Deng's Art of Governing

Deng would not tolerate the cult of personality that Mao happily
indulged in. In sharp contrast to the Mao era, virtually no statues of Deng
were placed in public buildings and virtually no pictures of him hung in
homes. Few songs and plays were composed to celebrate his triumphs.Deng
never even became chairman of the party or premier. Students did learn
about his policies and they could cite his best-known aphorisms, but they did
not spend time memorizing quotations from his writings. And yet, even
without a cult or august titlesmerely the positions of vice chairman of the
party, vice premier, and chairman of the Central Military Commission (CMC)
Deng acquired effective control over the important levers of power.
How did he accomplish this amazing feat? By fully using his reputation
and moving boldly to create a well-run system capable of building a strong,
prosperous country.
If Mao were like an emperor above the clouds, reading history and
novels and issuing edicts, Deng was more like a commanding general,
checking carefully to see that his battle plans were properly staffed and
implemented.

The Structure of Power

Deng worked in his home office on Kuang Street, which by car was less
than ten minutes northeast of Zhongnanhai. His hearing problem resulted
from an untreatable, degenerative nerve disease, occasional tinnitus, which

led to nerve deafness and a ringing in the ears. As his hearing deteriorated in
the late 1980s, a speaker had to speak loudly in his left ear. Deng also found
it a better use of time to read documents than to attend meetings.
He preferred to read reports of the meetings and hear about them from
his office director, Wang Ruilin, who attended the meetings on his behalf and
knew the views of other high officials by meeting with their office directors.
For understanding the latest developments, Deng relied most on the
summaries of major activities produced by the party Secretariat and the
party General Office. Deng took no notes when he read. Documents were to
be delivered to his office before 10 a.m., and he returned them the same day.
He left no papers around his office, which was always clean and neat.
After he had read the materials and made brief comments on some of
them, he would pass the whole pile back to Wang and Zhuo Lin, who would
pass on those with his circles of approval or his comments to the appropriate
officials and place the rest in the files. Deng's circle of approval and his
comments on such documents constituted his way of guiding the overall
work of the party.
On some documents, he simply gave final approval; other documents
he sent back for more work, clarification, or with suggestions for new
directions to explore.
Early in his career, Deng acquired a reputation for being able to
distinguish between major and minor issues and to focus his efforts where
they would make the biggest difference for China:

devising long-term strategies, evaluating policies likely to determine

the success of his long-term goals, winning the support of fellow
officials and the public, and publicizing models that illustrated the

policies he wished to pursue.

In some important but complex areas like economics or science and
technology, Deng relied on others to think through the strategies and

present him with the options for the final decision.

On other issues, like national security, relations with key foreign
countries, and the selection of high-level officials, Deng spent more
time finding out what he needed to know to devise the strategies
himself.

Sometimes, to ensure that on important matters others received his views

precisely, Deng would write down his key points and then tell Wang to pass
those written comments along.
General Secretary Hu Yaobang, the executive for party matters, and Premier
Zhao Ziyang, the
executive for government affairs, forwarded all important matters, mostly by
paper and rarely in person, to Deng for a final decision.
In his dictated memoirs, Zhao Ziyang reports that he and Hu Yaobang
were more like staff assistants than decisionmakers, but they were
responsible for implementation. Deng did reserve the right to make final
decisions, but he was ordinarily not a micromanager; rather he set the
agenda and let Hu and Zhao carry out his directives as they thought best. In

making

the

final

decisions,

Deng

did

consider

the

overall

political

atmosphere and the views of other key leaders.

