Chapter 38: Ant vs. Elephant

"We have already reached agreements with several component suppliers. The Yangcheng Tianhua Electronics Company will be our contract manufacturer for the Silver Sable mouse. Once the production process is perfected, we expect our initial daily capacity to reach around one thousand units!"

Hu Zixian, having just returned from Guangdong Province, went straight to Li Dongling's office without taking a moment to rest.

"However, some components still need to be procured from Japanese companies through our partners in Hong Kong," Hu Zixian said, taking a sip of the tea Li Dongling had poured for him.

Li Dongling showed no surprise at this. Although the United States had begun suppressing Japanese semiconductor companies seven or eight years ago, Japan's semiconductor industry remained among the best in the world.

Many domestic electronics and appliance companies relied on chips and memory components sourced from Japan, Europe, the United States, or even neighboring South Korea. Take the Wanyan Company, for example—the inventors of the VCD, who had become a runaway success this year and were touted as the world's largest VCD giant. Yet, their core technology patents, decoders, and VCD processing chips were all controlled by foreign firms.

Wanyan’s decoder chips were held by American companies like ESS and C-Cube, while their VCD chips were purchased from Philips and Sony. This meant that if these four companies so desired, they could easily foster a second, or even eight or ten, competitors to Wanyan without any issue. After all, they were chip sellers; it made no difference to them who bought their products, and it certainly wouldn't cost them a cent in profit.

Dongling Hi-Tech’s Silver Sable was no exception. Fully localizing all the components for the mouse was simply unrealistic at the moment. In fact, using domestic parts would likely cost significantly more than importing foreign ones.

This was why the belief that "it is better to buy than to build" remained so prevalent. Foreign products were mature, technologically advanced, and affordable. If a domestic company spent all its energy on R&D only to produce something inferior that wouldn't sell, eventually, no one would bother with such thankless work. This wasn't something that could be changed overnight by a mere statement.

However, once Wanyan stumbled after being double-crossed by ESS, C-Cube, Philips, and Sony—who sold decoders and chips to dozens of other companies to pit them against Wanyan—perhaps some would finally understand the critical importance of holding the technology in one’s own hands.

Li Dongling certainly did not want Dongling Hi-Tech to be at the mercy of others like Wanyan, potentially becoming a giant only to be easily destroyed. But escaping such a position of dependency was not a task that could be accomplished in a single day. At the very least, Dongling Hi-Tech had not yet reached the point where that was the immediate concern; the priority now was survival.

"The Guanxing satellite dish is no longer selling at all. Total sales are around 750,000 units," Li Dongling revealed to Hu Zixian. The satellite dish market had bottomed out, with everyone engaged in desperate price wars. Over the past six months, they had sold nearly 750,000 units, with a total transaction volume exceeding 200 million, but the era of exorbitant profits was over. Now, selling them was barely breaking even, if not losing money. The Shangguan Town component factory had entered the inventory liquidation phase, which meant Dongling Hi-Tech could no longer expect dividends from the project.

While 200 million in sales over six months seemed like a massive profit, after taxes and other deductions, Dongling Hi-Tech's share amounted to roughly 26 million. If the Silver Sable mouse and the digital cordless phone didn't sell, Dongling Hi-Tech would soon be eating into its savings.

"Gao Peng is currently in contact with domestic computer companies like Great Wall, Langchao, and Hedy. If we can secure mouse orders from them, Dongling Hi-Tech will have established a foothold in the domestic mouse industry..."

Collaborating with these computer brands meant playing the role of an OEM—producing mice to be branded with the computer companies' logos. There was no other way; the Silver Sable lacked brand recognition, and it was unclear how many retail customers would buy it. Major computer manufacturers would not easily agree to co-develop a product with Dongling Hi-Tech. Even so, it was only because Dongling Hi-Tech had taken the initiative to approach them, offering near-cost pricing, that these companies were willing to test a batch of products.

***

"I think we should reconsider this partnership and perhaps collaborate another time," the purchasing manager for Hedy Computer said.

In Yangcheng, just as Gao Peng was on the verge of signing a contract for an order of 10,000 Silver Sable mice, someone had whispered something in the manager’s ear. The manager’s tone shifted instantly, and he walked away after dropping that curt remark.

Gao Peng was stunned, unsure of what had happened. When he tried to follow and ask, the manager avoided him as if he were a plague.

It wasn't just Hedy; all the computer manufacturers he had been negotiating with suddenly changed their attitudes, refusing to even see anyone from Dongling Hi-Tech.

