Chapter 561: The Unrivaled AI
"Hongyi, my father probably mentioned this to you already…" Su Yuanshan stood mid-way across the skybridge, his eyes scanning the view over the tech park before resting on Yue Hongyi's face. He smiled. "I don't have a lot of free time, so your graduate coursework might require some self-study."
"Professor Su, I've already self-studied all the required courses," Yue Hongyi immediately replied.
Hearing the word "professor," Su Yuanshan paused for a second. Then he suddenly remembered complaining to his father once that he preferred being called "Doctor" rather than "Professor"—clearly, this kid had received that tip from the old man.
Su Yuanshan smiled and nodded. "Good. On the way over, I was thinking—should I send you to Shanghai or place you under one of my senior mentors?"
"You mean Dr. Qin?"
"Exactly. Both teams work on processors. The difference is in their architecture—Dr. Qin focuses on the complex instruction set X86, while the YX architecture over there is based on RISC. Although the difference isn't huge right now, as instruction sets evolve, it'll be important to specialize. So, tell me, which direction do you want to go?"
"I'd like to focus on the X86 architecture."
"Alright." Su Yuanshan nodded. "But I've changed my mind slightly. If I send you directly into a team, you might not be able to keep up, and you'll quickly become just another cog in the machine."
Seeing Yue's puzzled expression, Su Yuanshan elaborated, "Yes, joining a corporate team will teach you skills fast. But those skills might not be helpful for scientific research or for your long-term development. Otherwise, you would've gone through our campus recruitment instead of choosing the research track."
Becoming a cog in the machine meant being screwed in tight.
Yue Hongyi exhaled slowly and nodded quickly.
"So, you'll stay with me for now. I'll give you a task to start with—within three months, I want you to design a CPU, starting from the instruction set."
"Huh?" Yue's eyes widened in shock.
"Don't panic. I've read your file. My father thinks very highly of you, and I trust his judgment," Su Yuanshan said as he walked on. "And you can use every resource available—ask me, ask my colleagues."
"Of course, this CPU only needs to have basic functionality. Don't worry about designing something capable of running Windows."
Yue Hongyi pressed his lips together, met Su Yuanshan's gaze, and nodded firmly after a moment of thought.
"Good. Let's get you a desk." Su Yuanshan smiled. "We'll have Wen Xiaoqian make you an ID card and assign you a workspace in my office. You'll also have access to my senior researchers and Professor Xi's team. Don't be shy. Ask questions. Move around. Got it?"
…
As Su Yuanshan's own graduate student, Yue Hongyi had no need to worry about logistics. Wen Xiaoqian had everything arranged perfectly.
After settling him in, Wen Xiaoqian returned to Su Yuanshan's desk with a stack of files and handed him a call memo.
"President Shan, just got a call from Director Shi at Giant. He's asking if you have time to attend this year's Caotang Conference."
Su Yuanshan opened his calendar. At first glance, it looked clear—but the to-do list was massive. He frowned. "Tell him I'm available this weekend—wait, forget it. I'll call him myself."
"Alright. Also, leaders from Fujian Province will be visiting the day after tomorrow. Should you meet them, or…?"
With Chen Jing back in the capital, and Duan Yongping stationed at the special zone factory, the only true top-tier leaders left at Yuanxin were Su Yuanshan and Professor Xi.
"Let Professor Xi handle it," Su Yuanshan said, trying to excuse himself. "Why are provincial leaders visiting right now anyway?... Wait, which province?"
"Fujian. And it's not just any official—it's leadership from the provincial capital."
"…Ugh. Can't dodge that. I'll handle it."
He already knew who was coming—a leader he had once watched soccer with, once shared hot pot with… And he had no doubt the visit was personally aimed at him.
…
The next day, having received early notice, Su Yuanshan didn't prepare any formal reception. Most people didn't even know the visitor's identity. The car carrying the leader and his assistant arrived quietly at Yuanxin's building, driven by Fu Zhenhua.
Su Yuanshan stood alone at the entrance to greet them—as a friend, not a subordinate.
"So, should we visit my office first, or tour the R&D center?" Su Yuanshan shook the leader's hand, smiling.
"I'm just here on the sly. Came for a conference in the provincial capital and thought I'd sneak over. You lead the way."
"Alright then. Let's take a casual stroll while we talk."
