“It doesn’t matter whether a cat is white or black, as long as it catches a mice it is a good cat.”

-Deng Xiaoping

I decided to write about a Chinese leader who inspired me. His name is Deng Xiaoping and he never served as President or Premier of China. He did not serve as General Secretary of Chinese Communist Party. Yet undisputably he is the man who laid foundation for the market reforms in China and made it an economic power.

In 1979 Deng Xiaoping set a vision to quadruple the Chinese economy in 20 years. At that time the per capita income of China was one-third of the Sub-Saharan African countries. Justin Yifu Lin (Former World Bank Chief Economist) who was at that time a student in Peking University calculated the target growth rate to be 7.2% per annum. The western elites ridiculed his goal and termed it a wishful thinking. Deng Xiaoping proved the elites wrong. The average growth rate of China for 32 years from 1980 was 9.9%. People now think that Deng Xiaoping was very conservative in his estimate of Chinese growth.

Former Prime Minister of Singapore Lee Kuan Yew said once that when Deng Xiaoping started the Chinese reform in 1979 he was 75 years old. Most people retire from politics at this age. Deng Xiaoping became active in politics at the age of 75 and led the reform till he was 88 years old.

Deng Xiaoping suffered a lot during the Chinese civil war and was kept under house arrest by Mao Zedong and his family members were ill-treated by the Chinese officials. Deng Xiaoping had a generous heart to forgive most of his enemies. The irony is that he was brought back to Chinese politics by Mao Zedong. One of his advice to Chinese leaders was not to retaliate when humiliated. Chinese leaders followed this advice for many years when many western countries humiliated it on the global stage.

The western wishful thinking was that like Soviet Union all communist states will disintegrate. I wish the western elites who had such wishful thinking have an open mind. When Soviet Union disintegrated in 1990 China didn’t. This should prove the wisdom of Deng Xiaoping.

One of the interesting incident told by my Chinese coworker was that when Vietnam backed by some western powers tried to meddle with China on some border disputes. Deng Xiaoping called them and asked them few questions. He asked “What will happen if it take two small stones and rub them against each other?”. The envoy replied “Both of them will be reduced to dust”. He asked “What will happen when I rub a small stone against a large stone?”. The envoy replied that “Small stone will be reduced to dust but the big stone will still be there”. The Vietnamese envoy realised the lesson Deng Xiaoping was trying to teach and they withdrew from the disputes.

Another interesting incident was when Deng Xiaoping visited USA. Then American president Gerald Ford urged Deng Xiaoping that countries in Asia should open their borders for Immigration. Gerald Ford really wanted Soviet Union to allow Jews to immigrate to that country but he could not ask that directly. After Gerald Ford told this Deng asked how many Chinese will America allow to immigrate. Gerald Ford learnt the lesson about his double standards.

Today China is a superpower having surpassed USA in GDP PPP terms in 2014. Two achievements that show the power of China on global stage are the start of AIIB (Asian Infrastructure and Investment Bank) which is going to be a competitor to World Bank and the bail out it is offering to almost all the countries in the world and Eurasian Rail Road. It is a folly by Barack Obama administration to persuade countries not to join AIIB. The funny reason given was that AIIB might not have the transparency and standards of World Bank. US might be thinking that rest of the world is foolish to believe that World Bank is a transparent institution. Let me ask a question “Why is the World Bank president always an American?” and this one attribute is good enough to bring a disgrace to the bank. To much of America’s embarrassment most of its allies like Britain, Germany and others joined AIIB as founding countries.

Second achievement was the rail road from China to various parts of Europe. At the time when US is still trying to build Rail Road between cities, China built rail road from Asia to Europe passing through more than 10 countries.

Today countries don’t go to IMF for bail outs. They go to China for bail outs. Look at the recent investments of China to countries in virtually all the continents. IMF is another predatory organization which is toothless because of the voting quota.

“There is an unwritten rule that World Bank president must be an American and IMF president must be European”

If you would like to know the strengths and weaknesses about Chinese economy read the book Demystifying Chinese Economy by Justin Yifu Lin and China in 2020 by Hu Augung. Please read the books about China by western elites carefully they are surely biased against China and they are half-baked and cannot look beyond communism and human rights in China.

Lastly I would like to quote one incident that show China’s generosity in 1997. During the Asian financial crises most of the Asia including China was affected by the crises. Countries that were affected started to devalue their currency to get competitive advantage in export. China did not devalue its currency and it helped other countries to recover from the crisis faster. This alone is the most important factor to end the crises quickly. On the other hand look at the behaviour of US during the global financial crisis. The amount of unprecedented protectionism by US government and trade disputes with other countries showed its lack of leadership.

Credits and References

  • Demystifying Chinese Economy – Justin Yifu Lin
  • China in 2020 – Hu Augung
  • Deng Xiaoping and the transformation of China – Ezra Vogel.
  • Conversations with Lee Kuan Yew – Tom Plate