Chapter 39

Part Two: The Allure of Business, Chapter 39: Distributing Digital Mobile Phones

They had agreed to have dinner at Xu Si's home. Before leaving the Xinhaitong Building, Xu Si called the convenience store at the entrance to her alley. Five minutes later, she called again. This time, her mother answered, and Xu Si told her she would be bringing Zhang Ke home for dinner.

The steering on Xu Si's bicycle was very loose. Zhang Ke was not used to riding it and nearly ran into the curb, frightening Xu Si so much that she refused to let him carry her. Zhang Ke was half a head taller than Xu Si. Sitting on the rear rack, he watched her full, slightly upturned bottom sway. Her pale yellow blouse hugged her body, her slender waist taut yet fleshy. Now and then, a strip of skin showed, soft and smooth as jade. Watching the exaggerated, exquisite curve joining her full hips to her slender waist sent a sudden tingle through him. He asked Xu Si, "There's nowhere to put my hands. Can I hold your waist?" Xu Si ignored him.

When they reached Xu Si's home, no one was there. They guessed her family had gone out to buy groceries and pushed open the gate into the courtyard. Xu Si brought out an electric fan and sprinkled floral water on its blades, releasing a jasmine fragrance. Zhang Ke spotted a grape trellis in a corner of the courtyard. The grapes were still green at this time of year. He ran over and jumped, trying to pick one, but failed.

Xu Si giggled and brought over a stool. She stood on it, but the vines were still too high. With one foot lifted and the other on tiptoe, she exposed a strip of pale skin at her waist. Zhang Ke clearly saw a red mole beneath her left ribs.

"How can you eat green grapes? If they make your teeth sore, how will you eat dinner?" Xu Si's mother pushed open the courtyard gate and came in carrying a bag of groceries. "Go and look in Third Aunt's courtyard. Her grapes ripen early. If I'd known you wanted grapes, I could have bought some at the market. I only bought some apricots. I don't know whether you like them."

Zhang Ke smiled and greeted Xu Si's mother as Auntie. She went off to prepare dinner, while Zhang Ke urged Xu Si to keep picking the green grapes. "I like sour things."

"I can't reach. You're a little taller than me." Xu Si held Zhang Ke's arm as she climbed down, then let him get up to pick the grapes while she steadied the stool. Zhang Ke picked a bunch of green grapes and bent down to get off. Xu Si's neckline hung slightly loose, revealing pale cleavage, soft and smooth as jade. He could not resist leaning forward for another look, only to receive a slap from her.

Smiling, Zhang Ke handed the grapes to Xu Si to wash. By dinnertime, his teeth really were too sore for him to eat the dishes. Xu Si's mother laughingly scolded her for letting Zhang Ke eat such green grapes. Xu Si told them her job had been settled, without going into detail, and her parents were immensely grateful. When he left, they wanted him to take home an extra wild softshell turtle they had bought. Wild softshell turtles were not cheap even in 1994, and taking one home would be hard to explain. Zhang Ke only asked Xu Si to help him pick a few bunches of grapes to take home.

The next day, when Zhang Ke arrived at the Xinhaitong Building, Xu Si was already busy there. Several pots of clivia and Puye Grass stood in a corner, making the bright, tidy office look full of life. Xu Si had brought all the potted plants over from her courtyard on her bicycle.

Xu Si wore a typical professional woman's outfit that day: a short-sleeved blouse with fine gray checks that exposed her snowy-white arms, a cement-gray straight skirt, and shiny stockings that, to Zhang Ke's eyes, fell far short of the texture of her skin. Her long hair was pinned up behind her head with an amber-colored acrylic hairpin, making her look considerably more mature.

Zhang Ke walked over and took the black tortoiseshell glasses off her nose. "Why do these look so odd on you?" He held them up and examined them. The lenses turned out to be plain glass. He stared at Xu Si for a while, chuckled, and handed them back.

