October 22, 1984

I think that the current Central Committee is experienced and that it has handled different kinds of problems properly and in an orderly way. Foreign newspapers and magazines say that I play a role in it. True, I do play a certain role. I offer some advice, but it is the other comrades who do most of the work and perform the hardest tasks. Take, for example, the "Decision on Reform of the Economic Structure". When the decision was adopted by the Central Committee the day before yesterday, I made a few remarks. I said I thought it read like the draft of a textbook on political economy that integrated the fundamental tenets of Marxism with the practice of socialism in China. That was my assessment of it. Over the past two days there has been a good deal of reaction to this decision both at home and abroad. Everyone says it is of historic significance. It is really a very good document, but I didn't write or revise a single word of it. That's the truth. So don't try to exaggerate my role. That would only raise doubts in people's minds and lead them to believe that China's policies will change once Deng is gone. That's just what the world community is concerned about.

We should make it clear to the rest of the world that nobody can alter the principles, policies and strategies we have worked out. Why? Because experience has shown that they are sound and effective. The people's standard of living is rising, the country is thriving and China's international prestige is growing. These are the most essential facts. If the current policies were changed, the country and the people would suffer. So the people, primarily the 800 million peasants, would never agree to their being changed. If the rural policies were changed, their living standards would immediately decline. There are still tens of millions of people in the countryside who do not yet have enough food and clothing, although things are much better than before. Now that most parts of the country have become better off, the state can spare more resources to help the few poor areas develop. The central authorities have drawn up a plan in this regard. The problem will not be too difficult to solve, because both the state and the prosperous areas can lend a helping hand. We know from our own experience that our generation will not change the policies; nor will the next generation or the next few after that.

In my recent talks with foreign guests, I never failed to assure them that our current policies would not change, that they could rely on their continuity. Still, they were not completely convinced. This is a serious problem of which I am well aware. That's why I have adopted a lighter work schedule. The advantages are first, that I can enjoy a longer life, and second, that some comrades who are younger can do more work and do it better than I, because they are full of energy. I hope I can gradually give up work altogether and maintain my good health. Then I shall have fulfilled my mission. But at the moment I still have to do some work. Last year I devoted myself to only one task: a crackdown on crime. This year I have worked on two projects: opening another 14 coastal cities and resolving the Hong Kong question through the "one country, two systems" approach. Everything else has been done by other people.

The policy of "one country, two systems" has been adopted out of consideration for China's realities. China is faced with the problems of Hong Kong and Taiwan. There are only two ways to solve them. One is through negotiation and the other is by force. To solve a problem by peaceful negotiation requires that the terms be acceptable to all parties. The solution to the Hong Kong question should be acceptable to China, Britain and the inhabitants of Hong Kong. What formula will they accept? A socialist transformation of Hong Kong would not be acceptable to all parties. Therefore, the formula of "one country, two systems" was proposed.

When Mrs. Thatcher came to hold talks with us two years ago, she insisted that according to international law a treaty once signed remains valid and that Britain would continue its administration of Hong Kong after 1997. I told her that sovereignty was not negotiable and that China would recover the whole of Hong Kong in 1997. As to the manner of the recovery, we decided to negotiate. I said the negotiations would take two years; less than that would not do. But, I said, the question must be solved in not more than two years. Then China would formally declare its decision to recover Hong Kong in 1997.

It turned out that the negotiations did take two years. At the very beginning Mrs. Thatcher proposed that the talks should deal only with the question of jurisdiction over Hong Kong. I said there were three questions to be dealt with. The first was the question of sovereignty, that is, the two sides had to reach agreement on the return of Hong Kong to China; the second was how to administer the affairs of Hong Kong after we resumed the exercise of sovereignty in 1997, that is, what system was to be instituted there; and the third was what arrangements to make for the 15-year period of transition, that is, how to create the conditions for China to resume the exercise of sovereignty. Mrs. Thatcher agreed to discuss these questions. Of the two years of talks, more than a year was spent on the issue of jurisdiction and sovereignty, but she made no concessions. I told her then that if anything unexpected happened in Hong Kong during the 15-year period of transition -- if there were disturbances, for example -- and if the Sino-British talks failed, China would reconsider the timing and manner of its recovery of Hong Kong. So at that time, China set the keynote for a settlement of the Hong Kong question. And indeed we have proceeded in accordance with this keynote ever since.

