Chapter 208: Hong Kong Panda Isn’t A Panda!
In Hong Kong, inside the electronic components store at 646 Nathan Road, Hu Xiaoqing, as usual, came to the store for a tour every Monday.
(1949, Hu Xiaoqing at the electronic parts store at 646 Nathan Road)
This habit of his had remained unchanged for over ten years.
This was the area where he made his fortune, and it was also the window for Atlas Electronics to showcase itself externally.
The name Hu Xiaoqing was somewhat unfamiliar to the vast majority of Chinese people, and even most local Hong Kong people had not heard of this name.
But he had a resounding nickname: Father of Hong Kong’s Electronics Industry.
He was born in 1924, grew up in Shanghai, and attended Shanghai Jiaotong University, majoring in Management.
In 1948, with 500 US Dollars in his pocket, he came to Hong Kong and opened a small shop selling electronic parts at 646 Nathan Road.
Although he had not received formal training in Electrical Engineering, he had always been fascinated by Electrical Engineering.
At the beginning, business was very tough, with only 100 Hong Kong Dollars in daily income, and he relied heavily on loans to make ends meet.
In 1947, America invented the transistor, and in 1949, Rediffusion Radio (a private Radio Station) entered the radio market, radios began to rapidly popularize in Hong Kong, becoming the most popular form of entertainment for the public at the time.
Compared to television, the price of radios was undoubtedly much more affordable.
Subsequently, Hu Xiaoqing obtained the distribution rights for German Blue Wonder radios in Hong Kong, and business began to expand rapidly. Starting in 1958, he assembled transistor radios in Hong Kong using Japanese transistors, with Sony behind him.
Sony’s founder Morita Akio personally came to Hong Kong to discuss cooperation with Hu Xiaoqing.
Why?
Because Japan wanted to break into the Hong Kong market, England had high tariffs to protect its own electronics industry from being destroyed by cheap Japanese goods, and Japan’s idea was to go through Hong Kong, pass through a body of water in Hong Kong, and then sell to England and the entire British Commonwealth countries.
Hu Xiaoqing’s cooperation with Sony was also Sony’s first overseas factory in history.
It was called a factory, but it was completely different from the factories understood in later generations; at best, it could only be considered a small workshop.
(Roughly like this, the production line of the Upper Roof Hot Coil Factory displayed in the Hong Kong Labour Workers Museum)
According to Sony’s company history website, the factory was an apartment with two production lines, staffed by 60 female workers responsible for assembling transistor radio kits brought from Japan; the factory mainly assembled TR-510 and TR-623.
During the cooperation period, Hu Xiaoqing’s factory assembled 6000 radios per month for Sony. But the honeymoon period between Hu Xiaoqing and Sony was very short, only two years, and in 1960 after two years, Sony directly established a factory in Ireland and completely stopped cooperating with Hu Xiaoqing.
It was said to be because of the Ireland factory, but in reality, it was because of the threat from Hong Kong.
Fortunately, Hu Xiaoqing and Sony were each harboring different dreams despite sharing the same bed; he had always been preparing two plans, importing transistors from America and England to make his own radios.
Hu Xiaoqing began manufacturing radios under his own brand, named Blue Bell, Blue Bell.
(Blue Bell 7, production time 1960)
(Internal structure of Blue Bell 7, composed of seven transistors)
Even because of the impact from Hong Kong, that’s right, with transistor radios as the main business, Hong Kong could achieve lower prices than Japan, Hong Kong radios impacted the Japanese market, forcing Japan to ban domestic transistor exports to Hong Kong in 1962.
In May 1962, he founded Universal Electronics and merged its business under the Atlas name. Atlas’s Chinese name means global.
According to an article about Atlas in the 1963 International Management magazine, he entrusted the company’s management to three managers of different nationalities: an Israeli named A.M.Cappon responsible for sales, an English person responsible for finance, and a Chinese Engineer responsible for operations.
At this time, Universal Electronics had 400 workers, producing 80,000 six-transistor radios per month, which took 90 days to ship to New York.