"Perfect!"
They began with the admin building. Su Yuanshan pointed out the various C-suite offices. When the leader learned that Chen Jing, Duan Yongping, and Wang Rui were all out, he laughed. "They say government officials are busy, but corporate leaders seem even busier."
"True, but the pressures are different. You manage the pockets and rice bowls of millions. A company just has to care for its employees. And sometimes, due to the industry's spotlight, we spend more time cutting ribbons than doing real work."
"Haha, if you want to talk about pointless busywork, don't forget us government folks," the leader said with a grin, glancing around conspiratorially.
Su Yuanshan chuckled.
After showing off the admin side, they walked across the skybridge to the lab buildings.
"I heard your AI technology is unmatched in the world now?" the leader asked as they walked the bridge.
"Unmatched?" Su Yuanshan laughed. "Who told you that…"
"Your own provincial officials," the leader replied with a grin. "They were boasting about you at this tech conference—saying your chess AI is the best in the world."
"Ah, that must be Blue Star AI. In the realm of chess, yes, we currently don't have any rivals. But I've heard IBM is working on a chess AI as well, and they're designing a dedicated supercomputer for it. That gives them a real edge. We've only got the academic network's compute cluster."
"So they might catch up?"
"They might. That's normal. We suffer on the hardware side. But Sony plans to co-found an AI lab with us soon—once we have our own dedicated supercomputer, IBM won't be a threat anymore." Su Yuanshan smiled. "Technology is always spiraling upward. No one stays on top forever."
"True that."
The leader wasn't from a STEM background, and although he had an interest in tech, most of Yuanxin's projects were a mystery to him. So Su Yuanshan skipped the jargon and focused on how specific technologies would impact the future.
They left the lab building and walked toward the lake.
Standing beneath a tree outside the Pandora Lab, the leader gazed at the buildings on the far shore.
"Last time I was here, the Premier stood right here and said those two buildings were the future of China's semiconductor industry."
"Indeed," Su Yuanshan said, recalling the visit from two years ago. He smiled. "Back then, he insisted on staying another night. But now the lithography team has moved out—those buildings are now home to electrical and optical labs."
"I heard Yuanxin also has an R&D center abroad?"
"Correct. But one of them is about to be relocated…"
"Why?" The leader blinked, clearly puzzled. "Wouldn't having a base overseas help you access global talent and tech more easily?"
Su Yuanshan's eyes flashed. He didn't answer directly.
"Let me tell you what happened during my recent visit to Silicon Valley."
…
When Su Yuanshan recounted, in full, how he was publicly targeted during the Apple press conference—not once but twice—the leader's brow furrowed deeply, and he was silent for a long time.
Even before he knew Su Yuanshan personally, he was familiar with Yuanxin. And after meeting him, he had come to deeply admire both the company and the man. To him, someone like Su Yuanshan—a leader of global influence—should be treated with respect by anyone. In the U.S., a guest of his status would normally be welcomed by someone at the level of a state governor.
And yet, he was harassed on camera.
That kind of arrogance was hard to fathom.
"They've always talked one way and acted another. Deep down, they never saw us as equals," Su Yuanshan said with a long sigh. "Lithography is the ultimate technological bottleneck in semiconductors. If our team makes a breakthrough while still abroad, I'm worried they'll block us from bringing the results back home."
"You're right." The leader nodded, walking slowly along the lakeside.
And Su Yuanshan began to describe his vision of where technology was going—and where it could take them.
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Chapter 562: The Argument for Population Advantage
"In fundamental scientific research, we are still comprehensively behind the West. This is something that can't be changed—or even caught up with—in the short term. After all, all three industrial revolutions happened in Western societies. Their foundation is just too deep. One could even say that the entire modern scientific system was built by the West. We're merely catching up, mere students. That's something we have to admit."
A light drizzle had fallen in the provincial capital the night before, and now the skies were still overcast. The lakeside breeze carried a rare, cool touch to the early summer air.
Arms crossed, Su Yuanshan looked out at the lake and sighed. "In the academic world, our voice is so weak it's almost nonexistent."
The provincial leader standing beside him simply replied with a soft "Mm," his brows furrowing slightly. He'd always assumed that someone like Su Yuanshan—young, successful, wealthy, and doing what he loved—had few worries in life. If anything, perhaps only the occasional romantic concern. But clearly, Su Yuanshan had many burdens. Deep ones. Even anxiety.
