China Economic Forum (Deng Lecture), Yale China Forum February 6, 2012
Total Page：16
File Type：pdf, Size：1020Kb
CHINA ECONOMIC FORUM (DENG LECTURE), YALE CHINA FORUM – FEBRUARY 6, 2012
I’m Jeffrey Garten and I have the pleasure of talking to you tonight about Deng
Xiaoping and the future of China. And I want to say at the outset that I realize I’m at an enormous disadvantage because given that most of you are from China, everybody here knows more about Deng Xiaoping than I do. I just want to give you an outline of what I plan to discuss since I’m going to cover a lot of ground and I wanted you to understand the structure of this talk [See slide]. I will start by talking about why Deng Xiaoping matters in the larger scheme of things and then what I’d like to do is talk a little bit about the events in his life. Many of these events are familiar to you, but I want to relate them to what he did to give you a sense of the flow of his life. I’d like to talk about his legacy and some of the special qualities that I think are attributable to him, how the world has changed since he died. This is important because one of the points that I’m going to make is that the basic parameters that he set are the parameters in which the leaders of China have continued to operate, and yet the world is changing very fast and therefore there are some very big challenges in continuing to operate under those same parameters. I’ll give you some personal views about what I think is going to happen and then, I’ll talk about Deng in the context of other people who have been really transformational leaders throughout history. So those are my goals for the evening and I’ll leave plenty of time for questions. Why Deng Matters
So let me start by talking about why Deng Xiaoping matters and why I am talking about him now. And I think really there are two big points. The first is that China matters. Maybe it’s not startling anymore, but as someone who helped to prepare
China for the accession to the World Trade Organization in 2000, I can tell you that it wasn’t very long ago that most people really had no idea that China would matter so much. But obviously today, along with the US, it’s one of the two most prominent countries in the world. China is right at the center of the most dynamic region of the world and it influences every aspect of the global economy. China is also a major political force, certainly in the region and certainly in international organizations. Its voice is increasingly critical on the big issues of our day. Deng Xiaoping was central to the evolution of China in this century; central to the unification of China during the communist revolution; certainly central to the tumultuous events, whether it was the great leap forward or the Cultural Revolution, and certainly central to what I would call the counter-revolution after Mao died.
Deng helps us to think about how China is run today and how it will be run tomorrow. The policy framework that he constructed is still the policy framework under which Chinese leaders operate today. And the problems that he wrestled with, the problem of how open the Chinese economy should be and how fast it should open – that is still a contemporary issue. The problem of how politically open China should be – that was his central preoccupation, and his central challenge, and it remains the same today. But as I said at the outset, the world has changed a lot and there’s a big issue as to whether or not those parameters that Deng Xiaoping set can or should be the parameters going forward.
There’s a second why Deng matters and this is something that is very important to me and that is for those of us who are interested in transformational leadership.
Deng Xiaoping is an example of someone who really facilitated monumental change.
Like a number of other people he changed the assumptions on which the entire world is now based. I am particularly interested in transformational leadership because I’m in the middle of writing a book about leaders who have created transformations and my theme is global transformations – leaders who have actually created globalization. My tentative title to this book is “From Silk to Silicon,” and it’s a history of ten people who since the time of Genghis Khan have done something that is so great, so transformative, that not only did they change their times, but they also changed ours. And the book ends with Deng Xiaoping and includes a whole range of other people who have done things that nobody could possibly have conceived of until they did it. And my preoccupation is who exactly are these people? What did they achieve? How did they achieve it? What was their motivation? And how much do they have in common? At the end of this lecture I’m going to put Deng in the context of those ten people and others like them. For Deng was definitely transformational; the market reforms and the openings that he achieved in a short period of time constitute some of the most basic changes that occurred in 4000 years of Chinese history. Under Deng, China went from notoriously closed economy, totally state-dominated, to an economy that was opening and providing increasing scope for private initiative. Under Deng, China went from very few solid political relationships around the world to normal political ties with Japan, other parts of Asia, Europe and the United States. Under Deng, domestic growth went from almost nothing to an average of 9% or 10% a year for many years to come. And his polices lifted hundreds and millions of people out of poverty and created a middle class in China. If this wasn’t profoundly transformational, it’s pretty hard to think of what was. In fact, I would say that Deng Xiaoping created a revolution. As the Chinese scholar Lucian Pye wrote, “Perhaps never in human history has an established society gone through such a total transformation without a war, without violence, and without an economic collapse.” And Stapleton Roy, who was the US ambassador during part of this time, said in 1997 when Deng Xiaoping died, “that the previous 15 years had been the best 15 years in all of modern Chinese history.” It is important before we get to
Deng’s life to underline one transformation that he did not make -- and that is the iron clad monopoly of the Chinese Communist Party. There was never a point in his life where he doubted that China should continue to be run by the Communist Party, self- appointed and having a monopoly on all power. Who Was Deng?
