised an eyebrow: "Let Chongqing University of Posts and Telecommunications learn the technology? Boss Huang, commercialization isn't that simple." Even Spreadtrum has to rely on Singularity to penetrate the market, and Chongqing University of Posts and Telecommunications?
"No, what I mean is that Spreadtrum should also stay in Chongqing. We need two chip companies. Spreadtrum should make Chongqing its secondary headquarters, or even a dual headquarters would be fine. Shanghai will provide the ecosystem, and Chongqing will provide the market."

These words made Chen Xuebing laugh again.

"What kind of market does Chongqing have? Even if we build a 3G industrial park, it will take at least three years before we can talk about a market, right?"

"Really?" Director Huang chuckled and countered, "Does the order for 3G base stations in Chongqing count as market demand?"

Chen Xuebing immediately stood up.

"Has it been decided which company will receive the TD license?"

He knew exactly which family it belonged to.

But once it's decided, he can go and work with China Mobile.

But Director Huang waved his hand and said, "No matter which company it belongs to, I can help you secure the Chongqing base station orders."

Chen Xuebing was stunned, then slowly sat down.

Are you so domineering?

That makes sense, though. The power to allocate frequency bands and open up communication scenarios rests with local governments. If they don't listen, there will be plenty of trouble.

Chen Xuebing started doing the math in his head.

The 2000 billion yuan TD project is divided into system equipment, terminals (TD mobile phones, data cards), infrastructure and supporting facilities.

Base stations and core networks are system equipment, while network deployment and civil engineering are infrastructure and supporting facilities, accounting for at least 75% of the total.

This was all done by the telecommunications companies.

1500 million.

CQ's market share is probably around 1/30? 5 billion?
wrong.

Chen Xuebing suddenly realized that what Leader Huang had just mentioned was "3G base station".

If we include WCDMA and CDMA2000, the market is worth 400 billion. One-thirtieth of that would be 10 billion.

Chen Xuebing's smile softened.

"Boss, is TD the only standard? Can we implement the other two standards?"

Leader Huang frowned: "The other two sets...aren't you guys in the TD chip business? You have the ability to cross over into other fields?"

“We are training a communications team, and we can build base stations! In addition, we also cooperate with Huawei, so they can do things that we can’t do.”

Chen Xuebing brought up "cooperation with Huawei" for the second time.

The truth is, there was no cooperation at all.

But if this goes through, they will truly have a partnership with Huawei.

"You want to outsource and act as middlemen?" Leader Huang's expression turned serious. "I've already stated that the orders I help you with will only be based on the median price of similar provinces in the market! The base station quality must undergo comprehensive acceptance testing, and the quality must be higher than that of other provinces!"

Chen Xuebing leaned down again and chuckled, “Boss, becoming a telecommunications provider isn’t something anyone can just do. It requires strict technical review, and there are only a handful of companies doing TD communication. Those that can are mostly domestic, like Huawei, ZTE, Datang, and maybe Spreadtrum. If you include chip suppliers, there’s only SMIC. There aren’t many companies competing for it to begin with, and we and Huawei already make up half. It’s hard to say whether Datang has the capability to undertake the project. What’s the point of just giving me TD? Only when the other two orders are also secured for us can it be considered a real business.”

In fact, the TD order is very significant. It's hard to say whether Spreadtrum, a newcomer, can get the project. With this order, they can be assured of entering the ranks of TD communication operators.

If Chongqing secures orders for them, they will try to get Chongqing included in the first batch of TD network construction projects, and determine the next contracting qualification based on the construction results.

As for WCDMA and CDMA2000, foreign telecom operators will definitely enter the fray, which could become a bargaining chip for them in front of Huawei.

The only information gap between Leader Huang and him was that he was unsure about the relationship between Spreadtrum and Huawei.

So he began to make plans.

If the two companies truly have a deep partnership, then this TD order is indeed not very significant.

He had inquired and learned that Datang's manufacturing capabilities had never been recognized by the Ministry of Information Industry, its trial network results had been poor, and its cash flow had always been problematic. If only ZTE remained, and Spreadtrum and Huawei joined forces, they would likely be able to secure the contract.

If that's the case, handing over TD to them would be perfectly justifiable, and the remaining two communication systems could be considered as supporting domestic production?

After thinking for a moment, Leader Huang made the decision: "Okay! But since we are supporting local enterprises, Spreadtrum must register a technology company in Chongqing! And it must be done as soon as possible!"

Chen Xuebing finally sat up straight and adopted a serious attitude.

"Boss, tell me, what are your plans?"

This order, based solely on materials and labor costs, has a gross profit margin of at least 40%, or even 45%. As for the final profit, it depends on the technology research and development and operating costs.

If you do well, the net profit can be over 20%, and once you get the ticket, the future looks bright.

