Singapore to study how they utilised foreign capital.
Singapore benefited from
factories set up by foreigners in Singapore: first, foreign enterprises paid 35 per
cent of their net profits in taxes which went to the state; second, labour income
went to the workers; and third, it [foreign investment] generated the service
sectors. All these were income [for the state].”
What he saw in Singapore in
1978 had become a point of reference as the minimum the Chinese people
should achieve.
At the end of January 1979 Deng visited America and restored diplomatic
relations with President Carter without the United States abandoning Taiwan. He
was making sure the United States would not align itself with the Soviet Union
when China attacked and “punished” Vietnam. That was why he was keen to
visit the United States.
At the governor’s lodge at Fanling in Hong Kong for a golfing holiday, I met
David Bonavia,
a China expert, formerly of the London
Times
. He dismissed
Deng’s warning as an idle threat because the Soviet navy was in the South China
Sea. I said that I had met Deng three months ago and he was a man who weighed
his words carefully. Two days later, on 16 February 1979,
Chinese forces
attacked across the border with North Vietnam.
China declared that the objectives of the military action were limited, and
urged the UN Security Council to take immediate and effective measures to stop
Vietnam’s armed aggression against Cambodia and bring an end to Vietnam’s
occupation of Cambodia. The operation lasted one month. They incurred heavy
losses but showed the Vietnamese that, whatever the cost, they could make deep
incursions into Vietnam, destroy towns and villages in their path and withdraw,
as they did on 16 March 1979.
During China’s invasion of Vietnam, Deng said publicly that China was
prepared for a possible war with the Soviet Union, and that a lesson for Vietnam
was also a lesson for the Soviet Union. The Soviet Union did not attack China.
The Western press wrote off the Chinese punitive action as a failure. I believe it
changed the history of East Asia. The Vietnamese
knew China would attack if
they went beyond Cambodia on to Thailand. The Soviet Union did not want to
be caught in a long-drawn-out war in a remote corner of Asia. They could afford
a quick decisive action against China, but the Chinese denied them this by
declaring that their military action was a “punitive” action and was not intended
to capture Vietnam. As Deng had predicted, the Soviet Union was saddled with
the burden of supporting Vietnam, which they did for 11 more years until 1991,
when the Soviet Union disintegrated. When this happened,
the Vietnamese
agreed in October 1991 to withdraw from Cambodia – after 12 years of costly
and futile occupation.
On my second visit to China, in November 1980, I found many changes. The
men who had got “helicopter” promotions during the Cultural Revolution had
been quietly shunted aside and their keen, zealous
attitudes were no longer on
display. Our protocol officer’s perpetual eager-beaver look was an enduring
impression I had carried away from my first visit in 1976. With the Cultural
Revolution officially denounced, the people appeared greatly relieved.
Premier Zhao Ziyang met me for talks. He was a different character from
Hua Guofeng or Deng Xiaoping.
Of medium build, he had the complexion of
someone with a light suntan over his fine features. I had no difficulty
understanding his Mandarin because he had a good,
strong voice without any
heavy provincial accent. He came from Henan, a province south of Beijing that
had been the cradle of the Chinese civilisation, a huge, once-rich agricultural
area now poorer than the coastal provinces.
We discussed the Cambodian issue and how we had to find an alternative to
the Khmer Rouge guerrillas who were doing the bulk of the fighting. Zhao
nodded, acknowledging that Pol Pot would be unacceptable to the world. I
conceded that unfortunately the Khmer Rouge was the best fighting force against
the Vietnamese. Zhao had just taken over as premier and lacked the confidence
to settle issues on Cambodia and Vietnam without referring to Deng. I found him
a reasonable, balanced and rounded man, not ideologically blinkered.
An advance copy of my dinner speech had been given to their protocol. They
wanted me to remove a passage critical of their policy towards the Communist
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