Despite differences of view, under Deng the Politburo was a relatively
disciplined organization that responded to his direction.
Deng rarely called Standing Committee meetings: when Zhao once
asked him why, Deng replied, What would two deaf people [Deng and Chen
Yun] talk about? Deng aimed to have a clear assignment of responsibilities.
Deng well understood that to gain control over the levers of power, it would
be easier to start with a fresh organizational structure than to send one or
two leading officials to an old organization that did not match his policies.
After the Secretariat was reestablished it became an entirely new
organization over which Deng achieved clear control. Deng located this new
nerve center for the top party leadership just inside the north gate of
Zhongnanhai and put his own appointee, Hu Yaobang, in charge, to lead the
daily work of the party.
Hu Yaobang chaired the Secretariat meetings. Although Hu also chaired
the Politburo and Standing Committee meetings, after Deng formed his own
administration, the Standing Committee rarely met and the Politburo met
less than once a month. Although Zhao Ziyang, as premier, sat in on the
Secretariat meetings, Deng, Chen Yun, Li Xiannian, and Marshal Ye did not
personally attend them; instead their office directors went in their place.
Each office director had a deep understanding of the views of the person he
represented, and as a group these office directors could have frank

exchanges, insulated from awkward problems or tensions that might have

arisen among the leaders themselves due to concerns about rank, power, or
the need to save face.
Deng's perspectives helped shape the consensus, but ordinarily he did
not express a final decision until an issue had been vetted through the
Secretariat.
Several high officials, mostly just below the Politburo level, were
assigned to be a party secretary (shuji) in the Secretariat, and they all had
managerial authority. Politburo members and these party secretaries were
placed in charge of a leading small group that was responsible for
coordinating work in certain areas. Other top leaders sometimes disagreed
with Deng's decisions and occasionally were upset by his failure to consult
with them. Deng did not feel inhibited by anyone else's opinions. On military
and foreign policy issues, Deng, confident of his own views based on his
decades of experience, rarely yielded to othersthough he relied on experts
for the details and the drafting of documents. Even when other leaders
disagreed with decisions Deng made, they accepted party discipline and did
not express contrary views in public.
Deng had an especially close relationship with Yang Shangkun, who
was also from Sichuan and had been in charge of the party General Office
when Deng was general secretary. Yang served as Deng's trusted gobetween in dealing with the military. Deng also maintained less formal
relations with his personal speechwriters and document drafters.

Like other top officials, Deng generally spent a few weeks during the
coldest months of January and February visiting warmer climates. But for
Deng, these vacations were, of course, also opportunities to deal with
party business.
In his advanced age, Deng found several ways to conserve his
strength. He conducted most business through written documents, avoiding
taxing meetings. Most of his phone calls were handled by Wang Ruilin. Deng
required no oral briefings before meetings with foreign dignitaries, although
his staff would see that he knew about some of the latest activities of the
visitors.
Especially in his later years, Deng managed to conserve his strength so
that when he met outsiders, they found him alert, lively, even intense. When
Deng gave speeches that did not require formal presentations, he could
make organized presentations without notes. Typically, his only note was the
topic of the speech and the group he was addressing.
By never returning to his home village after he left at age sixteen,
Deng made it clear that his personal commitment was to China as a nation,
not to any locality, faction, or friend. Unlike Mao, Deng was not devious or,
with only rare exceptions, vindictive. Underlings saw him as a stern,
impatient, demanding but reasonable taskmaster, and they maintained a
respectful distance. He was a comrade for the overall cause, not a friend
whose loyalty went beyond organizational needs. Mao had changes of mood,
but Deng, maintained a steady demeanor and

consistent approach to governance.

Deng's Guidelines for Governing and Reinventing China
As a military leader during twelve years of warfare, Deng valued
authority and discipline. Later, as a high civilian official participating in
governing the country, Deng valued national authority because he knew how
difficult it had been for Chinese leaders in the century after the Opium War to
maintain the authority necessary to rule the country. As a leader in the
1950s Deng had experienced the godlike power of Mao Zedong, and he had
seen what such authority could achieve. But Deng also saw how difficult it
was to accomplish anything when authority dissipated as it had during the
Cultural Revolution.
As preeminent leader, he knew that rules alone would not make people
follow him. China was not yet a country in which citizens had internalized a
general respect for the law, in part because they had long seen leaders
change laws at will. Deng, like his fellow Communist leaders, believed that
citizens needed to be educated in schools and in lifelong propaganda to
understand why they were expected to behave in certain ways.
But the education needed to be supplemented by a certain awe
toward the highest leaders and a vague fear of what might happen to them
and their families
should they dare to flout that authority. Deng knew he could never inspire
the awe that Mao once did, but he was sensitive to what could be done to
preserve his own authority.

