A year of destiny
In 1978, Chinese paramount leader Deng Xiaoping visited Singapore, one of Asia’s most successful countries then as it is now. Deng met Prime Minister Lee Kuan Yew and held deeply frank discussions about how China could unleash its potential by embracing a new era of economic openness that would be to the supreme benefit of the people. Throughout his subsequent political career, Lee frequently spoke about his first meeting with Deng and how it represented a watershed in the history of Asian economic progress. As this year is the 40th anniversary of the historic reforms of 1978, China has been celebrating events associated with the Great Reforms throughout the year.
Even after Lee stepped down from the position of Singapore’s longest serving Prime Minister, he often spoke candidly about his relations with China and with Deng in particular.
Lee Kuan Yew’s success
Lew Kuan Yew (or LKY as he is affectionately known) was able to transform Singapore form a post-colonial swamp forced out of union with Malaysia into the first south east Asian nation to achieve first world economic standards that have come to eclipse that of its former colonial master. Modern Singapore is a leading world economy, a largely crime-free republic and a place that is consistently ranked as having the world’s best education system.
To achieve this, LKY combined elements of a mild command economy with that of an open free market, he combined the organisational skills of the leftist UK Labour Party with the tough law and order necessary to being social harmony to his once fractious multiracial island. LKY furthermore struck a balance between personal freedom and the tough decisions necessary to avoid the kind of inane media atmosphere that one for examples sees in ‘free for all’ India.
In each of these areas, balance was the key, centrism was the method and success was the goal that was resolutely achieved. Deng Xiaoping sought to learn from Singapore’s success and in so doing, he set China on the course to the success story that it is today and will certainly be for the remainder of the 21st century and likely beyond.
Lee Kuan Yew recognised by China
Today, as part of China’s penultimate celebrations of the 40th anniversary of Deng’s reforms, Beijing posthumously awarded Lee Kuan Yew the China Reform Friendship Medal during a substantial ceremony held at the Great Hall of the People. This honour demonstrates the profound impact that Lee Kuan Yew had on China’s historic reforms which continue to be the foundation of the strong and growing partnership between Singapore and China.
Three Worlds to One Belt–One Road
In 1974, China’s future leader Deng Xiaoping addressed the General Assembly of the United Nations in his then position as China’s Vice Premier. It was here that Deng preceded to explain Mao Zedong’s Three Worlds Theory to his global audience. Delivered during the height of the Sino-Soviet schism, the speech took aim both at the so-called revisionist policies of the post-Stalin USSR, orthodox Marxism and western imperialism.
Mao rejected the western theory and famously “demoted” China to the status of third world in spite of being a rapidly developing and politically advanced socialist society. While the term ‘third world’ had often been used as a pejorative, Mao saw the term as a positive and empowering label in an age of anti-imperialist struggle.
With that in mind, Mao formulated his own Three Worlds Theory in which the first world included both the US and USSR who from different ideological positions, China had come to see as part of a duel system of “imperial” hegemony that in retrospect can be called the age of geopolitical bipolarity – aka the Cold War. The less important second world was comprised of the strong allies of both the US and USSR including both eastern and western Europe and US style economies in places like Canada, Australia and for Mao also post-war capitalist Japan. The third world was everybody else – the developing world, the post-colonial world, the Non-aligned world and practically speaking most of Asia, Africa and Latin America.
When Deng announced Mao’s theory to the wider world in the midst of the Cold War he could not have foreseen that his most prominent successor, current Chinese President Xi Jinping would be leading an expanded developing world to an age of material and social enlightenment made possible by the One Belt–One Road initiative that looks to harmonise global trade in an age of openness where win-win relationships across the world are built upon the Chinese spirit of trust and respect rather than on the zero-sum model of exploitation and coercion.
1978: China’s opening
In 1978 Deng Xiaoping emerged as China’s paramount leader and decided to implement measures designed to ensure the maximum long term success of the Chinese nation. While Mao’s Three Worlds Theory hinted at a departure from doctrinal absolutism and signalled a shift towards a more pragmatic understanding of the challenges facing developing nations, it was Deng Xiaoping whose theories helped to create a political atmosphere where it was understood that no ideology can be called a success unless its implementation leads to meaningful results in the real world and for real people.
While Deng did not repudiate any specific ideology, it was his aim to make his party become one focused on problem solving in the name of material results rather than endless theorising which can never put food in one’s mouth or a roof over one’s head. In this sense, Deng’s Theory built on the studies of the past and helped to make the efforts of previous generations of Chinese work towards fostering growth whose fruits could be easily plucked by the hand of ordinary men and women.
