Lessons from Deng Xiaoping

Ideological Innovator and Ruthless Pragmatic

I recently finished Ezra Vogel’s defining biography of Deng Xiaoping, the leader who arguably defined the market reforms that birthed the China we know today. A few of my notes and takeaways:

Raised For This Very Purpose

Deng Xiaoping was in many ways the perfect leader to bring about significant reforms to China. He spent a decade of his early career within the PLA, which was a crucial reason for the military’s trust in Deng when he took power. He also spent a remarkable amount early in his career supporting the very highest levels of CCP and was able to be in the rooms that mattered early on. During the Long March, he quickly became a confidante of Mao’s and despite being purged multiple times, always retained Mao’s trust. Particularly when it came to foreign affairs, Mao had Deng apprenticed to Zhou Enlai, where Deng was exposed to the highest levels of negotiations and meetings with foreign leaders for almost a decade before he eventually took power.

Like other successful leaders e.g. Lee Kuan Yew, LBJ, Hyman Rickover, he spent his entire life dedicated to one task. He was not a theorist, but as a soldier and a policymaker.¹ Deng built a broad network of supporters he could trust with important roles and a lifetime of experience that gave him the understanding of what changes were needed and the experience to effectively enact those changes.

Humble Leader, Ruthless Pragmatic

Deng was marked by a deeply pragmatic spirit bound with an immovable loyalty to the CCP. He never held grudges against anyone - not against those who condemned him during his multiple criticisms, not against Mao when the Red Guard attacked his family and paralyzed his son. Later on when he was a leader, he never showed favoritism to any of his prior associates, only elevating those who were competent and those he could trust. He was willing to condemn someone or forgive someone, depending on what the situation required and regardless of their previous relationship to him. Deng enforced this spirit of pragmatism and forward facing orientation, rather than retrospective revenge, particularly when subordinates or factions sought revenge on officials who had previously condemned them under Mao. He also never indulged in the idol worship that Mao encouraged - there were few statutes, portraits, or songs about Deng during his tenure or after. While students knew his sayings, they didn’t memorize them endlessly in the same way they did under Mao; Deng preferred they focused on their education.

Experience is the Teacher

Early on as a leader, he rejected the “Two Whatevers” approach, which took a hardline approach to following “whatever” Mao did, and instead promoted “Seek Truth from Facts” i.e. that political ideology and party doctrine should be based real-world results, not just blind political adherence. This ideological flexibility that Deng fought for early in his tenure allowed the party to slowly and subtly admit that some of Mao’s decrees were wrong and move forward unburdened by what had been.

实事求是
Seek Truth from Facts

This pragmatism also informed his experimental approach to policymaking, which was a necessary tool to give time for his ideas to bear fruit in the face of ideological resistance. Perhaps the most significant impact Deng had was imbuing the state with a culture of experimentation. This experimental approach to policymaking arguably provided a crucial meta unlock that gives Chinese policymaking a greater dynamism and willingness to experiment that still persists today.

Deng framed his policy ideas as experiments, which could always be rolled back, in order to sidestep conservative backlash against his pro-market reforms, particularly the Special Economic Zones (SEZ) he championed. Ultimately, Deng’s extended power base, which created time for policies to come to fruition, his ideological framings, which baked these policies into Chinese socialist thought, and the actual economic growth these policies brought, meant they were ultimately never rolled back.

Deng encapsulated his experimental approach to economic policymaking by canonizing the famous folk saying “Cross the River by Feeling Stones”, which idiomatically describe policymaking as rife with unknowns. The path forward is identified through policy experimentation and assessing outcomes.

摸着石头过河
Cross the river by feeling stones

Taiwan, Hong Kong, Senkaku Islands

Deng’s pragmatism also helped him punt off tough decisions that he recognized China at the time was not ready to face e.g. unification of Hong Kong and Taiwan and the Senkaku Island dispute, where a more nationalistic ruler might have made hasty and premature attempts at forced reunification for short term nationalistic favor. Instead, Deng recognized that he needed positive foreign relationships, particularly with the US and Japan, in order to encourage foreign investment and have the opportunity to learn from western technology. During his historic visit to Japan early in his tenure, where Deng sought to woo Japanese manufacturing investment into China, a reporter asked him about the Senkaku Islands. His careful, reassuring response, which would be his approach to Hong Kong and Taiwan as well, was to “leave it to wiser generations to figure out”.

一代一代解决
Solved generation over generation

Perhaps the ultimate sign of Deng’s selfless pragmatism in service of the party is his decision to peacefully step down and retire, creating an expectation of peaceful transition of power between leaders. And this was not just a personal decision - Deng’s retirement meant that an entire wave of senior officials, who were the same class as Deng, would also have to retire. Despite pressure from other officials not to retire, Deng stepped down in 1989, creating space for a new generation of leaders to take senior positions.