Why were the negotiations on the Hong Kong question a success? Not because of any special feats on the part of our negotiators but chiefly because of the rapid progress our country has been making in recent years -- it has been thriving and growing powerful and has proved trustworthy. We mean what we say and we keep our word. Since the fall of the Gang of Four, and especially in the six years since the Third Plenary Session of the Eleventh Central Committee, highly favourable changes have taken place in China. Its image has improved. Our own people have seen this, and so have people in other countries. We can be proud of that. Of course, there is a difference between pride and conceit. We should not be conceited or boastful, because we are still economically backward. But we have good prospects as a nation, as is demonstrated by the resolution of the Hong Kong question. Of course, that resolution was achieved also because we adopted the fundamentally correct policy or strategy of "one country, two systems". And it was the result of the combined efforts of the Chinese and British governments.

The resolution of the Hong Kong question has a direct bearing on the Taiwan question. It will take a long time to resolve the Taiwan question; we should not be impatient for quick results. It is still our principle to negotiate with those in power in the Kuomintang. Some people in Taiwan have reacted to that principle by complaining that we don't place any importance on the people of Taiwan. In the draft of the speech delivered by the Premier at a National Day reception not long ago, the phrase "the Taiwan authorities" was expanded to read "the Taiwan authorities and people of all walks of life". It was I who made the change. This means that we should reach out to more people in handling the Taiwan question. In addition to the Kuomintang authorities and Chiang Ching-kuo, we should contact as many sectors as possible. We have done a little of this, but we should go about it in a more systematic way.

We are well aware that the United States policy is to hang onto Taiwan. Over the past two or three years we have repeatedly criticized the hegemonism of the United States, which regards Taiwan as its unsinkable aircraft carrier. There are some people in the U.S. who are in favour of the reunification of Taiwan with the mainland, but their view does not prevail. The Carter Administration [1977-1981] committed itself to the withdrawal of American troops from Taiwan, but at the same time it adopted the Taiwan Relations Act, which constituted interference in China's internal affairs. We therefore need time to work on both the Taiwan authorities and the U.S. government.

Both of them should be able to accept the "one country, two systems" formula as a solution to the Taiwan question. Is it realistic of Chiang Ching-kuo to propose unifying China with the "Three People's Principles"? His "Three People's Principles" were applied in China for 22 years, from 1927 to 1949. What became of China then? When did the Chinese people stand up? In 1949. It was the Communist Party and socialism, not Chiang Kai-shek, that made it possible for the Chinese people to stand up. Isn't "one country, two systems" -- a formula under which neither side will swallow up the other -- a better solution?

Recently a foreigner asked me whether we would adopt a policy for the settlement of the Taiwan question similar to our policy for the resolution of the Hong Kong question. I said that in the case of Taiwan our policy would be even more flexible. By more flexible I mean that in addition to the policies used to settle the Hong Kong question, we shall allow Taiwan to maintain its own armed forces. While we shall persevere in our efforts to solve the Taiwan question by peaceful means, we have never ruled out the possibility of using non-peaceful means. We cannot make a commitment like that. What should we do if the Taiwan authorities refuse to negotiate with us forever? Can we give up on the reunification of our country? Of course, there can be no question of using force rashly, because we have to devote our energies to economic development, and if the question of reunification is postponed, that will do no harm to the overall situation. But we cannot rule out the use of force -- that is something we must bear in mind, and so must the next generation. This is a strategic consideration.