Yes, he could hear Su Yuanshan's worry—and guardedness—toward the Western world.
"There's no way to 'overtake on a curve' in basic science, but in applied science and engineering, we can. Especially in the industrial field."
"Since the saying, 'Master mathematics, physics, and chemistry, and you can go anywhere in the world without fear,' our society has had a tendency to favor the sciences over the humanities. For individual students, specializing in only one field is considered a weakness, but for a country in urgent need of catching up with Western technology, it's a huge advantage. Our large population base, coupled with compulsory education and university expansion, will transform STEM students into an unparalleled advantage in engineering talent."
At this, the leader smiled. "I heard you've been a vocal advocate of the 'population advantage'?"
"More precisely, a talent advantage," Su Yuanshan grinned.
"And it's not just talk—Yuanxin has been planning and developing along this strategy from the beginning. Our core strategy is to expand into regions that appear poor but have dense populations. The next twenty years will be a period of explosive technological growth. If we secure the markets of these populous countries and grow alongside them, we'll eventually gain the confidence and leverage to challenge the developed nations."
"Consumer electronics must follow the path of mass adoption. They must connect with every ordinary person on this planet. That's Yuanxin's mission: technology that benefits humanity. If it doesn't reach every household and become a part of daily life, it's not a public product—it's a luxury."
The leader was silent for a while, then nodded slowly. "Yes, like you said—no normal country remains poor forever, to the point of economic death. A nation or region's economy will always rise with the tide of global development. We're now living in the industrial era, where productivity has been unleashed."
Su Yuanshan glanced at the leader in slight surprise, then laughed. "Now that's what I call vision."
The leader laughed. "That flattery's a bit shallow, don't you think?"
"No, no—I mean it sincerely. Our country's poor, yes, but the real issue is a lack of development opportunity."
"Which is why all the regions are focusing on attracting investment and building infrastructure—creating jobs."
The leader stayed at Yuanxin for only one afternoon. He didn't even have time for dinner and left in a hurry, proving he hadn't lied—he really had just "snuck out" to chat with Su Yuanshan.
Though the visit turned into Su Yuanshan sharing his heart out, the leader had turned out to be an excellent listener.
That evening, Su Yuanshan called Shi Dazhu back and arranged to meet over the weekend. Since he really didn't have time to travel, he invited the entire Caotang Club to gather in the provincial capital instead.
Shi Dazhu joked that as long as Su Yuanshan was buying dinner, no one would complain about the trip.
…
That weekend, a group of twenty or so members of the Caotang Club arrived in full force. Su Yuanshan kept his promise—he first treated everyone to a lavish seafood feast at a rotating restaurant. In the afternoon, they returned to the Yuanxin Tech Park and set up a casual discussion session on the rooftop garden of the administrative building.
"One day I want a tech park like this of my own," Shi Dazhu said, coffee in hand, gazing into the distance. "Then I'll gather a bunch of scientists to cook up some black-tech for me."
"What kind of black-tech, old Shi? Clones?" joked Deng Hanqing, CEO of Yunhai Zhiyou, the first officially listed game development company in the provincial capital. A programmer by trade, he had been saved during hard times by a major investment from Yuanxin Ventures. After several hit games on the PlayStation, his company had now become one of China's largest game developers.
In fact, nearly half the people present worked in the gaming industry.
"I don't care what it is—as long as it's tech. Like what Dr. Xi is doing. Hey, President Shan, is Dr. Xi around? Can you introduce us?" Shi Dazhu looked around and grinned. "We're all tech people here. Been dying to meet him."
"Bad timing… Dr. Xi's at a conference in the capital."
"Ah… then it's not meant to be."
Su Yuanshan chuckled. "Shi-ge, never mind Dr. Xi. I heard you're working on a 3D game engine?"
"Not just me. A few of us are teaming up to make a domestic one," Shi Dazhu said, gesturing toward Qiu Bojun and Deng Hanqing. "We want to create a homegrown solution."
"Now that's something I can get behind!" Su Yuanshan slapped his chest supportively. "If you need help, say the word. But a reminder—game engines aren't like games. You're in it for the long haul. Code management is key. Don't end up with a bunch of 'ancestral' spaghetti code that no one can untangle later."