Knowing that her outfit today was a little strange, and unsettled by Zhang Ke's gaze, Xu Si tucked a strand of hair behind her ear and put her glasses back on. Seeing him still staring at her, now even propping his chin on his hand, she shot him a look. "If you've got nothing to do, don't get in my way."

"That look just now-that felt familiar." Zhang Ke shamelessly sat down opposite her. "If I don't tell you, will you know what there is to do?"

When Zhang Ke had mentioned to Xie Wanqing the idea of using Haiyu Company's resources to distribute telecommunications equipment, he had not merely been talking. He had spent his summer vacation gathering more detailed, comprehensive information and was only waiting to find suitable people to help him.

Before 1994, mobile phones in China belonged to analog mobile communications systems and were commonly known as "big brothers." Analog phones did not separate the handset from the subscriber card. An unprogrammed handset could not be used directly; the operators of the time-the local post offices-had to assign it a phone number and program the corresponding electronic number into it.

This technical feature gave the postal and telecommunications system complete control over mobile phone sales.

China Unicom, which was only established in 1994, and the former Ministry of Posts and Telecommunications' Mobile Communications Bureau successively rolled out G* digital communications networks and began providing services, creating a domestic mobile communications landscape in which analog and digital networks operated side by side.

Digital G* phones, the mobile phones that would become commonplace in later years, used terminal technology that separated the handset from the subscriber card, making phone sales technically independent of the Ministry of Posts and Telecommunications' system.

In 1994, more international manufacturers entered China's mobile phone supply market. Besides the two major brands, Motorola and Nokia, brands including Ericsson, Philips, Siemens, Alcatel, and Sony also entered the domestic mobile phone market in succession.

For Ericsson, which had just entered China's mobile phone market and had no distribution infrastructure, relying on the existing postal and telecommunications system's purchasing and sales channels to compete with a powerful commercial rival like Motorola was not an option. It began using a multilevel distribution system of master and subordinate agents to supply the market, taking advantage of distributors' control over retail outlets to get its products into major and medium-sized cities across the country quickly.

The summer of 1994 had only just passed, and China's mobile phone market had only just reached this stage. Few domestic merchants involved in distributing and selling telecommunications equipment had yet sensed the business opportunities in digital phones.

Zhang Ke very much wanted to describe to Xu Si just how popular Ericsson's first Chinese-language digital phone, the GH398, launched in 1995, would be in China. In 1994, Ericsson's operation in China had only just been upgraded from a representative office to a subsidiary, and its multilevel distribution system had only just been established.

Using Haiyu Company's resources to secure Ericsson's distribution rights in Haizhou City and take a share of the booming sales that would last for several years from Ericsson's entry into China's mobile phone market had been Zhang Ke's intention from the outset.

Zhang Ke talked to Xu Si about digital communications all morning. For the most part, he spoke and she listened. By the afternoon, his voice had inevitably grown a little hoarse, which also made him sound somewhat more mature. Shengxin Company was Ericsson's master distributor in eastern China. Zhang Ke contacted its deputy marketing director directly. Judging by her voice, the woman, named Ye Xiaotong, could not have been very old.

Although Xie Zhan had made a complete mess of Haiyu Company, it still had some reputation in the industry. In fact, Ericsson's provincial distributor for Donghai Province had already been selected back in May. Ye Xiaotong asked why Haiyu Company had not sought Ericsson's provincial distribution rights at the outset, but had instead waited until now for a subordinate office to pursue regional distribution rights.

Xie Zhan had not left without putting up some resistance when Xie Wanqing drove him out of the company. At the very least, many of the rumors damaging to Haiyu Company had come from his mouth.

Zhang Ke believed Ye Xiaotong had also heard those damaging rumors, but he explained without betraying anything, "Our company missed an opportunity because we didn't sufficiently understand the prospects for digital communications at the time. Having our office pursue the distribution rights for Haizhou City now is a remedial measure we've been forced to take."

Sure enough, Ye Xiaotong next raised the issues of funding and distribution channels.