The political revolutions in Eastern Europe nearly engulfed the package deal. When I returned to Washington three days later, I reported my conversation with Deng to Bush, Scowcroft, and Secretary of State James Baker at a dinner in the White House. As it turned out, China was not the principal subject. The subject of overriding importance for my hosts at that moment was the impact of the fall of the Berlin Wall and an imminent meeting between Bush and Gorbachev—set for December 2–3, 1989, in Malta. Both issues required some immediate decision about tactics and long-term strategy. Were we heading for the collapse of the East German satellite where twenty Soviet divisions were still stationed? Would there now be two German states, albeit a non-Communist East German one? If unification became the goal, by what diplomacy should it be sought? And what should America’s attitude be in foreseeable contingencies?

  Amidst the drama surrounding the Soviet collapse in Eastern Europe, Deng’s package deal could not receive the priority it would have elicited in less tumultuous times.

  The special mission I discussed with Deng did not take place until mid-December, when Brent Scowcroft and Lawrence Eagleburger visited Beijing for the second time in six months. The visit was not secret as the July trip had been (and at this point, still remained) but was intended to be low-profile to avoid congressional and media controversy. However, the Chinese side engineered a photo op of Scowcroft toasting Qian Qichen, provoking considerable consternation in the United States. Scowcroft would later recount:

  [A]s the ritual toasts began at the end of the welcoming dinner given by the foreign minister, the television crews reappeared. It was an awkward situation for me. I could go through with the ceremony and be seen as toasting those the press was labeling “the butchers of Tiananmen Square,” or refuse to toast and put in jeopardy the whole purpose of the trip. I chose the former and became, to my deep chagrin, an instant celebrity—in the most negative sense of the term.36

  The incident demonstrated the conflicting imperatives of the two sides. China wanted to demonstrate to its public that its isolation was ending; Washington sought to draw a minimum of attention, to avoid a domestic controversy until an agreement had been reached.

  Inevitably, discussion of the Soviet Union occupied much of Scowcroft and Eagleburger’s trip, though in quite the opposite direction from what had become traditional: the subject now was no longer the military menace of the USSR, but its growing weakness. Qian Qichen predicted the disintegration of the Soviet Union and described Beijing’s surprise when Gorbachev, on his visit in May, at the height of the Tiananmen demonstrations, asked China for economic assistance. Scowcroft later recounted the Chinese version of these events:

  The Soviets did not grasp the economy very well and Gorbachev often did not grasp what he was asking of it. Qian predicted the collapsing economy and the nationalities problems would result in turmoil. “I have not seen Gorbachev taking any measures,” he added. “Gorbachev has called on the Chinese side to provide consumer necessities,” he told us. “ . . . [W]e can provide consumer goods and they will pay back in raw materials. They also want loans. We were quite taken aback when they first raised this. We have agreed to extend some money to them.”37

  The Chinese leaders put forward their “package” solution to Scowcroft and linked the release of Fang Lizhi to the removal of American sanctions. The administration preferred to treat the Fang case as a separate humanitarian issue to be settled in its own right.

  Further upheavals in the Soviet bloc—including the bloody overthrow of Romania’s Communist leader, Nicolae Ceauşescu—bolstered the sense of siege in the Chinese Communist Party. The disintegration of the Eastern European Communist states also strengthened the hand of those in Washington who argued that the United States should wait for what they saw as the seemingly inevitable collapse of the Beijing government. In this atmosphere, neither side was in a position to depart from its established positions. Negotiations over Fang’s release would continue through the American Embassy, and the two sides would not reach a deal until June 1990—over a year after Fang and his wife first sought refuge and eight months after Deng had put forward his package proposal.38

  In the meantime, the annual reauthorization of China’s Most Favored Nation trade status—required for “nonmarket” countries under the terms of the 1974 Jackson-Vanik Amendment, which made Most Favored Nation treatment conditional on emigration practices—was transformed into a forum for congressional condemnation of China’s human rights record. The underlying assumption of the debate was that any agreement with China was a favor, and under the circumstances repugnant to American democratic ideals; trade privileges should thus be predicated on China’s moving toward an American conception of human rights and political liberties. A sense of isolation began to descend on Beijing and a mood of triumphalism on Washington. In the spring of 1990, as Communist governments collapsed in East Germany, Czechoslovakia, and Romania, Deng circulated a stark warning to Party members:

  Everyone should be very clear that, in the present international situation, all the attention of the enemy will be concentrated on China. It will use every pretext to cause trouble, to create difficulties and pressures for us. [China therefore needs] stability, stability, and still more stability. The next three to five years will be extremely difficult for our party and our country, and extremely important. If we stand fast and survive them, our cause will develop quickly. If we collapse, China’s history will regress for several tens of years, even for a hundred years.39

  The 12- and 24-Character Statements

  At the close of the dramatic year, Deng chose to carry out his long-planned retirement. During the 1980s, he had taken many steps to end the traditional practice of centralized power ending only by the death of the incumbent or the loss of the Mandate of Heaven—criteria both indefinite and inviting chaos. He had established an advisory council of elders to which he retired leaders who were holding on to lifetime tenure. He had told visitors—including me—that he himself intended to retire soon to the chairmanship of that body.

