Transcription
Never bet against a 4-ft 11-in chain smoker who has already been purged three times. In 1978, this man took charge of a starving China and made a gamble so dangerous that the last leader who tried anything like it died alone in a detention cell. His name was Deng Xiaoping.
First, let's see what China looked like when the cards were dealt. It's September 1976. Mao Zedong, who ruled China for 27 years, is dead. The country he leaves behind is broke. The average Chinese person earns around $150 a year. In 1978, by World Bank numbers, the average Indian was richer than the average Chinese person. According to World Bank data, in 1981, roughly 88% of China's population lived in extreme poverty, less than about $2 a day in today's terms. That is about nine out of every 10 people. Food is rationed. Cloth is rationed. Cooking oil is rationed. You need government coupons to buy almost anything, and even with the coupons, the shelves are often empty. In the countryside, where 80% of the people live, a family's biggest dream is to one day own a bicycle, a wristwatch, and a sewing machine.
Between 1959 and 1961, Mao's Great Leap Forward caused the deadliest famine in recorded human history. It is estimated that somewhere between 15 and 45 million people starved to death, with most serious studies landing around 30 million. Then, from 1966 to 1976, the Cultural Revolution tore the country apart from the inside. Estimates put the death toll from that decade at over a million, though historians still argue over the true number, with tens of millions more persecuted, exiled, or ruined. So, that's the table in 1976. Nearly a billion people, a wrecked economy, a traumatized society, and a Communist Party that has spent decades punishing anyone who even whispered the word market.
Now, let me introduce you to the man about to sit down at that table. Deng Xiaoping was born on August 22nd, 1904, in a small village near Guang'an, in Sichuan province. At just 16 years old, he got on a ship and sailed 39 days to France as part of a work-study program that promised Chinese students an education in Europe. The study part turned out to be mostly a lie. There was no money for school, so Deng worked. He hauled steel at a plant in Le Creusot. He fitted machine parts at a Renault car factory outside Paris. He made rubber shoes at a Hutchinson factory. The pay was terrible. The teenage Deng learned two things in France that stayed with him for life. First, he learned what a modern industrial economy actually looked like. He saw it with his own hands on the factory floor every single day. Second, he discovered croissants, and honestly, he never got over them. 50 years later, in 1974, when he flew through Paris on his way back from a United Nations speech in New York, one of the first things he did was buy a huge box of croissants to bring home for his old comrades. France gave him something else, too. It gave him Zhou Enlai, a slightly older Chinese student who would become his lifelong ally. And it gave him communism. Deng joined the Chinese Communist movement in Europe as a teenager, spending his nights cranking a hand-operated printing machine to turn out revolutionary leaflets. His comrades nicknamed him the doctor of mimeography. After a stop in Moscow for political training, he returned to China in 1927 and walked straight into two decades of war.
Before Deng Xiaoping ever gambled with China's future, he had already lost everything three separate times. There is even a Chinese phrase for his life. Three falls, three rises. Fall number one came in 1933. Deng, then a young official in the communist base area, backed the military ideas of Mao Zedong. The party leadership at the time hated Mao's approach, so they punished his supporters. Deng was stripped of his posts, publicly humiliated. His second wife left him and married one of the men who had denounced him. Then came the Long March. In October 1934, around 86,000 communist soldiers broke out of a government encirclement and began a retreat of some 6,000 miles on foot over mountains and rivers, hunted the entire way. A year later, fewer than one in 10 were still standing. Deng was one of them. He was in the room taking notes at the famous Zunyi meeting in January 1935, where Mao took control of the party. His loyalty in 1933 had suddenly become the best career move of his life.
Through the war against Japan and the civil war against Chiang Kai-shek's nationalists, Deng served as a political commissar, basically the party's brain attached to an army. He was good. In the Huaihai campaign of 1948 and 1949, one of the largest battles of the 20th century, Deng helped direct communist forces that destroyed over half a million nationalist troops. When the People's Republic was founded in 1949, Deng was a made man. By the mid-1950s, he was general secretary of the party, running its daily machinery in Beijing. Let me be honest with you here. Deng's hands were not all that clean. In 1957, he helped run the Anti-Rightist Campaign, a purge that branded over half a million intellectuals as enemies and destroyed countless lives and careers. He was a loyal party enforcer for decades. Remember that. It matters later.
Then Mao's Great Leap Forward collapsed into famine, and something shifted in Deng. While bodies piled up in the countryside, he and President Liu Shaoqi quietly rolled back the madness, letting farmers grow food in small family plots again. It worked. In 1962, Deng defended the approach with a line borrowed from his home province of Sichuan. It doesn't matter whether a cat is black or white as long as it catches mice. Mao hated that line, and years later it would be dragged out as evidence against Deng. To Mao, the color of the cat was the entire point.