Ideological Innovator

Deng was able to accomplish his reforms not by ramming them through by sheer willpower or raw political force, but by building his reforms and ideas into the existing ideological structures of the CCP. His experimental approach to policymaking was one example of how he sidestepped conservative concerns around his reforms, but he also more directly reframed his policies to fit within canonical socialist thought.

Scientists are Mind Laborers and Japanese Management Techniques

After witnessing the failure of the Great Leap Forward and the expulsion of many highly educated university scientists during the Cultural Revolution, Deng had an almost “magical belief” in science and technology education as the key to China’s economic development. He recognized that Mao’s expulsion of academics and scientists was a severe detriment to China’s development and quickly repatriated them back to universities. He insisted on liberating them from political theory to focus on science and cleverly rebranded scientists as “mind laborers” and Science itself as part of proletariat socialism. In government hiring, Deng also elevated scientists and engineers with practical experience over political theorists, a practice that still permeates the CCP leadership today.

脑力劳动者是劳动人民的一部分
“Mind-laborers” are part of the working people

Similarly, when Deng visited Japan in 1978, he was eager to rebuild economic relationships and learn from Japanese industrialism. Deng insisted on bringing Japanese manufacturing management techniques but knew it would be hard for fellow Chinese people, with constantly refreshed images of the Japanese atrocities during WWII, to accept bourgeois seeming styles of management and development. Deng managed to thread the needle by clothing these imported techniques with the more neutral term of “management”, alongside his continued commitment to socialism and the Communist party. Deng ordered the formation of new training associations, like the Quality Control Association and the Enterprise Management Association, modelled after similar trade associations they had seen in Japan. Training programs for provincial economic officials were created to learn from Japanese practices and Chinese factories even set up banners emphasizing the importance of studying Japanese management systems and established training programs.

Common Prosperity as “Some People Get Rich First”

When Deng opened the Special Economic Zones (SEZ) in Guangdong and Fujian, there was significant backlash from conservatives that this introduced too much foreign influence and capitalist ideologies. By framing them as experiments, Deng gave the SEZ's breathing room to demonstrate the economic success, which Deng knew would allow policies like this to take firm root.

一部分先富裕
Some people get rich first

Another ideological concern from the conservatives as characterized by Deng, is that it is “better to be poor under socialism than to be rich under capitalism”. Many criticized the SEZs, particularly the spectacularly successful Guangdong/Shenzhen SEZ, as creating an inequality uncommensurate with socialism. Deng activated the levers of the party propaganda apparatus to push the idea that unequal economic development is a rising tide that eventually lifts all boats. He redirected attention on the apparent disparity by using the success of the first SEZs to expand them to other regions and create a path for other regions to participate in the success of these SEZs. The massive subsequent foreign investment into these SEZs and the “14 coastal cities” follow on program were a major driver of economic growth for China during the 1990’s and set a strong foundation for China’s industrial growth in the next century.

Some of the lessons Guangdong officials learned early on in the SEZ program are perhaps relevant to modern day American counterparts:

1. “local officials learned that to attract foreign factories, they had to set up ‘one-stop’ decision centers. Early foreign investors had been frustrated by having to deal with different government bureaucracies….by the mid 1980’s the areas that were attracting the most foreign companies were those that had been able to reorganize and centralize decision-making so that officials could make all key decisions from one office”

2. “Officials in localities that competed for investment funds learned early on that if they did not allow the outside investors to earn what they considered to be reasonable returns on investment, the investors would go elsewhere.”

3. “If local officials wanted an outside partner who would expand his investment, they had to be reliable…local officials found that the Chinese localities that did well over the years were those that honored the agreements. Not surprisingly, foreigners were willing to continue to invest when they found groups of local officials who were reliable and could resolve, creatively if necessary, all the unexpected problems that arose…”

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While many view his power as ultimate, the reality is Deng used a series of bureaucratic methods and innovations to deftly navigate a complex political ecosystem to accomplish his reforms. It is not just that he had the right ideas, but he was rightly positioned to execute them after having spent a life inside the party and he knew how to successfully frame these reforms to create broad coalitions around them. As a result, Deng firmly implanted many of the cultural genes around policy dynamism and economic development as a north star which persist in the CCP today.

1. Hyman Rickover: “It is important to be both a thinker and a doer and to have sense of responsibility. A theoretician who has no responsibility is withdrawn from the real world. His recommendations are made in a vacuum. Because he is not required to carry them out, they may be irresponsible and do harm.”