"I consulted several experts and synthesized their opinions."

(Some readers have said I exaggerated the governing ability. This picture is just to illustrate that all events are taken from the original reality. Because there was some promotion, the timeline is advanced.)
Leader Huang crossed his legs and, while reminiscing, said:
"Some people say that a well-developed 3G industrial park, covering one square kilometer, can generate 50 billion yuan in output value. What do you think?"

Chen Xuebing laughed: "Which expert is giving you such grand pronouncements? But if you want to emulate Zhangjiang and gather all the corporate headquarters together, and use the surrounding areas to open factories, that's certainly possible."

Leader Huang's face darkened, then he nodded and said:

“I also think it’s too high. One square kilometer is roughly equivalent to 20 to 40 billion yuan in output value in our western industrial park and around 100 billion yuan in high-tech parks. But after some discussion, we decided we shouldn’t follow the old approach. First of all, the industrial park needs to be convenient in all aspects and located within the city. We also need to conserve land in the city center, so we can’t let those companies build the buildings. We have to build them ourselves. We also need to build the network public platform and terminals, and the ownership of these facilities belongs to the park.”

Chen Xuebing pondered for a moment and said, "That can indeed accommodate many companies. The 3G industry is complex, and it is convenient for small-scale communication. It is feasible."

Leader Huang smiled and said, "In addition, since we're going to build a 3G park, we should also have a national-level 3G product testing center so that all companies can test nearby. This will also attract more companies to come. We've already planned to consult with the Ministry of Information Industry and the Ministry of Science and Technology. By the way, I heard that RF testing machines are very expensive?"

Test Center
Chen Xuebing's eyes lit up.

During the trial network period, every terminal had to be tested. Even with the full network construction, large-scale sampling was required, including RF testing, protocol testing, and performance testing. This process was very time-consuming and involved a lot of queuing.

If there were a testing center in Chongqing, it would be much easier for his machines to be connected to the network, and they could be invited to participate when setting up experimental networks to ensure fairness.

He thought for a moment, then, remembering something, raised his hand to Leader Huang, took out his phone, and dialed Wu Ping's number.

"General Wu!"

"I remember you told me about 3G testing equipment, right? What kind of equipment is it? How much does it cost?"

As Chen Xuebing listened to the voices on the other end, his expression gradually became serious.

After hanging up the phone, I thought about it and then called Lu Weibing again.

"I remember there are a few shops in Huaqiangbei that specialize in getting grey market phones registered with the network?"

"Okay, can you check two machines for me? The brand is Rohde & Waltz from Germany, CMW100 and CMW500."

"See if any manufacturers are copying this?"

"."

"Oh, Wuxi Guodian? Okay, I'll wait for you, as soon as possible."

During the call, Director Huang frowned deeply.

I run a national-level testing center, why are you asking about "grey market aircraft" or "counterfeit"?
But Chen Xuebing's next words silenced him.

"The German CMW500 testing machine not only handles RF testing, but also EMC (full-band scanning) testing, protocol conformance verification, etc. The price is really expensive, $200 million per unit. Theoretically, it can test 30-60 units per hour. If you want to build a national-level testing center, you need to buy at least 15-20 units."

"15-20 units, 30-40 million US dollars?" Leader Huang's eyes gradually became serious.

"Well, a manufacturer called Wuxi Gudian made a knock-off, stripped-down version. Except for EMC testing, it has all the other functions. There's also an older version of CMW100 that can do EMC testing. If we can use all three types of equipment together, we only need to buy five original machines. We can use only the original machines for parameter calibration, and mix and match them for testing."

"Won't there be any legal risks?"

"It is noted that this is a large-scale sampling test. Pirated and low-end machines have been tested. Then, a few genuine high-end machines will be randomly selected for testing. Genuine machines also have a failure rate, and generally, not so many machines are needed. Buying so many is just to prepare for peak testing periods."

"What about accuracy? Is it much worse?"

"Hehe, don't overestimate Germany, and don't underestimate Huaqiangbei. Apart from the issues of lifespan and equipment noise, genuine machines are not necessarily as good as counterfeit machines."

"What about the price?"

"The CMW100 is about half the price. I'm still asking about the pirated ones, but I estimate it will cost at most 300,000 to 400,000 RMB."

Leader Huang clenched his fist and slammed it on the table.

Although it's a censored machine, the price difference of tens of times is enough to illustrate the cost difference.

Having standards means having bargaining power.

This statement is particularly profound at this moment.

Building this industrial park was the right decision.

As a local government, it should promote Chinese standards of its own!
"Okay, then go ahead and ask!"

　Chapter 246, about donating the car, was rejected several times and deleted. It hasn't been mentioned since.

　　
　
(End of this chapter)