Let me talk a little bit now about who this person was. He was born in 1904 in a small village where there was no post office, no newspaper, no telegraph, no railroad.
He was part of a middle class family at a time when the prevailing Chinese dynasty was crumbling. Deng studied the typical Confucian curriculum; he memorized the classics; he studied a bit of math and a bit of modern Chinese literature. When he was 16 his father, who was quite ambitious for him, pushed him into a group of Chinese students who were headed for France. At the time it was very much in vogue that Chinese students would actually go to Paris; at the same time, the French, reeling from the aftermath of the First World War, were desperate for labor and so there was a whole program to bring more and more Chinese students to France. Deng was part of that.
But when he got there the money for the program had run out. And so, for the five years he was there, he became like many of these Chinese students, an itinerant laborer, looking for work, very poor, getting one job after another, not being able to hold onto any of them. This was the time of the Russian Revolution and there was tremendous worker ferment in Europe. In China the Communist Party was just starting up. And in Europe the Chinese Youth League, which was a European offshoot of the
Chinese Communist Party, had been established. Deng joined that; he was only 18 but within one year he was elected to the executive committee. What was really important about this experience for him was that he found a home. At a very early age, the Communist Party became his home. He built relationships with a lot of people who eventually would be leaders of the Chinese Revolution and the leaders under Mao, most prominent among them Chou-En-Lai.
Deng was also exposed to all kinds of Communist ideology and very importantly he saw the inequities of rampant capitalism in Europe and he saw China through a lens, through a prism, of Europe. And sometimes if you’re outside of a location and you’re looking inside, you see the whole – not just the parts. He also learned how to organize.
Before he was 20, he became one of the organizers of the Chinese Communist Youth
League, and he got to know people and he saw the factions, and he saw the disputes, and he very quickly established himself as sort of a central administrative kind of person.
At the time there were a lot of foreign students in France and they were agitating a lot and the French police had them under surveillance. The French police started to round up foreign students, particularly from China and Vietnam, and they went after
Deng Xiaoping and they missed him by a day. He had left for Russia. And had that not happened, the whole history of the world might have looked a little bit different. But he left for Russia and he spent a year there really learning Communist doctrine, teaching, lecturing, and becoming very steeped in the ideology. Then he went back to China and at a time when there was two parties – the Communist Party and the Nationalist Party – fighting it out for supremacy in China, fighting it out for control. Although it wasn’t an even fight because the Communist Party was very small; the Nationalist Party was very strong. And Deng, like others of the Communist Party, had to go underground. They were in Shanghai; they were incognito. He posed at times as a shop leader; at other times as someone who ran an antiques store. He and his colleagues pretended to be middleclass bourgeois so they wouldn’t be rounded up by the Nationalist Party. And during that time he really began to perfect his relationship-building and his administrative skills. He became the person who was the link between the communist party in Shanghai and all the cadres around China. He handled the funds, he worked on the publications, and he became really a political hub.
Deng went from there to the provinces where he started to organize peasant rebellions. It’s not clear at all how he learned to do it, but he did it. And he became basically a guerilla fighter. He had not met Mao Tse Tung, but he adapted the philosophy that you never actually fight someone head on, that if the other party is stronger, you figure out another way to fight them. But while this may seem like a logical strategy, it was not the only strategy. There was a Russian strategy which actually wanted to confront the rebels in the urban areas, and in more conventional military ways. Deng Xiaoping like Mao Tse Tung always wanted to surround the cities but not go in them; always wanted to do the fighting in the rural areas. And in this dispute between those who wanted to fight in the cities and those who didn’t, Mao Tse
Tung was too prominent for the dissenters to attack, so they attacked Deng Xiaoping as a surrogate. And he was relieved of his responsibilities and he was sent away; basically his first experience with being banished.