  Starting in early 1990, Deng began a gradual withdrawal from high office—the first Chinese leader to have done so in the modern period. Tiananmen may have accelerated the decision so that Deng could oversee the transition while a new leader was establishing himself. In December 1989, Brent Scowcroft proved to be the last foreign visitor to be received by Deng. At the same time, Deng stopped attending public functions. By the time of his death in 1997, he had become a recluse.

  As he receded from the scene, Deng decided to buttress his successor by leaving behind a set of maxims for his guidance and that of the next generation of leaders. In issuing these instructions to Communist Party officials, Deng chose a method from Chinese classical history. The instructions were stark and succinct. Written in classical Chinese poetic style, they embraced two documents: a 24-character instruction and a 12-character explanation restricted to high officials. The 24-character instruction read:

  Observe carefully; secure our position; cope with affairs calmly; hide our capacities and bide our time; be good at maintaining a low profile; and never claim leadership.40

  The 12-character policy explanation followed with an even more restricted circulation among the leaders. It read:

  Enemy troops are outside the walls. They are stronger than we. We should be mainly on the defensive.41

  Against whom and what? The multiple-character statements were silent on that issue, probably because Deng could assume that his audience would understand instinctively that their country’s position had grown precarious, both domestically and even more so internationally.

  Deng’s maxims were, on one level, an evocation of historic China surrounded by potentially hostile forces. In periods of resurgence, China would dominate its environs. In periods of decline, it would play for time, confident that its culture and political discipline would enable it to reclaim the greatness that was its due. The 12-character statement told China’s leaders that perilous times had arrived. The outside world had always had difficulty dealing with this unique organism, aloof yet universal, majestic yet given over to occasional bouts of chaos. Now the aged leader of an ancient people was giving a last instruction to his society, feeling besieged as it was attempting to reform itself.

  Deng sought to rally his people not by appealing to its emotions or to Chinese nationalism, as he easily could have. Instead he invoked its ancient virtues: calm in the face of adversity; high analytical ability to be put in the service of duty; discipline in pursuit of a common purpose. The deepest challenge, he saw, was less to survive the trials sketched in the 12-character statement than to prepare for the future, when the immediate danger had been overcome.

  Was the 24-character statement intended as guidance for a moment of weakness or a permanent maxim? At the moment, China’s reform was threatened by the consequences of internal turmoil and the pressure of foreign countries. But at the next stage, when reform had succeeded, China’s growth might trigger another aspect of the world’s concern. Then the international community might seek to resist China’s march to becoming a dominant power. Did Deng, at the moment of great crisis, foresee that the gravest danger to China might arise upon its eventual resurgence? In that interpretation, Deng urged his people to “hide our capacities and bide our time” and “never claim leadership”—that is to say, do not evoke unnecessary fears by excessive assertiveness.

  At its low point of turmoil and isolation, Deng may well have feared both that China might consume itself in its contemporary crisis and also that its future might depend on whether the leaders of the next generation could gain the perspective needed to recognize the perils of excessive self-confidence. Was the statement addressed to China’s immediate travail, or to whether it could practice the 24-character principle when it was strong enough to no longer have to observe it? On China’s answer to these questions depends much of the future of Sino-American relations.

  CHAPTER 16

  What Kind of Reform?

  Deng’s Southern Tour

  IN JUNE 1989, with the Communist Party leadership divided on what to do, the Party General Secretary Zhao Ziyang, appointed by Deng three years earlier, was purged over his handling of the crisis. The Party Secretary of Shanghai, Jiang Zemin, was elevated to head the Communist Party.

  The crisis confronting Jiang was one of the most complex in the history of the People’s Republic. China was isolated, challenged abroad by trade sanctions and at home by the aftermath of nationwide unrest. Communism was in the process of disintegrating in every other country in the world except North Korea, Cuba, and Vietnam. Prominent Chinese dissidents had fled abroad, where they received asylum, a sympathetic ear, and freedom to organize. Tibet and Xinjiang were restive. The Dalai Lama was feted abroad; in the same year as Tiananmen, he won the Nobel Peace Prize amidst an upsurge of international attention to the cause of Tibetan autonomy.

  After every social and political upheaval, the most serious challenge for governance is how to restore a sense of cohesion. But in the name of what principle? The domestic reaction to the crisis was more threatening to reform in China than the sanctions from abroad. Conservative members of the Politburo, whose support Deng had needed during the Tiananmen crisis, blamed Deng’s “evolutionary policy” for the crisis and pressured Jiang to return to traditional Maoist verities. They went so far as to seek to reverse seemingly well-established policies such as the condemnation of the Cultural Revolution. A Politburo member named Deng Liqun (also known as “Little Deng”) asserted: “If we fail to wage a resolute struggle against liberalization or [against] capitalistic reform and opening up, our socialist cause will be ruined.”1 Deng and Jiang held exactly the opposite view. The Chinese political structure, in their perception, could be given a new impetus only by accelerating the reform program. They saw in improving the standard of living and enhancing productivity the best guarantee of social stability.