Deng embraced the notion of inner-party democracy, by which he

meant that leaders would listen to constructive opinions to reduce the
danger of making serious errors. But once a decision was made, party
members, following democratic centralism, had to implement it.
Deng believed that economic growth would strengthen the authority of the
party and his personal stature, and this assessment proved correct. When
economic growth proceeded rapidly and smoothly, as in 19831984, Deng's
authority was almost unassailable. But when economic problems became
serious, such as in the late 1980s when China suffered rampant inflation, the
public became frightened and Deng's stature suffered.
Deng never set out any guidelines for how to govern, it is possible to
summarize some
principles that underlay his pattern of rule:
SPEAK AND ACT WITH AUTHORITY .
DEFEND THE PARTY .
MAINTAIN A UNIFIED COMMAND STRUCTURE .
KEEP A FIRM GRIP ON THE MILITARY
BUILD PUBLIC SUPPORT BEFORE PROMOTING PATH-BREAKING POLICIES.
AVOID TAKING THE BLAME .
SET SHORT-TERM POLICIES IN LIGHT OF LONG-TERM GOALS.
PURSUE POLICIES THAT HELP ACHIEVE LONG-TERM GOALS .
UNCOVER EVEN THE UNPLEASANT TRUTHS.
BE BOLD.

PUSH, CONSOLIDATE, AND PUSH AGAIN .

STRENGTHEN UNITY, MINIMIZE DIVISIONS .
AVOID PUBLICIZING PAST GRIEVANCES
SIDESTEP CONSERVATIVE RESISTANCE THROUGH EXPERIMENTATION
USE APHORISMS TO EXPLAIN COMPLEX CONTROVERSIAL ISSUES.
MAKE BALANCED PRESENTATIONS THAT EXPLAIN UNDERLYING PRINCIPLES
AVOID FACTIONALISM AND SELECT COMPETENT OFFICIALS .

Experiments in Guangdong and Fujian 19791984

On November 11, 1977, Deng Xiaoping was briefed on the problem of
young men trying to escape across the border from China into Hong Kong.
Tens of thousands of youth were risking their lives each year by attempting
to run or swim across the border. Until that point, Beijing had regarded the
problem as asecurity issue. A barbed-wire fence was maintained all along the
twenty-mile land border, and thousands of police and troops were assigned
to patrol the area. When Chinese youth were caught trying to escape, they
were housed in large detention centers.
After hearing the briefing, Deng characteristically forthright in
acknowledging unpleasant realitiessaid the problem could not be resolved
by the police or the army. The problem, he said, had arisen from the disparity
of living standards on the two sides of the border; to solve it, China needed
to change its policies and improve the lives of those living on the Chinese
side.

