An interview with Deng Xiaoping

By Henry Grunwald, Ray Cave, Deng Xiaoping

Deng Xiaoping, 81, looking fit and vigorous in a dark gray Mao suit, appeared in the east wing of Peking's Great Hall of the People to greet 60 U.S. business leaders and Time Inc. journalists traveling through Asia on a TlME-sponsored news tour. The group was led by Editor in Chief Henry Grunwald, Corporate Editor Ray Cave and Chief of Correspondents Richard Duncan. In the past seven years, Deng, who was once sent into internal exile as a "capitalist-roader," has introduced broad and dramatic economic reforms that have decentralized decision-making and placed more reliance on free-market forces. In mid-September, he consolidated political backing for his reforms with significant personnel changes in which many of China's aging leaders were retired and younger officials moved up in the power structure.

In a relaxed, wide-ranging conversation that lasted for more than an hour, China's leader offered his thoughts on economic reform in his country and how it can be sustained, the new problem of corruption, Chinese relations with the Soviet Union and next month's Reagan-Gorbachev summit meeting in Geneva. As is his custom, Deng chain-smoked throughout the meeting. Speaking in his deep, heavily Sichuan-accented voice, he was by turns tough, charming and self-effacing. Excerpts from the session:

On whether a free-market economy can co-exist with a socialist state. I think that there are no fundamental contradictions between a socialist system and a market economy. The question is what method we should use to develop the social forces of production in a more effective way. And of course, in the past the old approach was to go for a planned economy. The old method was a good method because it's good to have a plan. But according to our experience of past years, we have found that if we engage only in planning, the development of socially productive forces is delayed. So if we can combine the planning and the market economy, then I think it will help to emancipate the forces of social production and help accelerate them.

Our experience tells us that if we rely only on the past economic system forever, we will not be able to develop social production. So what we have done is adopt the useful things under the capitalist system. We have been pursuing the policy of opening up to the outside world, and we have been combining the market economy and the planned socialist economy. We have introduced a series of reforms in order to achieve this goal. Now it seems this is a correct policy. But has it violated the principles of socialism? I think not.

On preserving the socialist system. I think we should uphold two things. First, public ownership should always play the dominant role in our economy. Second, we should try to avoid polarization [of rich and poor] and always try to keep to the road of prosperity. Our policy of opening to the outside world, and the new approach introduced at home to stimulate the economy and to take more flexible measures, will not lead to polarization. As long as public ownership plays a dominant role in our country, I think the polarization can be avoided. There will be differences when the different regions and peoples become prosperous. Some people will become prosperous first, and others later. The regions that have become prosperous will help the regions that have not. That's what I mean by common prosperity.

I think only when the economy has become developed, and only when the life of the people has improved, and only when the culture and education level has been raised, can the negative phenomena be eliminated in the end. So the overriding task is to be engaged in the Four Modernizations with one mind and one heart. What we are doing is making the best use of the inherent characteristics of socialism. We also want to make use of the useful features of the capitalist system to stimulate the productive forces of society.

It's almost seven years since we decided that we would start the reforms. As we say in China, "We will open up to other worlds." If you want to tell whether the political situation in China is stable, if you want to tell whether the lives of the people are improving generally, you should find out what's happening in the countryside, where 80% of the people live. In other words, we started our reforms in the most difficult part of the country, and I think the success achieved has been achieved in the countryside.

As you know, after the founding of New China, the per capita income remained at the level of 60 yuan [$20] for quite a long time. That's below the poverty level. It means that the people didn't have enough to eat or to wear. But the reforms in the countryside took off and had results within three years. What we do in the reforms in the countryside is emancipate the productive forces and bring into play the enthusiasm of the peasants. If you want to bring the initiative of the peasants into play, you should give them the power to make money. That's why we put an end to the communes and have introduced the responsibility system in production.

On opposition to his dramatic economic program. I understand that there are different views regarding the reforms. Yes, that's true, but compared with seven years ago [when there were strong objections to the agricultural reforms], the differing views are on a much smaller scale. When we first started introducing the reforms in the countryside, there were quite a few people who were not in favor of reform. In the first two years, a third of the regions of China were still not so enthusiastic and were left behind in starting reforms. So they waited a year, and when they found that other regions were doing quite well and starting reforms, they started to catch up. And they began to have results in one or two years' time. So our approach is not to force [the opponents of reform] to do anything. Our approach is that practice shows them their approach is not right and is not proper. That's why I say the reforms in the countryside are a successful experience.

On urban reform. This is the core of our economic restructuring. This is more complicated as it involves more problems. Just as with what happened seven years ago, there are some people, although fewer in number, who are worried about reform in the cities. And I think their worries are not completely without reason. So our approach to their misgivings and worries is the same approach that we adopted seven years ago. We will let practice dissipate their worries and misgivings. We permit people to disagree. Our attitude toward those who have misgivings or worries is to understand them. Perhaps you ask why. It is because we believe that several years from now, they will become convinced.