Mao Tse Tung was impressed that Deng “took the bullet” for him. And likewise,
Chou-en-Lai. And this was the beginning of Deng Xiaoping’s relationship with Mao. This contest between the Nationalist Party and the Communist Party got very rough and the
Communist Party was surrounded, surrounded militarily. And they had to leave where they were and that began the Long March which you all know about in 1934. A march of 6000 miles, 80,000 people, only 10% of whom survived. Deng Xiaoping was on that march and three months into it there was a big dispute as to whose doctrine was going to prevail and who was going to lead. And they stopped in a town called; I hesitate to pronounce it, Zuni. And Mao Tse Tung and Chou-en-Lai said to Deng Xiaoping, we want you to be the note taker. And they had it out there in a long conference with Deng
Xiaoping taking the notes and that’s when Mao Tse Tung emerged as the leader of the
Communist Party. But Deng Xiaoping was right there at the creation. And they finished the march, and on march Deng Xiaoping would be promoted. He had typhoid fever for part of it; he had to be taken on a stretcher for part of it; but he got promoted and was actually sent out with some of the troops, and that began his parallel military career.
After the Long March there were two wars in China which Deng Xiaoping distinguished himself at. The first was the war against the Japanese who had invaded
China. Deng Xiaoping wasn’t actually a military general. At the time the units had a military general and a political commissar – Deng was the latter – and the two would manage the troops together. Deng Xiaoping was very popular in the military; he became a war hero in fighting the Japanese. And as soon as the Japanese surrendered,
China had a civil war. And Deng Xiaoping became one of the great heroes of the
Chinese Civil War, basically winning some of the largest battles that had ever been fought – not just in China, but anywhere – with a million people on either side. So he emerges as not only a confidant of Mao Tse Tung but also a national military leader.
In 1949, the Communists defeated the Nationalists and took over China. Mao Tse
Tung decided that China is such a mess, he had to divide it into regions, and he put someone he trusts with each of the six regions. Deng Xiaoping ended up running the southwestern region which had one-third of China’s population and one-third of China’s territory. And it is here that he really learns how to run a big chunk of China, but not just any chunk – extremely poor and extremely diverse.
Four years later, Mao Tse Tung decided to consolidate the leadership in Beijing and Deng Xiaoping was called back to Beijing. He became Vice Premier Secretary
General of the Communist Party Central Committee Member of the Standing
Committee of the Politburo and by 1956 is considered one of the six most important people in the Chinese government. He’s put at the center of drafting the political constitution of managing promotions in the military and very importantly in handling the Sino-Soviet relationship, because the Soviet Union was the only relationship that China had at the time. He developed a lot of ideas during this period, during the period that he oversaw a third of China and the period that he was in Beijing. For one thing he realized that there ought to be a clear separation between the party and the government. He alone couldn’t do that, but he realized the difficulty of fuzzing the two together. He also saw how incentives worked. He saw that when he gave farmers some ability to own their own production, they became far more productive and far more motivated. And he began to understand that there was something called management, management aside from ideology, aside from politics, that actually mattered in getting an economy going.
By 1955-1956 Deng was very powerful in China and China was doing very well.
Mao Tse Tung and his administration were able to get a country that had been flat on its back for many decades growing again. And I think it was fair to say Mao Tse Tung thought they could relax a little bit, so he decided on the 100,000 Flowers Campaign in which he said to all the intellectuals in China, “I’m very anxious for your ideas.” I think he felt that this was the time to really harness the brain power in the country. Deng
Xiaoping interestingly wanted no part of this. He didn’t like or trust the intellectuals, for he thought they had no appreciation for the real world in which the Chinese government was operating. But this wasn’t his decision but he was opposed to it and when Mao Tse Tung did open the door and he saw all the criticism that came. Mao shut the door and he shut it violently. And Deng Xiaoping was really in the position of saying
I told you so.