"And that goes for websites too," Su Yuanshan said, turning to the web company founders with a grin. "Xinghai's open-source community was started as a bit of a hobby project by Dr. Xi. He didn't take it seriously at first. Then after he came back to China, the code maintainers changed multiple times—and now it's a total mess."
Qiu Bojun laughed loudly. "Even Dr. Xi can be sloppy?"
"Even the best horses stumble," Su Yuanshan quipped.
(Side note: For those who think game devs can't get along this well—you're wrong. In the Wild West era of the industry, they were very tight-knit.)
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Chapter 563: The Significance of the Ministry of Information Industry
"Achoo…"
As the Audi A6 drove straight from Yuanxin's design center to the traditional courtyard that served as the chairman's private office, Xi Xiaoding stepped out of the car sneezing multiple times, causing Chen Jing—who was waiting at the entrance—to break into laughter.
"Caught a cold?" Chen Jing asked with concern.
"No, I think someone's cursing me," Xi Xiaoding chuckled and nodded to her. The two walked directly into the courtyard.
"Dr. Xi, this is your first time here, right? Want me to show you around?" Chen Jing offered with a smile, noticing him glancing around.
"It is, but that's okay—you must be busy. I just came by to have a look... Does Brother Xiaoshan have a room here too?"
"He does… Wait—did you just call him 'Brother Xiaoshan'?"
"Haha, that's what my sister calls him, so I just picked it up," Xi Xiaoding replied, clearly unbothered and a bit mischievous.
Chen Jing could only shake her head, amused. The longer she stayed at Yuanxin, the more she rose in influence—and visibility. She had always stood at the top, but with Yuanxin's rapid development, her status in the business world had also soared. The more she saw of it, the more she appreciated the unique relationship between Su Yuanshan and Xi Xiaoding.
Years ago, it had been Su Yuanshan's words that convinced Dr. Xi to turn down an IBM offer and join a fledgling software startup. Later, after achieving success, he ventured to Silicon Valley and founded Xinghai, now worth billions of dollars. And then, without hesitation, he gave it all up—his role as founder and CEO—to return to Yuanxin and become its largely hands-off chief scientist.
No matter how you framed it, that wasn't something anyone could explain away with financial gain or career logic.
Of course, Su Yuanshan never treated Xi unfairly either.
The outside world said Yuanxin was a dual-leadership company, with Chen Jing as the visible head and Su Yuanshan quietly wielding power behind the scenes due to his age. But Chen Jing knew better. Yuanxin was actually led by three people: Su Yuanshan, Xi Xiaoding, and herself.
The best proof was when the three of them alone finalized Yuanxin's equity distribution—a decision that altered countless people's wealth and futures.
If a disagreement ever arose, Chen Jing had seriously considered the scenario—Su Yuanshan would always be the one who maintained at least one ally. Whether with her or with Dr. Xi, he would never be completely isolated. In fact, Xi Xiaoding might be even more unconditionally supportive of him than she was.
That, right there, was why Su Yuanshan was the one who could never lose—and the one whose vision always prevailed.
"President Chen, I just came back from a seminar at Peking University," Xi Xiaoding began, changing the subject. "Ran into one of my old undergraduate professors. He works at the Ministry of Electronics… though it's about to be dissolved."
"So soon?" Chen Jing's expression turned serious.
One of her main reasons for staying in the capital was to maintain relationships and monitor policy trends—especially high-level structural changes. Ever since the formation of the National Development and Reform Commission, rumors had circulated about new departments being created. She and Su Yuanshan had discussed this often, and both believed that further structural reforms would be slow to come—at least not until after Hong Kong's return.
"Yeah. My professor didn't give an exact date—he was a little cryptic—but from his tone, it sounds like the change will be officially approved at next year's National People's Congress at the latest. Functionally, it's going to split off the telecom side and form a brand-new department focused on the information and communications industries."
"Xiaoshan and I have talked about this too," Chen Jing nodded. "He also predicted this. The Ministry of Posts and Telecommunications has become bloated, still tangled between administrative and commercial duties. Sooner or later, the government would have to step in. And the Ministry of Electronics… is it being merged in?"
"Yes."
"Then that clearly shows the national strategy: full-scale advancement of the electronic information industry—or more precisely, the semiconductor, electronics, networking, and communications sectors." She concluded quickly. "That's very good news for us."