Fall number two came in 1966, when Mao launched the Cultural Revolution, partly to destroy men exactly like Deng. Liu Shaoqi, the president of China, was labeled the number one capitalist roader. Publicly tormented, denied medical care, and left to die alone in a detention cell in 1969. That's the man I mentioned at the start of this video. Deng was capitalist roader number two. He was dragged through humiliation. In 1968, his eldest son, Deng Pufang, a physics student at Peking University, went out of an upper floor window during Red Guard persecution. Whether he was pushed or jumped to escape his tormentors has never been fully settled. He broke his back, was refused proper treatment for being the son of an enemy, and never walked again. In 1969, Deng himself, once the sixth most powerful man in China, was shipped off to Jiangxi province to work in a tractor repair factory. Now 65-year-old, Deng was put to work at a fitter's bench, filing metal parts, and he was actually good at it because it was the exact same job he had done at the Renault factory in France half a century earlier. He worked mornings at the factory, grew vegetables in the afternoon, chopped firewood, broke coal for the stove, and every evening he helped bathe his paralyzed son. He walked the same loop around the compound every day, thousands of laps over 4 years, thinking. People who knew him said that path is where the plan to rebuild China was born.
In 1973, a dying Zhou Enlai pulled his old friend back to Beijing to help run the country. Deng fixed the railways, restarted the factories, and got things moving. Then, fall number three. When Zhou died in January 1976, huge crowds gathered in Tiananmen Square to mourn him. The gathering turned into an open protest against the radicals around Mao. The radicals blamed Deng for all of it. He was stripped of every post, again. He was 71 years old by then, purged for the third time, and by every reasonable measure, finished. Eight months later, Mao was dead. Mao's chosen successor, Hua Guofeng, arrested the radical Gang of Four within a month of Mao's death, and people across China openly celebrated. But Hua's actual governing plan was a policy called the two whatevers. Whatever Mao decided, we uphold. Whatever Mao instructed, we follow. In other words, more of the same forever.
Deng, restored to office in July 1977 because the party simply couldn't function without him, went to war against that idea with a slogan of his own, seek truth from facts. In May 1978, an essay backed by his allies argued that practice, meaning real-world results, is the only test of truth. Not quotations, not ideology, results. It sounds boring, but in China in 1978, that sentence was dynamite. It meant that if a policy left people hungry, the policy was wrong, even if Mao himself had blessed it.
In October 1978, Deng visited Japan and rode the bullet train. When reporters asked him what he thought, he said it felt like being pushed to run. He toured a Nissan factory and learned that one Japanese auto worker produced dozens of times more than a Chinese worker. He didn't get angry. He took notes. A month later, he visited Singapore, a city run by ethnic Chinese that was rocketing into wealth, and asked its leader, Lee Kuan Yew, essentially, "How do you do this?"
Then came the moment everything turned. In December 1978, at a party meeting known as the Third Plenum, Deng and his allies pushed through a decision that officially ended the era of class struggle and made economic development the party's central mission. On paper, it was a dry bureaucratic document. In reality, it was the gamble of the century. For 30 years, the Communist Party had jailed, exiled, and executed people for taking the capitalist road. Deng was now proposing to march the entire country down that road, while insisting it was still socialism. If it worked, China would be saved. If it failed, or if it spun out of control, it would be his head and possibly the party's survival on the block.
One thing to note that makes Deng different from almost every reformer in history is that he had no master plan. He said so openly. The nickname of the approach is known as crossing the river by feeling for the stones. Try something small. If it works, do more of it. If it fails, stop. That's it. That was the strategy that would remake the world economy.
The first stone in the river wasn't found by Deng. Xiaogang Village sits in Fengyang County, Anhui province, one of the places hit hardest by the great famine. This was a village of beggars. In bad years, families would leave home and beg across the region to survive. Under the commune system, everyone farmed together and ate from the same pot, which in practice meant nobody worked hard because working hard earned you nothing extra. One winter night in late 1978, 18 men crowded into a mud brick house lit by an oil lamp and did something that could have gotten them shot. They wrote out a secret contract. They agreed to secretly divide the village land among their families. Each family would hand the state its grain quota and everything grown beyond that quota was theirs to keep. The contract said that if any of the village leaders were jailed or executed for this, the other families would raise their children until the age of 18. Then each man pressed his fingerprint onto the paper in red ink. You can probably guess what happened. With every family keeping what it grew, Xiaogang's next harvest exploded. The village produced more grain in 1 year than it had in the previous 5 years combined. Word got out because a miracle harvest is hard to hide. Local officials came asking questions. This is the moment where, under Mao, everyone involved gets labeled a counter-revolutionary. Instead, the provincial leadership protected them. When the story reached the top, Deng didn't crush the experiment. He pointed at it and said, in effect, "Look at this. It works. Do this." By 1983, this household responsibility system had spread across virtually all of rural China. The numbers are almost silly. National grain output jumped from about 305 million tons in 1978 to 407 million tons in 1984. Rural incomes roughly tripled in the same window. Hundreds of millions of people went from hungry to fed in about 6 years. That was stone number one.