A few years later, Mao got another brilliant idea – The Great Leap Forward. He decided to try to copy the Soviet model of massive industrialization. This turned out to be one of the great tragedies of the 20th century. Tens of millions of people were left starving; tens of millions of people died in different ways. And when it appears that this is such a disaster, Mao turned to the then president of China, Liu Xiaokey (??) and to
Deng he says, “I screwed up very badly. Fix it up.” Deng then proceeded to take control, and he does it with such enthusiasm and such force but he did it in a way that is totally contrary to Mao’s principles. And he succeeded in getting the economy back on an even keel, but not before Mao became suspicious of whether or not Deng Xiaoping is actually a closet capitalist.
A few years went by and Mao feared that the revolutionary spirit in China had ebbed, and he precipitated the Cultural Revolution. And Deng Xiaoping was asleep at the switch; he didn’t quite understand what Mao was up to. It’s kind of interesting how despite being so plugged in and so powerful, he actually missed what was happening.
He didn’t even realize this was going to be a powerful movement nor did he know that
Mao and some other people around him had great suspicion of Deng Xiaoping. And so as the entire country was upended as the younger generation was unleashed and went after leaders in every part of society, Deng Xiaoping himself was targeted. He was relieved of all of his duties; he was stripped of all his titles except membership in the
Communist Party; he was put under house arrest and forced to suffer enormous public humiliation including being beaten up by the Red Guards in front of his children. His kids were ordered to go out and live at the University. They couldn’t see their parents.
They were tormented. His older son, in a way that nobody really knows, fell out of a window, and was paralyzed for life. And then Deng and his wife and his mother-in-law were banished to Xong Xi (?) Province. There in the custody of security guards he had to do manual labor. And he was really reduced to an ordinary person although compared to a lot of his colleagues, he had it better. He was not physically abused; he just was totally disconnected from everything.
There was a sense in his mind that one day he would get back into power. As horrible as the situation was, he knew others had it a lot worse and there were a lot of people in China who so revered Deng’s administrative ability that it was almost as if he were being exiled but preserved in case Mao needed him. And sure enough that’s what happened. In early 1973 Mao called him back into government service. And in very short order Deng got all his titles back – Vice Premier, Member of the Central Party
Committee, Member of the Central Military Committee; he was even made Chief of
Staff of the Armed Forces. Now Mao was very sick, Chou-en-Lai was very sick and Deng de facto became the COO, the Chief Operating Officer of China. Mao’s wife and the so- called Gang of Four were absolutely livid. They always thought that Deng Xiaoping was a capitalist, always felt that he was disloyal to Mao, and they did everything they possibly could to disgrace him. But he was very skillful and he acquired more and more authority. Mao died in 1976 and the Gang of Four really went after Deng Xiaoping.
They were apoplectic that he could become the head of China and their pressure mounted to such extent that Deng had to go into exile again -- this was the third time that he was sidelined. The new President of China ultimately went after the Gang of
Four and they were extinguished. Deng managed to get back to Beijing and did an end- run around the existing president and became China’s leader. They didn’t call him the
Premier; they called him the Paramount Leader.
It was rather amazing, this guy, because he was all of 5’1”; he had not one ounce of charisma. He would walk into a room and he’d be surrounded by security guards and nobody could see him. A phalanx of security guards, all of whom were big and burly, surrounded Deng. He’d greet somebody with a handshake that was like a wet noodle.
He slurred his words together in such a way that nobody could understand him. When he was at a meeting, if he said something and somebody asked him a question, he would never answer the question. He had no grand visions because he felt that the grand visions that Mao had were all counterproductive to say the least. He was a pragmatist in the extreme.
And so over the next several years he proceeded to institute reforms that we’re all familiar with now – liberalizing agriculture, liberalizing industry and focusing on management, opening up China to trade with the world, helping to separate the government from the party; creating a long period of peaceful relationships with all of the key actors of other countries, skillfully bringing Hong Kong back into the China fold.
The one area that he did nothing about was the centralization of the Communist Party, the absolute monopoly that it had. This was the area where there could be no compromise in his mind, even though he knew and was very articulate, that the only way the Communist Party would survive is with the support of the people.