"Well… that's not exactly my area of responsibility," Xi Xiaoding laughed modestly.
"Your responsibility?" Chen Jing grinned. "You're the face of Yuanxin's R&D."
"Hah! I don't dare claim that," Xi said, shaking his head.
…
Later that evening, Su Yuanshan heard the news about the Ministry of Information Industry's imminent formation during dinner.
Like Chen Jing, he was visibly excited. Because this wasn't just about the creation of a government department—it was about the clear orientation of national strategy.
A shift in national strategy meant resource allocation and policy favoritism.
In his previous life, the Ministry of Information Industry had been established early—in 1998. That same year had marked the start of China's internet boom. The ministry's famous "Document No. 5" had placed a figurative collar on the rampaging dominance of foreign mobile brands in the domestic market, triggering a chain reaction that led to the birth and rise of many homegrown phone companies.
Document No. 5 had introduced licensing requirements for phone manufacturing—a move Western critics loved to call proof that China wasn't a free-market economy.
In this timeline, the Ministry was being established earlier than it had been before.
Su Yuanshan fully understood why.
Thanks to Yuanxin, China's semiconductor, software, telecom, and internet industries had progressed significantly ahead of schedule. Yuanxin alone had become a heavyweight mover of billions, affecting trillions in market behavior. Combined with favorable macroeconomic trends and constant advocacy from scholars, China's position in the information industry was miles ahead of where it had been in the previous timeline.
Just one example: core telecom infrastructure and terminal components were now producing domestic profits—not being siphoned away by foreign companies.
And Yuanxin, unlike anyone else, invested heavily and relentlessly in R&D.
This kind of virtuous cycle created impact on a scale that was simply incomparable.
…
"Everyone, I've just received some news."
Su Yuanshan stood just outside the private dining room. He'd only needed a minute to make up his mind: this was something worth sharing.
That had been the original purpose of the Caotang Club—to pool knowledge and share information. Besides, no one here was his competitor.
And this kind of restructuring news? It couldn't be hidden forever. Eventually, it would become part of public discussion, policy white papers, and expert panels.
"What's the news?" asked Shi Dazhu, who was sitting right next to Su Yuanshan. He'd noticed the call earlier and had been curious since.
"Don't worry—it's good news." Su Yuanshan paused, then returned to his seat with a smile. "Let's all head back to Yuanxin. We'll continue this with a proper meeting in one of our conference rooms."
Everyone exchanged looks, surprised.
They were being invited to a meeting… in Yuanxin's internal conference room?
But Shi Dazhu didn't hesitate. He immediately nodded. "Alright!"
Then, he looked around the room and added with a knowing smile, "Gentlemen, Yuanxin has better information channels than all of us. Even a small leak from them could make us a fortune."
"Come on now, it's not that dramatic," Su Yuanshan said, chuckling.
But truth be told, it kind of was—because he was the leak.
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Chapter 564: Throwing Out a Brick to Attract Jade
More chairs had to be brought into Yuanxin's conference room just to seat the twenty-something members of the Caotang Club. Among those present was Cao Xiaoliang, Yuanxin's domestic market director for mobile phones and a protégé of Duan Yongping, now fully responsible for the expansion of Yuanxin's mobile business across China.
"The establishment of the Ministry of Information Industry—calling it a symbol of national strategic direction may be a bit exaggerated, but comparing it to a bugle call is definitely fair," Su Yuanshan began.
He openly shared with the group the news about the ministry's upcoming formation. As he had expected, several people in the room had heard rumors of institutional restructuring through various channels. But to them, this kind of national-level decision was something too far above their heads. Better to wait for official policy announcements.
Even Qiu Bojun was only surprised that Su Yuanshan could get such precise timing; he didn't think too deeply about it.
Among everyone present, only Shi Dazhu and Luo Zhizhuan, the founder of Xuntong Networks, seemed fully locked in.
So Su Yuanshan decided it was time to "educate" his peers. This kind of structural reform would absolutely impact everyone.
In future years, major companies would all have dedicated policy research departments, handling everything from early-stage rumor collection to detailed analysis of domestic and international policy developments. These departments would operate meticulously, never missing a beat.