  In this atmosphere Deng, in early 1992, emerged from retirement for his last great public gesture. He chose the medium of an “inspection tour” through southern China to urge continued economic liberalization and build public support for Jiang’s reform leadership. With reform efforts stagnating and his protégés losing ground to traditionalists in the Party hierarchy, the eighty-seven-year-old Deng set out with his daughter Deng Nan and several close associates on a tour through economic hubs in southern China, including Shenzhen and Zhuhai, two of the Special Economic Zones established under the 1980s reform program. It was a crusade for reform on behalf of “socialism with Chinese characteristics,” which meant a role for free markets, scope for foreign investment, and appeal to individual initiative.

  Deng, at this point, had no official title or formal function. Nevertheless, like an itinerant preacher, he turned up at schools, hightechnology facilities, model businesses, and other symbols of his vision of Chinese reform, challenging his countrymen to redouble their efforts and setting far-reaching goals for China’s economic and intellectual development. The national press (which was, at the time, controlled by conservative elements) initially ignored the speeches. But accounts in the Hong Kong press eventually filtered back to mainland China.

  In time, Deng’s “Southern Tour” would take on an almost mythical significance, and his speeches would serve as the blueprint for another two decades of Chinese political and economic policy. Even today, billboards in China portray images and quotations from Deng’s Southern Tour, including his famous dictum that “development is the absolute principle.”

  Deng set out to vindicate the program of reform against the charge that it was betraying China’s socialist heritage. Economic reform and development, he argued, were fundamentally “revolutionary” acts. Abandoning reform, Deng warned, would lead China down a “blind alley.” To “win the trust and support of the people,” the program of economic liberalization must continue for “a hundred years.” Reform and opening up, Deng insisted, had allowed the People’s Republic to avoid civil war in 1989. He reiterated his condemnation of the Cultural Revolution, describing it as beyond failure, a kind of civil war.2

  The heir of Mao’s China was advocating market principles, risk taking, private initiative, and the importance of productivity and entrepreneurship. The profit principle, according to Deng, reflected not an alternative theory to Marxism but an observation of human nature. Government would lose popular support if it punished entrepreneurs for their success. Deng’s advice was that China should “be bolder,” that it should redouble its efforts and “dare to experiment”: “We must not act like women with bound feet. Once we are sure that something should be done, we should dare to experiment and break a new path. . . . Who dares claim that he is 100 percent sure of success and that he is taking no risks?”3

  Deng dismissed criticism that his reforms were leading China down the “capitalist road.” Rejecting decades of Maoist indoctrination, he invoked his familiar maxim that what mattered was the result, not the doctrine under which it was achieved. Nor should China be afraid of foreign investment:

  At the current stage, foreign-funded enterprises in China are allowed to make some money in accordance with existing laws and policies. But the government levies taxes on those enterprises, workers get wages from them, and we learn technology and managerial skills. In addition, we can get information from them that will help us open more markets.4

  In the end, Deng attacked the “left” of the Communist Party, which was in a sense part of his own early history, when he had been Mao’s “enforcer” in creating agricultural communes: “At present, we are being affected by both Right and ‘Left’ tendencies. But it is the ‘Left’ tendencies that have the deepest roots. . . . In the history of the Party, those tendencies have led to dire consequences. Some fine things were destroyed overnight.”5

  Prodding his countrymen by appealing to their national pride, Deng challenged China to match the growth rates of neighboring countries. In a sign of how far China has come in less than twenty years since the Southern Tour, Deng, in 1992, extolled the “four big items” it was essential to make available to consumers in the countryside: a bicycle, a sewing machine, a radio, and a wristwatch. China’s economy could “reach a new stage every few years,” he declared, and China would succeed if the Chinese dared to “emancipate our minds and act freely” in responding to challenges as they arose.6

  Science and technology were the key. Echoing his pathbreaking speeches from the 1970s, Deng insisted that “intellectuals are part of the working class”; in other words, they were eligible for Communist Party membership. In an overture to Tiananmen supporters, Deng urged intellectuals who were in exile to return to China. If they possessed specialized knowledge and skills, they would be welcomed regardless of their previous attitudes: “They should be told that if they want to make their contributions, it would be better for them to come home. I hope that concerted efforts will be made to accelerate progress in China’s scientific, technological and educational undertakings. . . . We should all love our country and help to develop it.”7

  What an extraordinary reversal in the convictions of the octogenarian revolutionary who had helped build, often ruthlessly, the economic system he was now dismantling. When serving in Yan’an with Mao during the civil war, Deng gave no indication that he would, fifty years later, be traveling around his country, urging reform of the very revolution he had enforced. Until he ran afoul of the Cultural Revolution, he had been one of Mao’s principal aides, distinguished by his single-mindedness.