“There is one point we must clarify: domestic storage chips are strictly prohibited from being resold abroad. We will conduct regular random checks on products, and all chips have serial numbers for traceability. Once discovered, Jiangnan Group will permanently ban the enterprise from purchasing any Jiangnan Group products!” Minister Xu announced.
“Naturally!” the domestic distributors in the audience responded. As for whether there would be resales, only heaven knew. For these distributors, as long as they weren’t caught, they were innocent.
If caught, it would only be bad luck, to have their products selected for random checks.
“Very well, Jiangnan Group storage chips, model jn0016m1, capacity 16MB, in batches of 1000 pieces. The unified factory price within China is 10,000 RMB per batch. The China Electronics Industry Alliance has set a unified selling price of 9,600 RMB per batch. For those interested, you can press the number of batches you wish to purchase on the input device in front of you after the commencement, and then press the confirm button to finish inputting!”
“If the number of purchases does not exceed 100 batches, then everyone will naturally get what they desire. If it exceeds 100 batches, we will adhere to the principle of equal distribution, ensuring that all participating enterprises in the procurement conference have a fair opportunity to purchase!” Minister Xu stated.
“This is quite novel!” Upon hearing Minister Xu, those attending the procurement conference for the first time found this method of procurement refreshing. There was no need to crowd into offices for registration, nor to spend money on wining and dining the procurement department. Procurement was entirely based on equal distribution, which was very fair.
However, Park Kang Hee and Yamamoto Ryuichi, who were present, looked rather displeased. They had initially expected to leverage the dominant market positions of Samsung and Sony to force Jiangnan Group to allocate a large portion of the supply to them. Now, with this talk of equal distribution, their plans were severely hampered.
“Can we invite some enterprises to participate later? Since it’s equal distribution, we could acquire more supply through them!” Park Kang Hee mused.
“I know what you’re thinking, it’s useless!” Yamamoto Ryuichi said with a wry smile. “Don’t you remember? When we entered, our invitations were checked. This means only enterprises that received an invitation from Jiangnan Group are eligible to attend this procurement conference.”
“Trying to bring in proxies won’t help, unless they also receive an invitation from Jiangnan Group!”
“That’s true…” Park Kang Hee nodded with a displeased expression. At this moment, Minister Xu, without rushing the participants to input their purchase numbers, continued, “There is one more rule I must declare: this procurement will prioritize enterprises within the China Electronics Industry Alliance for purchase. If the alliance members fulfill the 100 batches, then enterprises outside the alliance will have to wait for the second batch of production.”
“Why?” Many enterprise representatives present stood up indignantly, questioning Minister Xu.
“Because this is the regulation of the China Electronics Industry Alliance!” Minister Xu replied calmly. “According to the alliance’s regulations, all alliance enterprises’ domestically sold products will be preferentially supplied to other alliance enterprises. Only after the supply meets the needs of alliance enterprises can it be supplied to enterprises outside the alliance.”
“This is illegal! You have no right to restrict the transaction parties!” an enterprise representative exclaimed in exasperation.
“We are not restricting transaction parties. We are merely prioritizing supply to affiliated enterprises when demand exceeds supply. This is in accordance with legal regulations. If you are dissatisfied with our policy, you are welcome to sue us in court; we are ready to face it!” Minister Xu stated coolly, effectively silencing the other party.
“Furthermore, actually, for the representatives of non-alliance members present, we extended invitations to all of you when the alliance was formed over a month ago, inviting you to join. You chose not to join the alliance then, and therefore cannot enjoy the preferential terms brought by the alliance!”
“Exactly, Minister Xu is absolutely right. Don’t make a fuss. These are alliance rules.”
“Not joining the alliance was your company’s decision, so don’t cause trouble here.”
“It’s fine, we might not be able to take all the orders, and you might still have a chance!” the representatives who had joined the alliance chimed in with sarcastic remarks, making many of them furious.
However, no one dared to leave, as they had a high demand for these storage chips and desperately wanted to obtain some supply if possible.
Unfortunately, by the time the alliance members completed their orders, all 100 batches of jn0016m1 chips were fully reserved. The total reserved quantity reached an astonishing 426 batches. As a result, each company could only obtain 25% of their desired quantity, which was incredibly disappointing.
The subsequent sales of various chip models largely followed the same fate. Storage chips below 8GB were all snapped up by alliance members. Even the higher capacity chips, 128MB and 256MB, with 1000 batches each, totaling 1 million pieces, were still sold out, with a total demand of 3210 batches.
These were naturally all purchased by buyers within the alliance, with not a single piece going to non-alliance users.
Only the 8GB, 16GB, and 32GB chip levels were not entirely sold out. Non-alliance users could place orders at a price 2% higher than that of alliance members.
However, at present, the market position of storage chips above 8GB was somewhat awkward. The demand was not high, but the price was very expensive, and enterprises were hesitant to purchase large quantities of chips at this level, so there were not many interested buyers.