During Deng's meetings in Guangdong, local officials also complained

about the shortage of foreign currency, which was needed to pay for foreign
technology and to underwrite construction projects. Deng supported the view
that to earn foreign currency they should establish two agriculture collection
centers (one in Bao'an county, later part of Shenzhen, near the border with
Hong Kong, and one in Zhuhai, next to the border with Macao) to collect
fresh fruits and vegetables to be exported across the border. Aware that the
local areas had only limited agricultural surpluses, he said that the other
provinces could help supply the produce for export. He also said that
Guangdong should build modern hotels and other tourist facilities to earn
additional foreign currency.
After Deng's visit, Beijing's interest in Guangdong's development
picked up. As the government began to consider purchasing foreign
technologies, officials focused on the shortage of foreign currency. Informed
planners already knew that the failure to find new oilfields had ended their
hopes of exporting high-priced oil after the 1973 oil shock. From April 10 to
May 6, 1978, with the full support of Chairman Hua Guofeng, a delegation
from the State Planning Commission in Beijing visited Guangdong to explore
how to increase exports.
Upon his return to Guangdong from participating in the Third Plenum in
December 1978, in which Deng became the preeminent leader, Xi Zhongxun
briefed local officials on the implications of the new policies of reform and
opening for Guangdong. For three decades local officials had been frustrated

that Beijingconcerned about Guangdong localism, bourgeois attitudes, and

security risks in a location that was so close to the open seas and the border
with Hong Konghad held back Guangdong's industrial development. Now,
at last, Beijing, eager to promote exports, was willing to give Guangdong
officials the opportunity for which they had been waiting: the chance to
develop their own industry.
On January 6, 1979, scarcely two weeks after the Third Plenum, Xi was
given the green light by Beijing to prepare a proposal seeking Beijing's
formal permission for Guangdong to accept foreign investment. Unlike
Deng's suggestion of November 1977, which called for agricultural produce
to be exported, this proposal was for the establishment of manufacturing
facilities that would make industrial products for export.
Xi Zhongxun immediately convened a two-week-long meeting to
prepare for the drafting of the proposal. Fujian province, across from Taiwan,
was to be given the same status as Guangdong, but since Taiwan at that
time did not allow trade with the mainland, Guangdong would take the lead,
with the understanding that Fujian would later develop its export industries
in similar ways.
On January 31, 1979, scarcely a month after the Third Plenum, Li Xiannian
approved the first case of foreign investment, a proposal by the Hong Kong
Merchant Steamship Group. To meet the strong demand in Hong Kong for
scrap metal for its booming construction projects,Yuan Geng proposed
destroying old Chinese ships that were no longer serviceable and selling

thescrap to Hong Kong builders. For years, he had been seeking a site for
such a project. Hong Kongwas too crowded, so he proposed a site in Shekou,
at the west end of Shenzhen in Bao'an county.
Yuan Geng's proposal was the perfect trial balloon for Guangdong's
new initiative. Since the destruction of old ships did not require the erection
of new factories, work could begin almost immediately.
Shekou thus became the first place in China to allow foreign direct
investment and the first area where decisions about a company inside China
could be made by people located outside the country. For Chinese leaders, it
was a very special safe case of foreign ownership, but it was a
breakthrough nonetheless, for it opened the door for other foreign
companies to seek permission to establish enterprises on the mainland.
Xi and his colleagues, proposed that the entire province be allowed to
implement a special policy that would give Guangdong the flexibility to adopt
measures to attract foreign capital, technology, and management practices
necessary to produce goods for export. China would supply the land,
transport facilities, electricity, and labor needed by the factories, as well as
the hotels, restaurants, housing, and other facilities needed by foreigners.
Beyond the general effort to assist the provinces of Guangdong and Fujian,
additional efforts, supported by the central government in Beijing, would be
concentrated in three SEZs in Guangdong (Shenzhen across the border from
Hong Kong, Zhuhai across the border from Macao, and Shantou [Swatow] on
the northeast coast of the province) and one in Fujian (Xiamen [Amoy]).

Deng was completely supportive. Deng agreed that both Guangdong and
Fujian should be given the flexibility to attract investments from the ethnic
Chinese now outside mainland China whose ancestors hailed from these
areas. On July 15, Guangdong's proposal was accepted and became Central
Committee Document No. 50, granting Guangdong and Fujian a special
policy, with flexible measures to attract foreign investment. The zones were
called special districts, as Deng had suggested. The four special zones
were officially established on August 26, 1979.