Stone number two was even crazier. If family farming was Deng testing the water, the special economic zones were him diving in headfirst. In 1980, the government officially designated four zones: Shenzhen, Zhuhai, Shantou, and Xiamen, where the normal rules of the socialist economy simply would not apply. Foreign companies could invest, businesses could hire and fire, workers could earn bonuses, prices could float. Inside these fences, China would run a controlled experiment on capitalism. The placement of Shenzhen was pure Deng. It sat directly on the border with Hong Kong. For years, that border had been one of the saddest places in China. Tens of thousands of desperate people had risked drowning and gunfire trying to swim across to Hong Kong, where wages were dozens of times higher. Hardliners wanted more guards and more fences. Deng's view was simple. People run because life is better over there. So, make life better over here. In 1980, Shenzhen was a border town of around 30,000 people surrounded by rice paddies, fish ponds, and lychee trees. What happened next has no parallel in human history. Money poured in, first from Hong Kong businessmen, then from the whole world. A construction crew building the Guomao Skyscraper set a record of finishing one full floor every 3 days. The phrase Shenzhen Speed became a national catchphrase. A sign went up in the zone reading, "Time is money. Efficiency is life." People traveled from across China just to stare at it because a sentence like that had been a jailable thought a few years earlier. Today, Shenzhen is a city of around 17 to 18 million people. Its economy is larger than Hong Kong's. It gave birth to Huawei, Tencent, BYD, and DJI. A child born in that fishing town in 1980 watched it become one of the richest, most futuristic cities on the planet before turning 45. Many call it the fastest-growing city in human history. But, don't just look at the smooth sailing. Party conservatives attacked the zones constantly, calling them foreign concessions reborn, a return to the humiliations of the colonial era. In 1984, Deng toured Shenzhen personally, looked around, and settled the argument with a stroke of calligraphy, praising the zone's success. Translation for the whole party, "Touch this and you're touching me."
None of this works without one more ingredient. That ingredient was America. On January 1st, 1979, the United States and China established full diplomatic relations. Four weeks later, Deng landed in Washington as the guest of President Jimmy Carter. The moment everyone remembers came on February 2nd, 1979, at a rodeo in Simonton, Texas. A rider trotted up and handed the 74-year-old communist revolutionary a 10-gallon cowboy hat, and Deng, 4 ft 11, veteran of the Long March, put it on and grinned like a kid. The photo went around the world. That photo did real work. For 30 years, Americans had been told China was a nation of fanatics. Now, the guy running it was wearing a cowboy hat and waving from a stagecoach. Time magazine had already named him person of the year for 1978. It would do it again for 1985. Behind the photo ops, the pipeline opened. Boeing sold planes. Coca-Cola went in. Students went out, tens of thousands of them, to American universities, exactly what Deng wanted. Some officials worried the students might never come back. Deng backed the program anyway, betting that even if some stayed abroad, the ones who returned would bring back what China needed. Just so nobody mistook the smiling little man for a pushover, 2 weeks after flying home, Deng sent the Chinese army across the border into Vietnam in a short, bloody war, partly to punish Hanoi for invading Cambodia, and partly to show the world China could not be pushed around.
By 1982, Deng had a new puzzle. Hong Kong. Britain's lease on most of the territory ran out in 1997. In September 1982, Margaret Thatcher arrived in Beijing to negotiate, fresh off her military victory in the Falklands, planning to keep some form of British administration. Deng chain-smoked through their meeting, made regular use of the spittoon beside his chair, and calmly told her sovereignty was up for discussion. That if China wanted, it could take Hong Kong in a single afternoon. Thatcher, one of the toughest negotiators alive, came out shaken, and famously stumbled and fell on the steps outside the Great Hall of the People. Having won the staring contest, Deng offered something creative. One country, two systems. Hong Kong would return to China in 1997, but keep its capitalist economy, its courts, and its way of life untouched for 50 years. The deal was signed in December 1984. And Deng told people he had one personal wish left: to stand on Hong Kong soil, even in a wheelchair, after it came home.