But right now, Chinese companies had yet to form this habit. Even Yuanxin didn't have a formal policy analysis division—because Su Yuanshan himself, with his almost unnatural analytical instincts, made it unnecessary.
"In foreign companies, policy research departments are standard. Many even hire retired politicians as advisors. Don't assume the West is some bastion of fair play—it's just as reliant on relationships and access," Su Yuanshan explained with a grin.
From the back of the room, Shi Dazhu glanced at Cao Xiaoliang, who sat beside Su Yuanshan taking notes diligently. Then he raised his hand.
"President Shan, has Yuanxin ever hired any political consultants?"
"We never used Yuanxin's name to do it before, but this time, we did," Su Yuanshan said vaguely, then pivoted: "Since we don't have a policy team yet, we've had to rely on our own projections."
Shi Dazhu nodded thoughtfully. He looked around at the others and saw many of them looking a bit dazed or lost. He sighed internally.
It was clear: Su Yuanshan had gathered them here so they could collectively try to infer future policy directions from the news about the new ministry. Like—what would the government prioritize? Which sectors would be targeted for growth? If anyone could predict the direction of national policy even a little, they could ride that wave ahead of the pack.
In China, what's more valuable than inside knowledge? Policy foresight.
But these colleagues… still thinking too small.
So Shi Dazhu decided he needed to step in. After all, he was the club president.
"Here's what I think," he said aloud. "Since President Shan was generous enough to share internal info with us, we should be thinking hard about what the state's strategy might be moving forward. What sectors will they emphasize? In a sense, let's all put ourselves in a leader's shoes—imagine how we would shape China's information industry if we were in charge."
Then he turned with a smile toward Su Yuanshan. "President Shan, don't you agree?"
Su Yuanshan nodded repeatedly. "Absolutely. That's a great suggestion. Let me start us off—throw out a brick to attract jade."
He stood and walked to the whiteboard.
"Earlier this year, the State Key Laboratory for Broadband Optical Fiber Transmission and Communication Systems, part of the Electronics Institute, released more than a dozen new findings. All of them focused on long-distance communication tech. This suggests we've reached a point where we can rapidly deploy fiber-optic infrastructure."
"And to speak a little casually—unless someone overturns the current foundations of physics, fiber optics will remain the best solution for data transmission, bar none. Even if wireless technology makes huge strides, fiber will still carry the bulk of global data."
"So the first sector likely to benefit is fiber optic manufacturing. As large-scale deployment ramps up, backbone network transmission speeds will surge. Add ADSL to that…"
He paused and looked around. "Everyone knows the current state of ADSL, right?"
Zhongli, founder of Southern Network, nodded. "It's already commercially available overseas, but due to standardization issues, it hasn't been widely adopted domestically. They're planning pilot projects, I hear?"
"Zhong-ge is right." Su Yuanshan grinned. "Our country has always been cautious about adopting foreign tech. But if the backbone network gets fully upgraded—are we seriously going to let people keep using 56k modems? Talk about missing the bend in the road."
At this point, Cao Xiaoliang, who had been quietly taking notes, looked up and smiled.
"President Shan mentioned overtaking on curves—I've got some data to back that up."
Everyone turned toward him.
"According to the latest stats, China now ranks first in the world for wireless base station growth rate and absolute increase. Our total number is still catching up to developed nations, but it's only a matter of time before we overtake them. And here's the kicker—mobile phones, or 'dageda,' are nearly extinct in China. That's something no other country has pulled off."
"In other words, we've already completed our leap from analog to digital communication."
Su Yuanshan nodded approvingly. "Keep going."
Cao Xiaoliang took a breath and continued, "The advantages of digital communication are obvious. Just look at the rise of SMS in China—that alone represents a complete industry leap."
"Exactly!" Su Yuanshan laughed. "The state isn't blind. Once it sees the benefits, it'll keep pushing. That's why I suspect the government will now accelerate ADSL deployment."
"As for standardization issues…" He looked around and added, "I'll bet you anything—China Telecom will jump into those international negotiations with both feet."
And if they don't? Su Yuanshan would push them himself.
At this point, even the slowest thinkers in the room realized what was happening: with the creation of the Ministry of Information Industry, the internet industry in China was about to take off.