I have also told foreign guests that to settle international disputes new solutions should be put forward in the light of new situations and new problems. The "one country, two systems" solution was proposed in the light of realities in China, but it could also be applied to certain international problems. Many international disputes may reach the flash point if they are not handled properly. I asked our guests whether the "one country, two systems" solution could not be applied in some cases and the "joint development" solution in others. The notion of "joint development" was also proposed first in the light of our own realities. We have the question of Diaoyu Island and the question of the Nansha Islands [the Spratlys]. The question of Diaoyu Island was raised at a press conference during my visit to Japan. I replied that there was a controversy over this issue between China and Japan. There are different names for the same island -- in Japan it is known as Senkaku Shoto. This question, I said, could be set aside for the moment; probably the next generation would be cleverer than we and would find a practical solution.

At the time, I was wondering whether it would be possible for the two countries to develop the area jointly, without getting involved in the controversy over sovereignty. This would only mean joint exploitation of the offshore oil resources. We could have a joint venture that would profit both sides. It would not be necessary to fight a war or to hold many rounds of talks. World maps have always shown the Nansha Islands as part of China. Now one of the islands is occupied by Taiwan, while others are occupied by the Philippines, Vietnam or Malaysia. What is to be done? One alternative is to take all these islands back by force; another is to set aside the question of sovereignty and develop them jointly. By so doing we can make the problems that have piled up over the years disappear. This question will have to be settled sooner or later. There are many international disputes of this kind. We Chinese stand for peace and wish to settle all disputes by peaceful means. What kind of peaceful means? "One country, two systems" and "joint development". The foreign guests who talked with me all agreed that this was a new and interesting idea.

Now I should like to turn to domestic issues. As I said at the beginning, our current Central Committee is working well and in an orderly way. The situation as a whole is very good. Isn't it stated in the "Decision on Reform of the Economic Structure" that political stability and unity are increasing? That is quite true. How often since its founding has our Party experienced as good a political situation as this? In my talk with foreign guests, I was bold enough to say that we would be able to quadruple our GNP by the year 2000. We never dared be so positive before. We used to say only that with strenuous efforts we might be able to do it. Four years into the period of the Sixth Five-Year Plan [1980-1985], we find that the major production targets have been reached two years ahead of time and that this year's annual plan also will be overfulfilled. We used to say that a fourfold increase would be realized if the average growth rate reached 6.5 per cent for the 1980s and 7.2 per cent for the last two decades of the century as a whole. It now seems that the average growth rate for the 1980s may exceed 7.2 per cent, because for the last three years it was nearly 8 per cent.

Quadrupling the gross national product will be an achievement of great significance. It will mean an annual GNP of US $1 trillion by the year 2000. At that time China's GNP will place it in the front ranks of countries. In terms of the people's living standards $1 trillion will mean a comfortable life, and in terms of national strength China will be quite powerful. Because if we allocated 1 per cent of the GNP to national defence, that would come to $10 billion, and it would be easy to upgrade our military equipment. I have learned that the Soviet Union allocates 20 per cent of its gross national product to national defence. With such a heavy burden on its back, the country is bowed down. With $10 billion we could accomplish a great deal. If that sum were devoted to science and education, we could run many universities, and we could also spend more on universal primary and secondary education. The investment in intellectual resources must exceed 1 per cent. Right now we are facing too many difficulties to add even a small amount to the funds for education and scientific research. By the end of the century, our people will have a comfortable standard of living, much higher than the one they have now.

Last year I toured Suzhou. The industrial and agricultural output of the area had reached a per capita value of approximately $800. I asked about the living standards. First, people in Suzhou don't want to leave for Shanghai or Beijing. Probably in most parts of southern Jiangsu Province people are happy with their lives and have no wish to leave their hometowns. Second, the average living space exceeds 20 square metres per person. Third, everybody has received primary and secondary education, because the people have more money to spend on schools. Fourth, the people have no more problems with food or clothing, and many of them own television sets, household appliances and whatnot. Fifth, there has been a tremendous change in people's ethical standards, and crime and violations of discipline have declined significantly. There are other improvements that I can't recall now. But the ones I have just cited are impressive enough!