In 1989 came his darkest moment – the massacre at Tiananmen Square. This really brought everything together. China had been growing very fast; there was a lot of prosperity, but there was also a lot of inequality and there was a lot of inflation. And most of all, expectations were soaring – expectations not only in the economic arena, but expectations that the political system would really open up. We know the whole story about the brutal repression; we know that Deng gave the order for the Chinese military to shoot on its own citizens. But for him, what had happened with the demonstrations was mortal threat to the Chinese Communist Party. He saw what was happening in Eastern Europe and there was no doubt in his mind that anything but a hard line against the demonstrators would backfire. And we’ll never know everything that was in his head, but my guess is that he felt that whatever economic problems existed, they were basically technical – they could be fixed. On the other hand, he may have reasoned, if the democratic tendency was allowed to flower, there would be chaos and there might even be a revolution. And that there would be more lives lost in that revolution than there would be if he had to shoot people on the streets at that moment.
It’s hard to know, but it was obviously a very tragic period but one by all accounts he looked back on never doubting he had done the right thing.
Deng then went into retirement. And while in retirement he did something which in some ways was one of his great legacies. He watched the succeeding government doubt the momentum for continued economic liberalization. He watched the reforms slow. And he felt that the new government, his successors, simply didn’t understand how important it was for China to continue to open its markets up to the world. And so as a retiree he took a trip to southern China and who could have told that the press would go along with him, particularly the Hong Kong press, which was very open and very energetic, and as Deng talked about economic reform, his words were flashed around the world, and he still carried so much weight that he actually caused the Chinese government to revise what it was doing and from that point on, the reforms really accelerated. That was his last big act. In 1997 he died at the age of 92, having had had Parkinson’s disease and lung infections. According to his will, he was cremated and his ashes distributed on the ocean.
So it was a very rich life. And it was a life of tremendous transformation. I might say though that the legacy was not all positive. He left rampant and growing income disparities. He left rampant corruption. He did not make a lot of progress on the rule of law. He suppressed, rather brutally, political dissent. He created the conditions for environmental degradation of the first order. And he certainly allowed a lot of discrimination against minorities. All of these things still existing.
Deng’s Special Qualities
Now I’ll turn to his special qualities. Deng was a very competent administrator.
Nobody saw him as a strong political leader until the very end. But he rose on the basis of being able to organize and administer. He was not an ideologue, he was a pragmatist. His finest moments were when he would experiment with something, either allow the experiment to get bigger or kill it altogether – in some ways exactly what venture capitalists do in this country. He brought extensive experience to the job.
It’s hard to imagine somebody who had had the kind of experience that he had in the military realm and the political realm, even in the economic realm. Although he was certainly not an economist, he had a great capacity to oversee economic policies. He believed in incentives; he believed in setting a very broad course and bringing the most talented people to make it work. He had a point of view that China should be more open, that China should grow much faster, that China should be a strong country, an influential country. And very importantly, he wasn’t defensive. Most other Chinese leaders of his generation felt that China was the center of the world and that any problems that China had were really problems that somebody else had created. Deng
Xiaoping had more of an international perspective of anyone else in the higher levels of China, even Chou-en-lai, because by the time Deng Xiaoping had become the
Paramount Leader, not only had he had experience in France, but he had been back to
France to build relationships, he had been to the UN, he had been to the United States, he had been to Russia, he had been to Japan, he had been to Southeast Asia. He was a very cosmopolitan person, even though you wouldn’t know it to look at him or listen to him. He realized how far behind China was and his preoccupation was how to bring
China up to world standards. No ideology here, no defensiveness, just very pragmatic.
He also was someone who deeply understood relationships. All of those experiences that he had gave him a wealth of relationships throughout China that almost nobody could duplicate. So it’s no secret I think how he managed to be so successful. And maybe it’s no secret that the course that he put China on is the course that three successive generations of Chinese leaders, right up until the current ones, have followed.
The Current Context
China is operating still in the very same framework that Deng Xiaoping created.
Now this presents some real problems because the world has changed quite dramatically. It’s changed from a bipolar order where the US and the Soviet Union were basically running the world to one in which there are many powers and strong voices.
It’s a world in which the west is either in decline or certainly in the throes of ten years of weakness, weakness that comes from having accumulated a massive amount of debt and countries that now have to deleverage year after year and including accepting a significant amount of austerity, certainly slow growth, painful reforms. These “rich” countries are not able to act the same way as they did in Deng Xiaoping’s time. And so the question arises for China – who do we follow? For all the communist and socialist rhetoric, China was keying on the West. China had not really accepted any notion of leading, just following. They were very comfortable following other countries and narrowing the economic gap. But as the Chinese leaders look around the world now, it’s not quite clear who it is they would key in on since everyone else has such big problems.
