Chapter One Hundred and Fifty: Hongdu Has Arrived

Since the project required the use of the base’s foreign exchange reserves, extreme caution was necessary. Chief Engineer Yu had to handle the negotiations personally; in this day and age, foreign exchange was an incredibly precious resource.

"We can find a way to secure the foreign exchange, but the exchange rate is something we need to discuss carefully. There are already private channels for currency exchange, and one only needs to ask around to learn those rates. Of course, as partners, I naturally want to offer a 'friendship price,' so let's stick to the official state rate for export-oriented foreign exchange."

The export foreign exchange rate, as previously mentioned, was slightly higher than the official domestic rate. The base could apply for this rate directly through the State Administration of Foreign Exchange, so offering this rate to Factory 0780 was, in every sense, a highly conscientious gesture.

Factory Changhong had handled a few export deals in the past. Although their technology in the eighties wasn't particularly impressive, there was still a demand for it in foreign markets, specifically among their African counterparts.

Understanding the state’s export policies, Factory Manager Hu knew that securing foreign exchange at this rate was a significant favor. Since Base 0011 showed such sincerity, Factory 0780 saw no reason to be overly coy.

Factory Manager Hu proposed a shareholding ratio for the new factory that reflected his sincerity. After all, Factory 0780 was not a destitute enterprise and could not afford to appear weak.

"That sounds excellent. Our new factory construction will require roughly three to four million US dollars in foreign exchange, and we will certainly provide the corresponding amount in Renminbi. We can agree to a fifty-fifty split in equity, but we require operational control of the new factory. Your side is welcome to station personnel there for oversight."

Yang Hui and Director Yu were quite satisfied with this proposal; a fifty-fifty split was just right. Chief Engineer Yu nodded in satisfaction, prepared to approve the project. When he arrived, the ten managers of the base had held a meeting and granted him full authority to handle this radar project.

Just as Chief Engineer Yu was about to speak, Yang Hui, mindful of potential pitfalls, stepped in. There was a major trap that had to be addressed, even if Factory 0780 might not yet realize the loophole existed.

"Operational control for you is acceptable, but we must have your commitment that as long as this new factory exists, any new electronic components developed by Factory 0780 must be manufactured there. This is a prerequisite for our cooperation."

If this wasn't clarified now, it would be difficult to manage later. After all, the new facility was merely a factory, not a company; it lacked research and development capabilities. If Factory 0780 decided to manufacture their new technologies elsewhere, build a new factory, or outsource to Factory Changhong, the base would suffer a massive loss.

Yang Hui’s logic was sound. Once Chief Engineer Yu understood the implication, he remained silent, waiting for Factory 0780’s response. If they couldn't agree, there would be a problem.

Factory 0780 had not anticipated such a requirement, but upon reflection, they realized the loophole was indeed real and needed to be closed. Having no intention of acting deviously, they accepted the condition readily.

"We accept this condition. We are investing so much money in this new factory; no one would dare to act recklessly. Do you have any other concerns? If so, please speak up."

After careful thought, Yang Hui felt there were no further major issues and nodded at Chief Engineer Yu, signaling that they could proceed.

Seeing that even Yang Hui—the most cunning individual at the base—had nothing more to add, Chief Engineer Yu finally felt confident enough to sign the preliminary letter of intent.

And so, in that modest meeting room, a rather low-key signing ceremony took place. The factory, which did not yet even have a formal name, would eventually grow and thrive step by step.

With the radar issues settled over three days, Chief Engineer Yu, Yang Hui, Liu Jun, and a large group of aerodynamic designers began the long journey back to the base. Since they couldn't drive from Fucheng to the base, they had to take the train, swaying and rumbling their way home.

They crossed mountains and rivers, passing through mountain passes and tunnels. After a day and a half, they finally reached the base. The aerodynamic design was complete, and although Yang Hui had intended to return to the Second Institute immediately upon leaving the train, he realized there were still some loose ends to tie up, so he continued on to the First Institute.

After disembarking, the graduate students whom Yang Hui had "cajoled" into coming were completely stunned. Base 0011’s First Institute was incredibly remote.

Having toured the entire facility with Yang Hui, they discovered that the base was nothing more than a pure research outpost; aside from the base complex itself, the surrounding areas were quite dismal.

Yang Hui, having arrived at the base only recently himself, understood the feelings of these students who had been living in the bustling capital just a month ago. The contrast was simply too stark.

He offered some patient guidance: "I know, it’s quite different from what you expected. But it’s not all bad. There is no hustle or superficiality of a big city here; it is a place where you can truly focus on technology. If you find it too hard, just think of the technicians still working at the wind tunnel base in Fucheng."

Without comparison, one doesn't know how fortunate they are. These people had spent over twenty days at the wind tunnel base, and compared to that facility—where even sunlight was a luxury—the Yunnan-Guizhou Plateau seemed manageable, as the clouds were thin and sunlight was not considered a rarity.

After comparing, they realized their luck. They settled their minds and continued to follow Yang Hui. Since they were here, they might as well make the best of it. At least there were projects to work on and sufficient supplies. By working hard and sleeping on time, they wouldn't have to dwell on it too much.

After arranging accommodation for the fifteen graduate students—each in a single room, just like Yang Hui—it became clear that the base’s living conditions were quite decent, or at least that they placed high value on talent.

A few days later, the aerodynamic data for the new aircraft was fully finalized. The carpentry team that Yang Hui had proposed forming at the Second Institute had now been transferred to the First Institute, perfectly suited for the development of the new aircraft.

Entrusting the aerodynamic design to the carpentry team to build a physical model, Yang Hui caught a glimpse of a radio-controlled model flying nearby, and a sense of familiarity washed over him.

He thought to himself: Perhaps the new trainer aircraft could also be tested via a radio-controlled model first. Wind tunnel testing, after all, is never as good as actually flying in the sky.

Yang Hui did not expect that in the near future, they would indeed build such a model, though its purpose would change entirely.

The wooden model of the new aircraft was completed. Seeing that the aerodynamic design was almost identical to the JL-10 (L-15) trainer he had seen in his previous life, Yang Hui felt relieved.

He had originally planned to switch to a belly-mounted landing gear, but eventually abandoned the modification. The combat stress on the new trainer wouldn't be too high, and the old J-7 landing gear would suffice; one must take things one step at a time.

The aerodynamic design phase had taken nearly four months to complete. Now, Yang Hui had to leave the First Institute and return to the Second. He needed to check on the engine design progress, which had begun even earlier than his aerodynamic work—a full four months ago.

However, just as Yang Hui was about to leave, new matters arose. As the executive secretary of the new company, Yang Hui was duty-bound to handle them, especially since this matter clearly required negotiations under the new company’s name.

It turned out that news of the base’s success in securing external investment for the new trainer had stirred up the Hongdu Factory, which was also developing its own trainer. This project was a lifeline for Hongdu following the failure of the Q-6 project.

Hongdu had begun research on an advanced basic trainer in 1982, a project they funded themselves. Hongdu had a long-standing tradition of self-financing projects; the world-renowned Q-5 was developed with their own funds, with the state only providing development grants long after the prototype had begun flight testing.

Now, Hongdu was gambling once again. The new aircraft didn't have a definitive name yet, but in the future, it would be known to every Chinese aviation enthusiast by one name: the K-8 trainer.

Hongdu had reached out to the base, hoping for a connection; they too wanted to pursue the path of international cooperation.