For now, we should continue our efforts to crack down on criminals. But when the people really have a comfortable standard of living, their attitude towards life will be quite different. Material conditions are the foundation. With improved material conditions and a higher educational level, there will be a great change in people's standards of conduct. It is necessary for us to crack down on criminals and we should continue to do so. But the ultimate solution does not lie in bringing criminals to justice. The real, permanent solution is to quadruple the GNP and develop the economy. Of course, we shall still have to conduct education among the people; work among the people can never be dispensed with. But economic development is the foundation, and it will make that work easier. What will the political situation be like once we have quadrupled the GNP? I am confident that there will be genuine stability and unity. China will be truly powerful, exerting a much greater influence in the world. That's why we have to work hard. There are 16 more years until the year 2000. Let's apply ourselves and work with one heart and one mind.

Quadrupling the GNP will be a significant achievement in another way too. It will provide a new starting point from which, in another 30 to 50 years, we shall approach the level of the developed countries. I am talking about production and living standards, not political systems. This is something feasible, tangible and within our grasp. But we shall not be able to reach this new target without the policy of opening to the outside world. The volume of our foreign trade now stands at a little over $40 billion. Right? How can we quadruple the GNP with such meagre imports and exports? What shall we do with our products when our annual GNP reaches $1 trillion? Are we going to sell all of them on the domestic market? And are we going to produce at home everything we need? Naturally we are going to import some things from abroad and sell some things to other countries, aren't we? So, if we don't open to the outside world, it will be difficult to quadruple the GNP and even more difficult to make further progress after that. Foreigners worry that our open policy might change. I have said that it will not change. I have told them that our first target covers the period between now and the end of the century and that we have a second target to attain within another 30 to 50 years -- maybe longer, but say 50 years -- in which the open policy will remain indispensable.

A closed-door policy prevents any country from developing. We suffered from isolation, and so did our forefathers. You might say it was an open policy of a sort when Zheng He was sent on voyages to the western oceans by Emperor Cheng Zu of the Ming Dynasty. But the Ming Dynasty began to decline with the death of Emperor Cheng Zu. In the Qing Dynasty, during the reigns of Kang Xi and Qian Long, there was no open policy to speak of. China remained isolated for more than 300 years from the middle of the Ming Dynasty to the Opium War, or for nearly 200 years counting from the reign of Kang Xi. As a consequence, the country declined into poverty and ignorance. After the founding of the People's Republic, during the period of the First Five-Year Plan, we did open our country to the outside world, but only to the Soviet Union and the East European countries. And later we closed our doors. It's true that we achieved certain things, but on the whole we did not make striking progress. Of course, that was due to many domestic and international factors, including the mistakes we made ourselves. But the lessons of the past tell us that if we don't open to the outside we can't make much headway.

Opening will not hurt us. Some of our comrades are always worried that if we open up, undesirable things may be brought into China. Above all, they worry that the country might go capitalist. I'm afraid some of our veteran comrades do harbour such misgivings. Since they have been devoted to socialism and communism all their lives, they are horrified by the sudden appearance of capitalism. They can't stand it. But it will have no effect on socialism. No effect. Of course, some negative elements will come in, and we must be aware of that. But it will not be difficult for us to overcome them; we'll find ways of doing so. If we isolate ourselves and close our doors again, it will be absolutely impossible for us to approach the level of the developed countries in 50 years. Even if our country remains as open as it is now, and even when our per capita GNP reaches several thousand dollars, no new bourgeoisie will emerge, because the basic means of production will still be state-owned or collectively owned -- in other words, publicly owned. And if the country prospers and the people's material and cultural life continually improves, what's wrong with that? However much we open up in the next 16 years until the end of the century, the publicly owned sector of the economy will remain predominant. Even in a joint venture with foreigners, half is socialist-owned. And we shall take more than half of the earnings of joint ventures. So, don't be afraid. It is the country and the people who will benefit most from them, not the capitalists.