Deng's Experiment and Its Enemies

For two decades, China had been collecting materials about the export
processing zones that had already been established in some eighty
countries. They had been designed to get around complex import and export
rules by establishing zones where materials needed for production would
come in, where local low-cost labor would produce goods that would then be
exported without going through any of the usual formal import-export
procedures. In China, until 1978, all efforts to establish export processing
zones failed to receive the necessary political support. Beginning in 1979,
the areas in Guangdong near the border with Hong Kong in effect became
processing zones.
But Deng had a broader vision for the special zones in Guangdong and
Fujian than merely export processing. He sought to build comprehensive
metropolitan

centers

complete

with

industry,

commerce,

agriculture,

livestock, residential housing, and tourist industries.14 The zones would be

given the flexibility to experiment with different ways of doing things.

Modern management systems would not only improve Chinese enterprises,
but also could be adopted by government and party units so they would
become more efficient.
Deng could not have gotten the support to introduce such changes for
the entire country, but it was far harder for conservatives to oppose
experiments, for the idea of trying experiments in one locality and extending
what worked had become part of the party's conventional wisdom.
Industrial management reforms were being tried, for example, in
Sichuan, Jiangsu, and Zhejiang. But in Guangdong and Fujian, Deng allowed
foreign companies to use their own labor and management systems,
experiments that went far beyond those attempted elsewhere. In Shekou,
experiments in voting were tried long before village elections were held
elsewhere. No place was more of a laboratory than Guangdong. In the SEZs
Deng encouraged experiments with markets, industry, construction, labor,
finance, and foreign currency.
Because Guangdong was at the cutting edge, it became the target for
opponents who worried that China would become capitalist, that foreign
imperialists were returning, and that the socialist planning system would be
destroyed. It also became the target of provinces in inner China that opposed
the flow of resources to the coast.
Westerners and even some Chinese critics claimed that Deng was
experimenting with capitalism without using the name, but that is not how

Deng saw it. He was determined to expand markets and he personally had
no ideological objections to private enterprise; he accepted competition as a
driving force in commerce. But he aimed as well to keep the Chinese
Communist Party firmly in control, to constrain the markets to ensure that
they served public purposes, to prevent capitalists from dominating Chinese
politics, to retain public ownership of land, to keep a large role for stateowned enterprises, and to maintain state economic planning.
The decision to open up Guangdong, Fujian, and other coastal
provinces soon led to a fundamental shift in the location of industry from
inner China to the coast. From 1966 to 1975, under Mao's policy of avoiding
national security risks near China's borders, over one-half of China's
investment funds had been spent in the third front, bringing goods and
people to remote areas with poor infrastructure. After the attack on Vietnam
in FebruaryMarch 1979, however, Deng believed that the risk of foreign
attack was minimal. Chinese planners were well aware that for both
industrial development and international trade, the coastal areas had all the
advantages of convenient transportation, a more developed infrastructure, a
critical mass of specialists, and lower costs. In 1979, 12 percent of China's
exports originated in Guangdong, but from the late 1980s as exports grew,
roughly one-third or more of all Chinese exports each year came from
Guangdong alone.

Deng acknowledged that people in Guangdong and Fujian might well

get rich first, before other Chinese, but he proclaimed that areas that got rich
first would then help other areas get rich.
In 1979, Guangdong officials persuaded Beijing leaders to agree that
provincial agreements

with foreign

companies

did not

require prior

permission from Beijing, even if Guangdong would have to report all such
agreements to the center. Any increase in the quantity of state goods
shipped to Guangdong, however, did require approval by the relevant
ministries in Beijing.
Because the markets were constantly changing, calculation of the
different types of taxes eventually became so complicated that Beijing
agreed that Guangdong would make an annual lump sum payment of taxes.
To ensure that the SEZs not try political experiments, Chen Yun insisted that
the term special zones be changed to special economic zones. In March
1980, under pressure, Deng approved the name change.