All these worries will not impede us from introducing our reforms. It's almost a year since we started the economic restructuring of the urban areas, and I think we have a good momentum. If the reforms in the countryside worked out very well in three years, I think it will take five years for the reforms in the city. So I hope our friends will keep watching us very closely. Two years from now, three years from now, four years from now or five years from now, we will see what changes will have happened. Personally, I can say I am full of confidence because, as far as China is concerned, there is no other road China can take. This is the only road China can take. Other roads will only lead to poverty and backwardness, and I think this is the only road toward prosperity [that] China can take.

On preventing China's new economic freedoms from leading to abuses and corruption. I think we will do two things. First, we will do it through education and second, we will do it through the legal system. This, of course, is a longtime task, and I don't think it can work overnight. And I don't think a few remarks of a certain person would help eliminate these bad things. But I am confident that our party and country and people are able to eliminate all these bad things.

On how fast China should grow. We have to work out an appropriate growth rate according to the experience of the past seven years. In recent months it has been too high [an overall industrial growth rate of 23% for the first six months of 1985], and this needs to be overcome. In the next five-year plan we would like to achieve a condition under which China will be able to have a long-term, stable, enduring development not only in this century but in the next.

On the chances that the economic reforms will survive. The cadres of the central government and other regional offices at the national level will be people younger in age and more competent professionally. That will guarantee continuity of our policies. Many foreign friends are worried about the continuity of our policies, and have kept asking us this question. The answer I give them is always like this: I think there are two things from which people can judge whether we can continue the policy or not. First, and most important, is to decide whether the policy is correct or not. If it is incorrect, what is the point of having it continue? If it is correct, it will help develop the social forces of production. If it could enable people to improve their lives gradually, then I think the policy itself is a sure guarantee of its continuity. Second, the kind of people who are actually involved is very important. From the top down to the bottom, we need a large number of people who can explore these new things and [who] are energetic. We started doing all these things at the third plenum of the Eleventh Central Committee [in 1978].

Take me, for example. I am 81. People wanted me to take up the post of Chairman of the party, but I told them that I was too old for that. Then people wanted me to take the post of President, and I said no, I wouldn't do that. I said people who are more energetic [should] do these jobs. So after that we have gradually made it a policy. That is, we will promote more young people to leading posts. Since then, the central authorities have called for the introduction of the program that will ensure that more young people are put in the leading positions who are more competent professionally and who have a higher educational level.

On his place in history. I don't want people to honor me. Never. I don't deserve that. Because what I do is nothing other than what reflects the wishes of the Chinese people and the Communist Party members. And the policies formulated in recent years have been formulated collectively. In the past 30 years or so, until the Cultural Revolution started, I was one of the principal leaders in China, and I think I should be held responsible for the mistakes during those years. No one is perfect in the world. So that's why I never want to write a memoir or an autobiography. Particularly in recent years, I haven't done much [laughter].

On Soviet-Chinese relations. The Soviet Union has new leaders, and the people of the world are watching to see what will happen. It is not clear where Gorbachev is going, or how far. Soviet strength in Asia has grown; that's true. Their naval strength in the Pacific is the same as their strength in the Atlantic. One-third of [their] strategic missiles are directed against the Asian Pacific region, and that includes China, of course. They have 1 million troops with modern equipment on the Sino-Soviet border.

We hope to normalize Sino-Soviet relations. But there are three obstacles that must be removed. First, Soviet support for the Vietnamese invasion of Kampuchea. Second, Afghanistan. Third, reduction of missiles and troops on the Sino-Soviet border. These three obstacles threaten not only China but also all of Asia. We bring this up at every meeting with the Soviets, and we realize that removing all three at the same time "might be difficult." [So now we say] one at a time. So far we have had no positive response.

On the Geneva summit. We welcome the summit. It's better to meet each other than not to meet. But we do not have high expectations. It is difficult to pass judgment on the Soviet proposal to reduce their missile strength by 50%. It seems that this is a rather good proposal. However, as to whether the two sides can reach an agreement on this proposal, we will not pass any judgment now, nor will it be easy to pass a judgment. Even if there will be an agreement on a 50% reduction, I don't think it will help solve the present problem.

The nuclear warheads possessed by the Soviet Union and the U.S. can destroy the world ten times. So even if there is a 50% reduction, they still have the ability to destroy the world five times [laughs loudly]. So first, to reduce some is always good because it may play a role in relaxing tensions, and in that atmosphere it will be more relaxed. So as far as this is concerned, we welcome the development, but I think it will be too naive to believe that with a 50% reduction, the problem will be resolved and we should no longer be so concerned. So I think it's not enough if we place our hopes only on the summit meeting for world peace.

On whether he has any recommendations for Reagan and Gorbachev. No. I am not qualified. China is a backward country. Perhaps 50 years from now, China would have a larger say [laughs heartily].