Another big change is the intensity of globalization. It means that everything is connected and the feedback loops are very, very tight. In Deng Xiaoping’s time, when
China did something it didn’t affect the world. And China was isolated enough, even after he opened up that a lot of things could happen outside of China and not affect it.
That’s gone. These connections are very tight now.
Also China itself has changed. It’s had massive accomplishments, but also the problems are much more difficult. It’s easier to go from zero to 25 miles an hour than it is to go from 25 to 50. And all of the issues that China faces now has to be faced with a political system in China that is suited to another simpler era. In Mao’s time, he alone called the shots. In Deng’s time, he didn’t call the shots quite so single-handedly, but he was pretty much in charge. But ever since then, China’s leadership has really been a collective leadership. And now it is complicated by the fact that because of China’s prosperity, there are many powerful interest groups that matter. The big state enterprises, the exporters, the farmers, and so making any kind of change in direction is much more difficult for China than it was when one person is more or less in control.
Challenges Ahead
Which brings me to the challenges that China now faces. The first big challenge I think is the way that China grows. In Deng’s time and after Deng in the first three transitions after him, up until now, China’s growth has been propelled mostly by massive investment and low wage exports. There are very few experts in China or outside who believe this strategy is sustainable now. There really needs to be a change in China’s growth model. It’s a change which basically means that the growth will not be stimulated from abroad, not the demand from outside of China which sucks out the exports, but internal demand. And this is a very big change. It requires a different kind of financial system and this requires consumers who have a lot of disposable income, not just the wealthy, not just the small middle class, but the broad swath of the population. Very difficult to do. The Chinese government has said this is what they want to do but there’s no evidence that they’re in the process of doing it anywhere near the extent that is necessary. The second big challenge is the political model. China doesn’t have to be a democracy like the US, but running that complex economy which is so intertwined with the rest of the world from the center, where all the big decisions are made, this is probably not possible anymore. Nobody is that smart. There has to be more decentralization. There has to be more centers of power, more shock absorbers, because if everything is concentrated in the middle, you’ve got one single point and it can be very brittle. That’s not even getting into the whole arena that a population that is getting wealthier, and a middle class that is arising, may not see its future only in material goods. There very well may be more of a groundswell for political expression that is not now possible. Deng’s model of political control, which is the model that the current Chinese leadership is using, is in my view extremely problematic.
The third big challenge is the relations with the US. When Deng normalized relations with the United States and for years after, this was a win-win situation for both countries. Regardless of the merits, there is now a perception that this is no longer the case. There is perception that China is taking advantage of the global economy through mercantilist policies and protection at home and whether it’s true or not, what really matters is the politics of it. And there’s a very real danger, I think, that there is building pressure in this bilateral relationship that could one day explode. And the problems that exist in the US, the economic problems, certainly make this much more likely. And the transition problems that will happen in China make it possible as well. And finally Chinese diplomacy is a bit outdated. It’s no longer feasible for them to just be passive. And it’s no longer feasible to no longer veto everything. People are looking to China for a degree of much more positive and constructive leadership. And yet I don’t think this is yet in the mindset of the Chinese government. So I think that we’re actually in for some very rocky waters. I think that the next generation of Chinese leaders, the one that takes over at the end of this year, and certainly the one after them, I believe they are going to be severely tested by the way the world has changed, and the pressures – internal and external – on China to change. I think that there are a couple of threats; I’m not saying they will happen, but are certainly within the realm of possibility.
One is social unrest. The way this could happen is that some event that looks very small, begins to spread. And it spreads very fast. It spreads faster than anyone realizes because of modern communication. And it could be someone being shot in a demonstration. It could be a village that feels it is totally aggrieved by the corruption of some remote political leaders. It could be an environmental crisis. I don’t know what; nobody knows. But the one thing we all realize is, and you don’t have to look just at the
Arab Spring, you could look at developments in this country and just in the last couple of weeks how interest groups have managed to change the national mindset in 48 hours because a whole population decides to get on the internet and make its views known. A second kind of crisis could be in the financial area. The one thing I know about the financial crisis that we’ve been through is that the policies that are designed to make sure this doesn’t happen again are nowhere near up to the task. We are still living in a very fragile global economy. And thus far, in the last two big crises – the Asian financial crisis and the one of 2008 – China has been remarkable in its ability to stay out of the fray. The third time they may not be so lucky. And then a lot of the brittleness of the Chinese financial system may actually appear.