After non-alliance members placed their orders, there were still remaining chips in these three categories, with the 32GB chips having the largest surplus.
Seeing the alliance members walk away with their acquired goods, the non-alliance members looked at the high-capacity chips in their hands that were difficult to sell, and felt immense regret, lamenting their foolish decision to withdraw from the alliance midway.
Fortunately, the alliance’s doors were not entirely closed. The alliance would recruit new members every year at its national conference. Once they joined, they would also receive similar treatment.
However, they would have to wait for a year, until August of next year. This was truly a terrible prospect.
With this thought, the resentment and regret in the hearts of these non-alliance representatives intensified.
The foreign procurement agents, who had been calmly observing, paid no attention to the suffering of these individuals.
After all, none of them or their companies were alliance members, and their allocated quota of 8 million pieces seemed sufficient.
After the domestic chip orders concluded, Minister Xu immediately announced, “Next is the 8 million pieces order for foreign regions. The rules are the same as before, and I will not repeat them. Let us directly commence the sales of the jn0016m1 external chip. The pricing is 2000 USD per batch. All taxes except for China’s VAT will be borne by the purchaser. The total quantity is 2000 batches, each containing 1000 pieces!”
As Minister Xu finished speaking, the foreign procurement agents, who had been calmly composed, suddenly changed their expressions. One of them even stood up and said, “Minister Xu, since these are ex-factory prices excluding tax, why is the price we are receiving 50% higher than the Chinese price?”
Previously, the domestic price for the 16MB chip was 10 yuan per piece, but the international price was 2 USD per piece. Calculated at the current exchange rate, this was equivalent to 15.4 Chinese yuan per piece, a price that was indeed more than 50% higher.
This naturally caused immense anger among all the foreign procurement agents present. This was clearly an attempt to rip them off!
“Please, gentlemen, calm down. We treat our domestic and international customers equally. You may have overlooked the data I provided: the foreign product model is different from the domestic one. The domestic product model is jn0016m1, while the foreign model is jn0016m1 external. These are two different models!” Minister Xu explained.
“What’s the difference? It’s just an extra Chinese word, isn’t it?” the other party retorted.
“It’s not just a Chinese word. The chips with the ‘external’ designation are specially designed by us for the foreign market. They offer superior performance, greater reliability, and better compatibility than the domestic chips!” Minister Xu stated earnestly, while the domestic buyers present were struggling to suppress their laughter.
Superior performance was pure nonsense. They were all 16MB chips, so how could they be superior?
As for greater reliability, those who understood knew that this was nonexistent. They were all from the same batch of silicon wafers, produced on the same production line. How could one be more reliable than the other? Had each chip been tested for thousands of hours?
As for the final compatibility, they admitted their ignorance; they had no idea what compatibility for chips entailed.
“Huang He really has the guts. It’s blatant that they’re selling at a higher price abroad than domestically, just to fleece foreigners!” several domestic buyers exclaimed in their hearts. This was contrary to the current domestic import and export market.
For domestic import and export enterprises, the export price of products was often significantly lower than the domestic selling price. Even if the price seemed higher, it included tariffs, which were borne by the exporter.
Otherwise, if tariffs were excluded, products abroad would undoubtedly be cheaper and of better quality!
Why did this happen?
Apart from domestic enterprises treating foreign customers as esteemed guests, constantly catering to them, and feeling inherently inferior,
The main reason was that domestic products lacked technological content, often being products that foreigners disdained to produce. Even with the advantage of lower prices, if you could make it, so could they.
Take making shirts, for example. If one enterprise made money exporting shirts abroad, hundreds or even thousands of surrounding enterprises would emerge to do the same, competing with each other and driving down the export price to one-third of the original level, with an average profit of less than a few cents per shirt.
This is not to satirize some perceived inherent flaw in the Chinese people. If there is any inherent flaw, it is not a Chinese flaw, but a human flaw. All humans possess such flaws, so there is no need for self-deprecation or pride.
The point here is to emphasize that technology is the fundamental determinant of industrial development. This is why China is vigorously developing Industry 3.0. Without high-tech products, you will forever be exploited by other countries, relegated to being a pitiful sweatshop.
Citizens of other countries can afford to not work, lounge at home, and receive several thousand dollars from the government each month, ensuring they have food and drink, and live a life of freedom and sweetness.
Meanwhile, the people of certain countries wake earlier than chickens, sleep later than dogs, consume grass, and exude blood. They work diligently from 996, only to receive a meager salary just enough to survive.
If they encounter any significant illness, their entire family could collapse instantly.
Those public intellectuals who envy the moons of foreign countries and the lives of the upper class there fail to realize that these free and beautiful lives of the privileged are built upon the tragic fates of the people in numerous underdeveloped regions and countries, painstakingly extracted from their blood and lives.