While Gao Peng was still baffled, a reporter from the newspaper that had run the advertisements for the Silver Sable called him, launching into a tirade: "I can't believe I fell for your lies! Do you have any idea what kind of trouble you've caused our paper? You’re a knock-off operation, and you had the nerve to buy ads? Your company better prepare for a lawsuit from Microsoft. You’ve ruined me!"

Before Gao Peng could even respond, the caller hung up. He rushed to a newsstand and flipped through several newspapers. Both tech and business publications were reporting the same headline: "Silver Sable Mouse Plagiarizes Microsoft."

"Are you buying that or not? You've been staring at it for ages! Do you think I don't have business to run?" the old man at the newsstand grumbled.

Usually, Gao Peng would have argued with him, but he was in no mood today. He threw down a bill, didn't wait for the change, and ran toward the Yangcheng airport, intending to fly back to the provincial capital and then to Pingyang.

Back at Dongling Hi-Tech, the news had already arrived, as reporters were already making their way to Pingyang to interview the company.

"We are from the Provincial Economic Weekly. We want to ask your company: why did you plagiarize Microsoft’s latest product?!"

In the Dongling Hi-Tech conference room, the reporter from the provincial capital asked aggressively. Reporters in this era were exceptionally bold. Though the *Provincial Economic Weekly* wasn't an official state organ, media outlets loved to jump on controversies, and they were eager to dig up a major scoop.

Yao Luoying arched her eyebrows, her face flushed with anger. "Our company did not plagiarize Microsoft. The Silver Sable was developed by us; all patents and technology belong to Dongling Hi-Tech!"

"Are you implying that Microsoft plagiarized you?!"

The reporter was even more excited upon hearing this, quickly motioning for someone to record the statement. She had expected to find a company that would hang its head in shame and beg for forgiveness to avoid prison, not one that was so defiant.

The idea that Microsoft would plagiarize Dongling Hi-Tech was laughable. Given the disparity between the two companies, few would believe it; they would likely be dismissed as madmen.

"Assistant Yao," Li Dongling said as he entered the room, stopping Yao Luoying from continuing the argument. He glanced at the reporter. "Dongling Hi-Tech will provide a response tomorrow."

***

"We will be back. Until the truth comes to light, our newspaper will continue to follow this story!"

Watching the reporter strut away as if she were a champion of justice, Li Dongling turned and headed back to his office.

By nightfall, the lights on the second floor of Dongling Hi-Tech were still burning. Gao Peng, who had rushed back to Pingyang overnight, joined Hu Zixian, Yao Luoying, and Li Dongshan in Li Dongling’s office.

"A technology company that seeks shortcuts through plagiarism will eventually fail, despite any temporary success. In Japan, some companies have upheld the spirit of craftsmanship for thirty years just to find a foothold in an industry, yet some companies here want to reach the sky in a single step, trying to walk in one year the path others took thirty to complete—they will inevitably fall off the cliff. This applies to companies, to individuals, and to nations..."

Li Dongling looked at the *New Tech Express* newspaper Gao Peng had brought back. For days, the paper had been relentlessly reporting on the matter. Lin Shiman, the reporter covering the story, had become famous, hailed as the only female reporter in the domestic tech industry who dared to speak the truth. She had written scathing articles attacking companies like the developer of the Silver Sable, even elevating the issue to a social crisis, almost accusing Dongling Hi-Tech of being a scourge on the nation.

Having read the papers, Li Dongling had to admit that Lin Shiman had a flair for writing.

"The problem is, nobody is willing to believe us," Gao Peng said, frustrated. The tech media was almost unanimously attacking the Silver Sable and Dongling Hi-Tech. As far as the truth was concerned, they seemed to have already decided what it was and had no interest in listening to Dongling Hi-Tech’s defense; they only wanted to see the company grovel.

Gao Peng paced restlessly, Hu Zixian looked dejected, Yao Luoying was incensed, and Chen Tao and Li Dongshan sat in silence. Li Dongling observed them all.

Tapping his fingers on the table, Li Dongling recalled the words of Laozi: "Misfortune, that is where happiness depends; happiness, that is where misfortune lies in wait." As he had said before, a crisis could also be an opportunity.

"Dongling Hi-Tech cannot sit and wait for death. We must file a lawsuit."

"We should sue that *New Tech Express*. They didn't do any investigation and just reported rumors..." Yao Luoying gritted her teeth in frustration. She felt that only those who had been wronged truly knew how heavy that injustice felt.

"We will certainly sue the *New Tech Express*. But to wash the mud off Dongling Hi-Tech, suing them won't be enough. We must also sue Microsoft."

Yao Luoying, Hu Zixian, and Gao Peng all stared at Li Dongling in stunned silence.