Section Chief Zhang had once worked at Universal Electronics for a short half month.
In 1967, according to the trade bulletin issued by the Hong Kong Industry and Commerce Department, Atlas produced 250,000 radios per month. The company was very successful and listed on the newly established Far East Stock Exchange in 1969, becoming the first electronics company listed on the Hong Kong stock market.
Hu Xiaoqing originally thought today would be an ordinary day like usual; he picked up the Hong Kong Trade Monthly on the table, a magazine published by the Hong Kong government that regularly reports on trade and industrial consulting, naturally including electronic products.
“At the 1965 spring Leipzig Trade Fair, a small electronic calculator named ‘Panda 01’ was displayed, shocking the global electronics industry with its advanced scientific computing functions, pocket-sized design, and innovative LED display screen.”
The front-page headline of the Hong Kong government’s magazine was news about Chinese electronic products, showing the shock that Panda brought to this era.
From Leipzig spreading to London, Paris, New York, this wave finally blew to Hong Kong.
Hu Xiaoqing read it extremely seriously, because for others it was news, but for him, he needed to discover business opportunities from it.
China can make it, can he make it.
How is the market for this thing.
If they can’t make it, can it be imported from other places.
When China launched the Panda Radio at the Leipzig Trade Fair that year, he also saw the report in the Hong Kong Trade Monthly, and Hu Xiaoqing keenly realized that China’s design was much better than theirs.
Although he couldn’t say exactly where it was better, it was just more exquisite than theirs.
So he almost immediately decided to have the factory remake the molds, copying the Panda; even if the internal Circuit Design couldn’t be exactly the same, the appearance could at least be matched.
The black-and-white plastic casing wouldn’t be hard to replicate.
By ripping off the Panda, his Universal Electronics made a fortune in Hong Kong and even Southeast Asia.
In this spacetime, intellectual property awareness on the Chinese side was almost zero.
The lack of information flow meant that Hu Xiaoqing’s behavior was unknown to the Chinese side.
Even if China wanted to pursue responsibility, it would be very difficult between the two camps.
Later, all the radio factories in Hong Kong followed Hu Xiaoqing’s lead, making knockoff versions of the Panda Radio.
Because he did it the earliest, he made the most money.
And now, after seeing the function introduction of China’s portable calculator, Hu Xiaoqing almost immediately knew that this thing had nearly infinite market potential.
Individuals, companies, universities, government agencies—no one would not need this thing.
This was a mobile gold mountain.
The question is, how did China do it?
Japanese people can’t make it, Americans can’t make it, English people can’t make it.
He, a Hong Kong radio factory boss, also can’t make it.
“How did China fit such complex computing functions into such a small machine, while achieving such precision and such good battery life.” As a professional, Hu Xiaoqing was utterly baffled.
“Boss.”
Before Hu Xiaoqing could greet the customer who approached, the man wearing a black round hat and a trench coat had already disappeared from his sight.
Only a red invitation left on the counter, reminding him that someone had indeed come earlier.
Red was sensitive enough; with some hesitation, Hu Xiaoqing picked up the invitation on the table:
“Business cooperation, looking forward to your arrival; if you come, you will not be disappointed.
May 1st, 9:30 a.m., 3rd floor, 172 Nathan Road, Tsim Sha Tsui, Hong Kong”
May 1st, that is, seven days later.
The address on it was not far from his place; combining the time and this red invitation, Hu Xiaoqing immediately remembered where it was.
This was a newspaper company; everyone knew he came from the Mainland, formerly called Baihua Chaos, changed to a new name six years later, starting with “new”.
(Refer to it as Baihua Society hereafter)
“What does Baihua Society want with me?” Hu Xiaoqing pondered.
Combining the magazine content, he had a bold guess in his mind: Could China be wanting to sell their electronic products to Hong Kong?
But no matter what the purpose, just the possibility was enough to make him go there.
Tsim Sha Tsui Nathan Road in this era was the commercial heart of Hong Kong, with bustling traffic on the streets and shops lined closely together.
England knew what kind of institution Baihua Society was and what functions it had; they never interfered.