And finally I think there could be a political crisis of other countries ganging up on
China and creating a real nationalist reaction in China. You know in the US and Europe, the growing amount of anti-Chinese sentiment and that too requires some spark – nobody knows exactly what it could be – but if it happens, it could become very big. Of course I’m not predicting this and I’m certainly not saying that any of this is justified. All
I’m saying is that I think the next generation of leaders is going to face a situation where they’re going to have to change some of China’s policies; they’re not going to be able to follow the Deng Xiaoping model. The Deng Xiaoping model was great for its time and place, but the world has moved on and China has moved on.
Deng as Transformational Leader
Let me conclude by talking about Deng in the context of other people who have changed the world. In the book that I’m writing, I’ve looked at ten people. Just to give you one or two examples, I looked at Genghis Khan because Genghis Khan was the first person to really bring the east and west together. He created a great melting pot, the effect of which we still see today. He created transportation systems; he created a
Eurasian postal system; he brought doctors from Persia to China and engineers from
China to the Middle East. Obviously he was a very brutal person, but aside from the brutality, he did some amazing things to transform the world. Another person that I looked at is someone named Henry the Navigator, who was a Portuguese prince who basically built the ships and financed the sailing missions that allowed the Europeans to go to Asia on the sea instead of over land. He really created the whole age of exploration that led to colonization; and really led to globalization very early, but a very important stage. I looked at people like Jean Monnet, a European statesman who really was the father of the European Common Market, who envisioned a world in which you didn’t have sovereignty in the way that we know it now, with many borders being dismantled.
In opening up China, Deng Xiaoping in my view did something equally significant.
And what do all these people have in common? Well one is that they were enormously resilient. They all failed many times; they all had setbacks that were in human terms very hard to see how you could overcome them. In Deng’s situation, banished three times and then come back to lead such a great country as China? It’s an amazing story of resilience. They were all risk takers. They took big risks, really big risks. In Deng’s case, when he was asked to make repairs after the great leap forward, he basically changed Mao’s policies. Now you had to be in China, you had to understand the power that Mao had; you had to understand the vindictiveness that he targeted against anyone who didn’t toe the line, and Deng Xiaoping did it and then he did it again. He did it again when he was called back after the Cultural Revolution because he really believed that China needed a different set of policies.
All of these people had extremely formative experiences at an early stage in their lives. If you want to know whether someone is going to be a real transformational leader, you probably know by looking at their lives, before the age of 30. In Deng
Xiaoping’s case, he already became a major figure in the Chinese Communist Party by the time he came back from France and the one year in the Soviet Union. He wasn’t even 25 and he was already in the leadership group.
They all surrounded themselves with a lot of talent. You know you can point to one person and say they did something monumental, but you gotta look at the 5 or 6 people they chose to be around them. And Deng Xiaoping when he was the Paramount
Leader, he got the best talent that China had. He brought people back who were exiled from the Cultural Revolution; he brought them back from the 100,000 flowers campaign, he got the very best and he put them in positions of authority, and he allowed them tremendous scope. But the other thing I discovered in looking at these ten people is that as good as they were, they needed an historical opening. They needed the historical tides to be with them. They didn’t sail against the wind, they sailed with it. And in that respect, Deng Xiaoping was lucky like all of them. Because if
Mao hadn’t been so brutal, if Mao hadn’t screwed up so badly, Deng Xiaoping never would have gotten the chance. He rose because he was the anti-Mao, even as he was one of Mao’s close colleagues. He had a different mindset. And he was the person that people looked to bring China back into the world in a position that justified the great civilization that it was.
I think the world today is severely short of wise capable leaders. In fact, you look around the world it’s very hard to put your finger on anyone who you would call a great leader. In this respect in China and elsewhere, Deng’s qualities are really worth studying. He may have lived at a different time, he may have confronted a different set of challenges, but I think he had the best interests of the nation in mind. I think he had a degree of selflessness. And whatever you think about his goals, he really was an extraordinary leader.
Thank you very much. So we have a little time if anybody wants to ask a question or make a comment that’d be great.