Reform created winners, and it created ugly side effects. The half-planned, half-market economy had two prices for everything. One state price and one market price. Officials with connections got rich buying at one and selling at the other. Ordinary people watched the corruption and seethed. In 1988, a botched attempt to free up prices sent inflation soaring to around 18 to 19%. The worst since the revolution. And panicked shoppers stripped store shelves bare. Underneath the economics sat the question Deng refused to reopen. Students and intellectuals kept asking, "If we can free the economy, why not politics?" Deng's answer never changed. Back in 1979, he had laid down what he called the four cardinal principles. And at their core, sat one simple rule. The Communist Party stays in charge. When activists on Beijing's Democracy Wall pushed past that line, Deng, the great reformer, had the most famous of them, Wei Jingsheng, jailed for 15 years. Economic freedom? Yes. Challenges to party power? Never.
In 1987, party chief Hu Yaobang, seen as too soft on student protests, was forced out of his job. Then, on April 15th, 1989, Hu Yaobang died of a heart attack. And China caught fire. Students poured into Tiananmen Square to mourn Hu. The mourning turned into protest against corruption, against inflation, for a freer press, for accountability. Through April and May of 1989, the crowds grew until at their peak, as many as a million people filled the center of Beijing. Students launched a hunger strike. Workers joined. Similar protests broke out in hundreds of cities. The world's cameras were already in town for a visit by Soviet leader Mikhail Gorbachev, so the whole world watched live. The party split down the middle. General Secretary Zhao Ziyang wanted dialogue and compromise. Deng, now 84 and holding only one official post, saw something else. He had lived through warlords, invasion, civil war, and the Cultural Revolution. What he saw in the square was chaos, the thing he feared more than anything on Earth. He sided with the hardliners. Martial law was declared on May 20th. For 2 weeks, unarmed citizens of Beijing blocked the army's path. And for 2 weeks, it seemed the people had won. On the night of June 3rd into June 4th, the army was ordered in with live ammunition, and it shot its way to the square. How many died has never been established. The Chinese government said around 200 to 300, including soldiers. A Chinese Red Cross figure of 2,600 circulated briefly before being withdrawn. Most independent estimates land in the hundreds to over a thousand. And one declassified British cable claimed as many as 10,000, a figure most historians think is too high. Every one of those numbers is contested. Inside China, the entire event has been scrubbed so thoroughly that many young Chinese have never heard of it. Zhao Ziyang was purged and spent the last 15 years of his life under house arrest. Deng appeared on television on June 9th, praising the troops. The man who saved a billion people from poverty had ordered the army against his own citizens.
After 1989, Deng's life's work came within an inch of dying. Western sanctions hit. Growth crashed to around 4%. Party hardliners blamed the whole crisis on reform itself and started rolling it back, praising central planning and warning against peaceful evolution toward capitalism. Then, in December 1991, the Soviet Union, the mothership of world communism, simply ceased to exist. To Beijing's old guard, the lesson was obvious. Reform is how communist parties die. Freeze everything. Deng drew the exact opposite lesson. Fail to deliver prosperity, and you die like the Soviets did.
By now, he was 87 years old, officially retired from every single post, hard of hearing, and visibly weakened by Parkinson's disease. He wrote to the leadership pushing for faster reform. He was ignored. So, in January 1992, the old man got on a train. Officially, it was a family vacation to the south. In reality, it was the last battle of his life. Rolling through Wuchang, Changsha, Shenzhen, and Zhuhai, Deng gave speech after speech with the bluntness of a man with nothing left to lose. "Development," he said, "is the only hard truth. Markets and plans are just tools, and capitalism has no monopoly on markets. Poverty is not socialism. Leaders who refuse to push reform forward should step down." State media in Beijing ignored him completely at first. A Shenzhen newspaper broke the silence. The army signaled its support, and the dam burst. Within months, the leadership swung behind him, and by October 1992, the party formally adopted the goal of a socialist market economy. Growth shot past 14% that year. Foreign investment flooded in at levels never seen before. A retired 87-year-old with zero official titles had turned the direction of a billion-person country using nothing but train stops and words. Because in China, real authority was never about the job title. It was about being Deng Xiaoping. The gamble was locked in. This time, nobody could unwind it.
Deng Xiaoping died on February 19th, 1997, at the age of 92 from Parkinson's disease and a lung infection. 132 days before Hong Kong came home on July 1st. The one personal wish he had allowed himself to stand on Hong Kong soil after the handover missed by 4 and 1/2 months. For the scoreboard, in 1978, China's economy was worth about $150 billion. Today, it's around 19 and 1/2 trillion, roughly 130 times larger. The extreme poverty rate fell from 88% to under 1%. The World Bank counts around 800 million Chinese lifted out of extreme poverty since 1978. The fastest escape from poverty in the history of our species. Life expectancy climbed from the 60s to around 78. China became the world's largest exporter, the world's second largest economy, and home to the world's biggest middle class. Millions of people alive today, maybe someone you know, maybe you, exist because their grandparents didn't starve in the 1980s. If you want to know more on how China escaped poverty in just 40 years, watch the video on your screen right now. Thanks for watching and subscribe to the channel because this is just the beginning.