…
"Then I'll toss out a brick of my own," Shi Dazhu said, sensing the energy shift. "President Shan just mentioned the Ministry of Electronics merging into the new ministry. That suggests the electronics sector will soon become deeply integrated with the information sector. That makes me think… maybe mobile phones are about to explode."
He looked directly at Cao Xiaoliang, smiling. "Director Cao should know better than anyone."
As the head of Yuanxin's domestic mobile division, Cao Xiaoliang was indeed the most informed person on the matter.
"Hehe, the market is growing steadily," Cao replied modestly. "But a true explosion? Not yet."
"What if a policy suddenly cancels network access fees?" Shi Dazhu pressed, eyes gleaming, glancing briefly at Su Yuanshan.
That glance made Su Yuanshan's heart skip.
Old Shi really had a sharp eye!
Yes—network access fees, installation fees… all those extra charges had long been opposed by the future Ministry of Information Industry.
You read that right: the ministry had always supported removing them.
Why?
Because those fees didn't originate from telecom companies or the Ministry of Posts—they came from the Ministry of Finance.
Back then, laying phone lines was considered public infrastructure. Theoretically, the cost should have been covered by public funds.
But the Finance Ministry said they had no money.
So they created a policy: "Just charge the users."
That's how it started.
At the same time, installation fees were a major sticking point in China's WTO negotiations.
Su Yuanshan believed that as China grew more eager to join the WTO—and with the Information Industry Ministry's growing influence—these fees would get cheaper and eventually disappear.
—
Free appendix:
In 1979, government directive No. 165 allowed charging a phone installation fee1980: fee structure formulated1990: private installation allowed; digital phone setup cost 5000 RMB1996: floor price eliminated1999: dropped to 1000 RMBJuly 1, 2001: fee abolished completely
// Side note: Chapter 571 had a reference to the Malthusian Trap that got censored… Please don't randomly report. Books like this—multi-angle, multi-sector explorations of how to reshape a nation's destiny—are almost nonexistent now. This one might be the last of its kind. If it disappears, it's gone for good.
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Chapter 565: The Wolf Is Here
The group's discussion stretched late into the night, lasting until nearly 11 p.m. At some point, they even had snacks delivered from logistics—by then, it had practically turned into a tea party.
Since it was so late and everyone was still keyed up, Su Yuanshan simply arranged for everyone to stay at Yuanxin's corporate hotel.
…
Back in his room, Su Yuanshan had just finished showering and was about to read a few pages of a paper before bed when his phone buzzed. At the same time, there was a knock at the door.
He glanced at the caller ID and immediately smiled. Walking to the door, he opened it.
Sure enough, there stood Shi Dazhu, looking rather sheepish.
"Shi-ge, come in."
"Heh, hope I'm not disturbing your rest?"
"Not at all. I'm a notorious night owl," Su Yuanshan said, stepping aside to let him in, then closing the door.
They sat on the living room sofa. Shi Dazhu stared at Su Yuanshan with serious intent, hesitating for a long time before finally mustering up the courage to say, "President Shan, there's something on my mind—I won't sleep well unless I say it."
Su Yuanshan smiled knowingly. "It's about mobile phones, isn't it?"
"Yes," Shi Dazhu took a deep breath and gave a helpless shrug. "Can't hide anything from you."
During the earlier discussion, after realizing that the government was likely to accelerate the development of the entire information industry, Shi Dazhu became convinced that a full push to popularize wireless communication was coming.
He could see the current domestic mobile phone market was expanding purely due to market forces—people had the means and desire, so they bought. There wasn't really any policy-driven growth.
And the reason why Cao Xiaoliang only talked about base stations and not handsets? Because network access fees were still too expensive.
A basic phone might cost a little over 3,000 yuan, even cheaper second-hand. So why hadn't it become mainstream? Because the access fee alone could cost several thousand—sometimes more than the phone itself.
If the new Ministry of Information Industry was serious about developing the telecom sector, the easiest breakthrough would be through eliminating access fees.
"President Shan, could you share where Yuanxin stands on base station deployment?" Shi Dazhu rubbed his hands together nervously. "I've got a simple model in my head. It might help me estimate just how hard the state intends to push this."
Su Yuanshan was once again impressed that Shi Dazhu had built a model. But he didn't directly answer—Yuanxin's base station strategy was confidential, after all.
After a pause, he said, "Shi-ge, you're trying to estimate future mobile phone user growth by analyzing deployment speed and capacity, right?"