The China Deng inherited was one of the world’s most impoverished nations whose retarded economic fortunes were made all the more protracted by a crisis of overpopulation. When Deng proclaimed, “It doesn’t matter whether a cat is black or white, as long as it catches mice”, he sounded a clarion call of pragmatism in a 20th century still dominated by ideological claptrap and political subterfuge. By rejecting secular mythology as much as theological mythology, Deng prepared China to confront its very real problems with a very orderly sense of problem solving. While others spoke, Deng set out to achieve results and the results he achieved were beyond the expectations of even the most optimistic idealist.
The Deng Miracle
When Deng Xiaoping became China’s paramount leader the poverty rate was 88%. By the time of his death in 1997, just four years after formally relinquishing a political role (but while remaining highly influential), the poverty rate was reduced to 40%. Today, the poverty rate stands at 2% while by the end of 2020, China looks to completely eliminate poverty throughout the nation.
Deng’s economic miracle saw China’s GDP rising dramatically throughout his time in power, a trend which continues to this day. By transforming a poor agricultural economy that could not feed its own bloated population into a country that is today the world’s most prolific industrial producer, Deng helped to modernise Chinese society without relying on the influence of alien cultural or economic trends. Deng’s miracle was extraordinary not only due to its scope but due to the fact that it was ‘Made in China’.
One of the crucial early elements of Deng’s reforms was the inauguration of special economic zones (SEZs) whose model owed much to that which Lee pioneered in Singapore. Through humble beginnings, the economic models employed in the SEZs gradually transformed the nature of production and transactions throughout China.
Market socialism with Chinese characteristics
At a time when much of the world was still arguing over the benefits of capitalism vis-a-vis socialism, Deng decided that both terms were inappropriate absolutes when discussing pragmatic economic management. Deng instead favoured a market socialist economy which allowed for enterprise, entrepreneurialism, innovation and rising consumer standards – typical features of the most efficiently run capitalist economies including Singapore. But he also favoured tight regulation on capital outflow, investment strategies, banking practices and further ensured that the profits generated by the Chinese nation would be reinvested into the Chinese nation whether at the level of re-investment into industry or putting money into housing, public transport infrastructure, education, poverty relief programmes, agricultural reforms, the building of modern cities and a more robust security apparatus.
In consecrating a market socialist system, Deng was able to combine the best features of all existing economic models and harness these virtues to traditional Chinese cultural characteristics that have allowed China to develop rapidly using its own economic model which reflects its own societal and historical values.
Beyond this, Deng’s market socialist model appears to be the best placed to take advantage of the revolution in robotics, factory automation and artificial intelligence, sectors where China is currently a world leader in 2018. While in strict market economies the profits generated by the artificial hand can lead to a collapse in the job market, in China, the profits generated by artificial intelligence and automation will be reinvested into the Chinese marketplace and society thus allowing individuals to hone their skills in sectors concerned with research and development, invention and innovation as production becomes increasingly the responsibility of machines rather than man.
In this way, China is set to not only be a leader in the automation revolution but the economic model which dates back to Deng’s reforms that can best harness the benefits of these new technologies for the benefit of the people as a whole.
From Deng and market socialism to Xi and One Belt–One Road
The third world which Mao redefined and Deng spoke of in 1974 is today a developing world that is increasingly supportive of China’s One Belt–One Road initiative which looks to place in the hands of developing nations the power to elevate themselves out of poverty the way China began doing under Deng. Crucially, the Chinese model for openness and cooperation is based on bilateralism and bespoke solutions to unique national and regional issues rather than a unilateral, hegemonic zero-sum model that puts pressure on partner nations to sacrifice their national characteristics on the altar of western liberalism.
Today, it is the western nations that remain among the most focused on dogmatic ideology in terms of both domestic and foreign policy. While China embraces good relations with all based on existing realities, many in the west still confuse reform for violent change. Deng Xiaoping Theory helps to present an alternative to the violent neo-liberalism of many western nations in that his views can be summarised as those where faith in the obscure is no substitute for reason and where the scapegoating implicit in dogmatic and self-indulgent intellectualising can never accomplish that which can be achieved through realistic problem solving and a strong forward looking work ethic.
This year, China celebrated what would have been Deng’s 124th birthday and the 40th anniversary of his historic reforms of 1978. In 2018, the world now looks to China as a leader in development, trade, technology, innovation and economic theory. The cat that is the contemporary Chinese dragon has certainly caught many mice in the 40 years since Deng Xiaoping changed his nation and the world forever. While the strength of the Chinese people was and remains the engine that has powered China’s great reforms, China’s current President Xi Jinping has acknowledged the important role that Lee Kuan Yew’s relationship with Deng Xiaoping played in transforming China and helping to promote multilateral openness throughout Asia.