The Hong Kong government watched from the sidelines as tigers fought; Baihua Society was one side, and China Travel Service was the other.
English people enjoyed watching you fight.
But starting today, China’s Baihua Society had to take on other tasks.
Public opinion offense and defense was important, but economic benefits were even more important.
172 was an unremarkable commercial building, but the Baihua Society meeting room on the 3rd floor was a different world.
Outside the window, the faint cries of street vendors could be heard, contrasting with the quiet inside the room.
This was a very cramped room.
So cramped that only two people could sit, and even turning around inside was difficult.
“Mr. Hu, hello. Let me give a simple self-introduction: I’m Zhou Nan, recently joined Baihua Society, just came from Africa, very pleased you came as promised.”
Zhou Nan was very young, looking at most forty years old, wearing a dark gray suit, hair combed meticulously.
Transferred from Africa, Hu Xiaoqing pondered inwardly, how strange.
However, the impeccably dressed Hu Xiaoqing appeared very enthusiastic on the surface, his every gesture carrying a businessman’s warmth and shrewdness: “Hello, I’m Hu Xiaoqing, a businessman. I feel greatly honored, but also more puzzled, puzzled about what areas we can cooperate in.”
Zhou Nan smiled and said: “Mr. Hu, let’s be frank. Are you familiar with the Panda brand?”
Hu Xiaoqing now understood why they were talking here.
The cramped room was more suitable for discussing such content.
Hu Xiaoqing nodded; there was no need to play dumb in this setting: “Mr. Zhou, of course. Panda radios left a deep impression on me; they have unique aspects in appearance design and Circuit Design, and perhaps advantages in other areas too, fully embodying its special qualities.
Besides that, the Panda 01 electronic calculator recently exhibited at the Leipzig Trade Fair was even more impressive.
Pocket-sized design, LED display screen, and scientific computing functions—all very attractive.”
Hu Xiaoqing appeared calm on the surface, but waves surged in his heart. He knew this was a once-in-a-lifetime opportunity.
The Mainland was such a vast market, such a huge force.
He made 80,000 radios a month; cooperating with the Mainland could easily multiply that number by a hundred, even swallowing up the market of Japanese companies.
Behind Hong Kong stood England.
When English companies and Japanese companies competed at the same table, both could only engage in free trade.
“We hope to cooperate with a local Hong Kong radio factory, and Mr. Hu, you are one of our selected targets.”
Hu Xiaoqing immediately became alert inwardly: who else?
Most likely the Yuan family; the Yuan family started later than him, but not by much; they also made radios.
(Left image is 1960s Kendy portable radio, right image is the founder family of Dayton Group)
Hu Xiaoqing thought again: unlikely, because compared to the Yuan family, he had a natural advantage.
Yuan family had a core member brother who joined KMT, sister married to an American intelligence officer, and he himself had been in the American Army in 1949.
The Mainland couldn’t possibly cooperate with such people, Hu Xiaoqing pondered.
But he wasn’t certain.
Because China wanting to do business itself was suspicious.
“We hope to sell Panda brand products through your sales channels; we export Circuit boards, then you assemble them. Just like how you cooperated with Sony in the past, cooperate with us the same way now.” Zhou Nan said.
The cooperation method proposed by Zhou Nan was not out of Hu Xiaoqing’s expectations.
Even that China proposed an assembly factory model surprised Hu Xiaoqing; that Chinese people could have such a concept.
“Didn’t they say old G doesn’t understand economics? Isn’t this concept pretty good?” Hu Xiaoqing pondered inwardly.
He smiled broadly on the surface: “Of course, I’m very willing to cooperate. From the actual Panda 01, besides basic operations, it can calculate square roots, logarithms, and trigonometric functions; the LED display screen has low power consumption and can display eight digits. This is absolutely a one-of-a-kind product in the market.
Exquisite appearance, portability is unmatched. I can imagine all potential consumer groups will love it.”
Hu Xiaoqing subconsciously thought that China’s cooperation with him was to sell the Panda 01 electronic calculator.