"Exactly!" Shi Dazhu nodded eagerly.
"Then here's what I can tell you: even without considering deployment speed, the base stations we've already built can support over 50 million users. Plus, thanks to Yuanxin's all-in-one solution, those stations are designed for seamless upgrades. You can rest assured—our technology and strategy are aimed at a maximum population scale of over a billion."
"As for deployment timelines—I honestly don't have updates. No official word yet." Su Yuanshan smiled. "Shi-ge, you're more anxious than I am."
Shi Dazhu looked slightly disappointed, but quickly chuckled and sighed. "How can I not be anxious? I've even thought up a brand name and imagined the launch event."
Su Yuanshan couldn't help but laugh.
"You seriously want to make phones?"
"I do!" Shi Dazhu nodded. "Let me take a wild guess—Yuanxin aims to provide core tech and components, while positioning its own products at the high-end, leaving mid- and low-end markets to partners, right?"
Su Yuanshan didn't deny it. He nodded. "Exactly."
"Currently in China, aside from Yuanxin, the low and mid-range market is covered by Zhongxin, Kejian, and Bird. Oh, right—Kejian and Bird, are they using Yuanxin chips?"
"No. Kejian is working with Samsung, and Bird is partnered with Sagem."
"So if I want to make phones, can Yuanxin supply me with a solution?" Shi Dazhu looked intently at Su Yuanshan, afraid to miss even the slightest hint. "Semiconductors fall under the purview of the Ministry of Information Industry. It's all connected. I believe that going forward, all electronic devices will get cheaper. Aside from raw materials and tech breakthroughs, the biggest driver of cost reduction is market growth! If we've got the market, we can push phone prices as low as they'll go."
Hearing his analysis, Su Yuanshan paused briefly, then smiled. "Alright. No problem."
"How would that work?"
"Yuanxin has a comprehensive supply framework. At its core, Yuanxin is a tech firm focused on chip design and manufacturing—not a consumer electronics company," Su Yuanshan explained slowly. "So we don't reject any request for chips. And we never play favorites."
"In fact, I can promise you this, Shi-ge: if you can design a product that outperforms the Vidoo series, I'll prioritize your orders without hesitation."
Whether or not Shi Dazhu believed it, Su Yuanshan had to make that stance clear.
"Thank you!"
…
The next day, Su Yuanshan saw the guests off and returned to work.
By mid-June, news came from Silicon Valley: after rounds of assessment, Lin Benjian had finally convinced his team to move to Shanghai.
But right after that, Su Yuanshan encountered firsthand how powerful the so-called "mysterious forces" could be—Lin Benjian was stopped by U.S. authorities under suspicion of transferring restricted technology.
Su Yuanshan went on high alert. The entire Yuanxin legal team, the U.S. subsidiary's consultants, and even Texas Instruments intervened. Eventually, the team was released.
TI's involvement was crucial.
After all, Lin Benjian's team was entering Deyuan Semiconductor, in which TI held nearly half the shares.
Thanks to Su Yuanshan's support, Deyuan had gone into full expansion mode—one leg in capacity, the other in advanced process R&D. Deyuan's influence in the industry was growing rapidly, and in some areas of process innovation, it had already surpassed Texas Instruments.
So TI had to protect its own long-term interests.
In mid-July, Lin Benjian's team arrived in Shanghai in four groups. Su Yuanshan welcomed them personally.
On July 20th, Yuanxin's Vidoo 5M smartphones and iMusic service officially launched in North America. The promotional bundles included custom Sony headphones and a $20 YSmusic credit card.
Suddenly, the consumer electronics market was in a frenzy. iMusic sold out in three days; Vidoo 5M followed in a week.
A Wall Street article ran with the headline: "The Wolf Is Here."
In early August, Sony's President, Ken Kutaragi, arrived quietly in the provincial capital.
—
Supplementary Note:
An excerpt from internet archives:
"In 1995, Lezhi County Telecom began selling the first generation of Motorola phones made by a Tianjin joint venture. 'There were only 60 units, and they were in high demand,' said Mr. Jiang, a local technician. He learned about the sale early through a friend and was lucky to get one. 'The phone cost over 4,000 yuan, and the network access fee was 6,000,' he recalled. 'All in, it was more than 10,000 yuan.'"
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