With regard to some other problems, we don't have to be impatient for quick solutions. For instance, the emergence of privately hired labour was quite shocking a while back. Everybody was very worried about it. In my opinion, that problem can be set aside for a couple of years. Will that affect the overall situation? If we act on the question now, people will say the policies have changed, and they will be upset. If you put the man who makes "Fool's Sunflower Seeds" out of business, it will make many people anxious, and that won't do anybody any good. What is there to be afraid of if we let him go on selling his seeds for a while? Will that hurt socialism?

The document on reform of the economic structure is a good one, because it explains what socialism is in terms never used by the founders of Marxism-Leninism. There are some new theories. I think it has clarified things. We could never have drawn up such a document without the experience of the last few years. And even if it had been produced, it would have been very hard to get it adopted -- it would have been regarded as heresy. Our experience has enabled us to answer new questions that have arisen under new circumstances. We have been stressing the need to uphold the Four Cardinal Principles, haven't we? That is truly upholding socialism. Otherwise, we would merely be "preferring socialist weeds to capitalist seedlings", as the Gang of Four wanted. Veteran comrades must emancipate their minds. I say the decision is good because all the comrades on the Central Committee, the Central Advisory Commission and the Central Commission for Discipline Inspection agree with it and appreciate the necessity and importance of issuing such a programmatic document at this point. It is a good document.

The decision is in ten parts, all of which are important, but the ninth is the most important. The ninth part can be summed up as ``respecting knowledge and talented people''. The key to success is to identify and employ talented people. To be more specific, some comrades now in their 50s are quite competent. But 10 years from now they will be in their 60s. We should therefore unhesitatingly promote young and middle-aged cadres, especially those in their 30s and 40s, as suggested by Comrade Chen Yun. That was a good suggestion. Young people in this age group who are promoted will have a longer time to work. They may not have sufficient experience now, but in a couple of years they will have. They may not be qualified now, but in a couple of years they will be. Their minds are more flexible. Next year Party consolidation will be extended to include units and enterprises at the grass-roots level. This will be extremely important work, and its success or failure will depend on whether we can find a lot of capable young people now. Because by the end of the century those who are now 30 will be only in their 40s and those who are 40 will be only in their 50s.

Veteran comrades on the Central Advisory Commission should give more thought to this question and offer their advice. They must be open-minded about it, because otherwise nothing can be accomplished. We should persuade older comrades to vacate their leading posts. If they don't, there will be no positions for the young cadres. Our general situation is one of stability and unity, but if there are difficulties anywhere that have not been overcome, it is in relation to this question. It doesn't matter much if problems crop up in other areas. But if we don't solve this one, it will have serious consequences and result in major errors. It is not easy to ask older comrades to give up their positions, but that is what we have to do, and we must not back down. I said two years ago that I hoped to be the first to retire. At the time the Central Advisory Commission was established, I said it was a transitional form to be replaced ultimately by a retirement system. We only have a limited number of posts; besides, we are planning to streamline our administration. If the old don't make way, how can the young be promoted? And if they can't, how is our cause to thrive?

In this respect too, we should learn from the developed countries. Some Third World countries have also been quite successful in solving this problem. I was told recently that in a number of them, most of the ministers are only in their 30s. Some are older, but relatively few. Prime ministers are probably older, but, in general, only in their 50s. We were young at the time of nationwide liberation. I was 45, and many comrades were even younger. I was only 23 at the end of 1927 when I first served as Secretary-General of the Central Committee. That was quite a high office. I didn't know much, but I managed. In short, it is an important responsibility of our Central Advisory Commission to choose young cadres for promotion.

(From Selected Works of Deng Xiaoping, Volume III <1982-1992>)