This thing has high profits.
America, England, Japan don’t have it—global exclusive.
Global exclusive also means high technology, high technology means limited production capacity.
Limited production capacity means limited quantity imported from the Mainland here, small quantity he can handle.
With this channel, they have to sell high-profit goods.
But Zhou Nan lightly tapped the table with his finger, slowly and firmly shaking his head: “No, what we want to cooperate on is not the calculator, but the radio.”
Calculator?
Calculators are generally cornered by 5000 US Dollars; you, a local Hong Kong businessman, also want a piece of this business? Can you handle it?
Hu Xiaoqing’s thoughts raced: radio?
Radios are a very brutal, highly competitive market.
Hong Kong, Japan, America, Germany, Taiwan, etc.—almost all globally notable countries have this industry.
Among them, the strongest competitiveness is definitely Japan; good quality and low price is the advantage.
And more fatally, this thing is too competitively intense, profits too transparent; unless China can export in massive quantities, relying on such bulk export dumping, otherwise profits are negligible.
And bulk export means risk.
This kind of risk is also not something he can handle.
After Zhou Nan finished speaking, the smile on Hu Xiaoqing’s face froze; he really couldn’t think of how to do this business:
“Mr. Zhou, sorry, this risk is too high. Chinese electronic products fundamentally can’t be exported to Hong Kong through normal channels.
Even just radio Circuit boards, I can’t think of how to export them in bulk.
It’s not that I don’t want to do this business, it’s that I can’t.”
Zhou Nan’s words surprised Hu Xiaoqing again: “Don’t worry about that; we’ll handle the goods. What you need to do is sell them globally.
Likewise, it has to be called Panda.”
Hu Xiaoqing first felt a glimmer of hope, then showed difficulty:
“Mr. Zhou, first, I’m not sure how you can handle it; I must say this matter is definitely not as simple as you think.
That group from China Travel Service has been watching you.
If your electronic products are exported here in bulk, they’ll notice sooner or later, and after noticing, complain to the Hong Kong government, easily ruining your plans.
This is ultimately not a long-term solution.
Additionally, calling it Panda is too conspicuous, almost reminding the outside world that we’re selling Mainland goods.
You’re talking to several companies at the same time this time; everyone can guess who is cooperating with you and who isn’t.
For example, if I cooperate with you, and later I start selling Panda radios, those who came to Baihua Society to chat will immediately guess that I’m cooperating with you.
This business might last half a year normally, but calling it Panda might only last half a month.”
What Hu Xiaoqing said were heartfelt words.
After applauding, Zhou Nan said: “Mr. Hu, you don’t need to worry about these.
Besides, haven’t you been happily selling our Panda radios? Now with real Pandas for you to sell, you’re worried.”
Hu Xiaoqing took a deep breath, feeling his hands trembling slightly; he said: “We imitated because Chinese products couldn’t be sold over, so we competed with Japanese companies by selling Pandas.
If Chinese goods could be sold over, we definitely wouldn’t”
Before he finished, Zhou Nan waved his hand: “We don’t mean to blame you; just that if you can sell radios that look like Pandas, you can sell genuine Pandas.
Besides, you’re selling Hong Kong Panda, not making you sell Mainland Panda.
Assembled in Hong Kong—how is it not Hong Kong Panda!”
Zhou Nan’s last sentence was resolute.
Hu Xiaoqing finally understood: pass through Hong Kong, China was determined this time to sell its advantageous products to the whole world.
Just one thing he hadn’t figured out: what was China’s confidence based on.
What gave China the belief it could handle Hong Kong customs.
Or rather, not going through official channels, what guaranteed the Hong Kong government wouldn’t investigate.
“What you’re worried about won’t happen; I can only say that.” Zhou Nan continued: “Mr. Hu, any risks you can think of, we have no reason not to think of.
Go back and consider it carefully.
Now it’s radios; in the future, electronic calculators aren’t out of the question. Moreover, with the electronics industry capabilities we’ve shown, in the future, Hong Kong Panda will only have more and better electronic products.”
