President Chandrika Bandaranaike Kumaratunga (CBK) was on a State visit to China. She was entertained at a State banquet by then President Jiang Zemin in the Great Hall of the People in Beijing. 

There was an interesting chatter at the head table because the Chinese President was a good English speaker. While conversing, they looked around the ceremonial table along which the accompanying senior Chinese and Sri Lankan officials were seated. 

Then Jiang Zemin spotted Nanda Godage – a senior executive of the Board of Investment (BOI) and confidante of Upali Wijewardene who managed our Free trade Zones (FTZs) like Katunayake and Biyagama – seated on the Sri Lankan side.

“I know Godage; he was my liaison officer when I visited your Biyagama FTZ to learn about export zones on orders from President Deng Xiaoping when I was a party official in Shanghai. I am happy to see him again here in Beijing,” the Chinese President told a flabbergasted CBK.

Jiang Zemin’s rise

Jiang Zemin succeeded Deng Xiaoping as President in 1989 after the Tiananmen Square massacre. Then only a politburo member from Shanghai, he was plucked out of his middle level position by Deng because Jiang represented a compromise between the hardliners who crushed the revolt and others like Chinese Communist Party (CCP) Secretary and Prime Minister Zhao Ziyang, who wanted a softer approach. 

Ziyang visited the students in the square and wanted to open a dialogue with them after apologising for his delay in reaching out to them. “I should have come earlier,” he said. For his pains, Deng sacked his Prime Minister and held him under house arrest till the end of his life. He was allowed to come out only once in a while to play his favourite game of golf. His coterie of ‘apparatchiks’ lost their jobs in a great purge and new Jiang Zemin supporters took their place. 

These loyalists – ‘the grey men’ – succeeded in entrenching themselves in power and their leader Hu Jintao was made President later. But Jiang still called the shots as the political head of the army. Jiang’s folksy management style was popular among the masses and he began the transformation of the Chinese economy. 

A few weeks ago at the Party Congress, Hu Jintao was publicly humiliated by Xi Jinping, thereby, among other signs, signalling the end of Jiang’s influence and his policy of open friendship with the capitalist West. 

The 96-year-old ex-President Jiang passed away a few weeks later, but was not given the usual high-profile funeral tailor-made for ‘in favour’ Chinese leaders.

Transition to social market capitalism

The transition from Mao’s ideologically-driven economic policies, which were a horrible failure, to ‘social market-led capitalism’ was started by Deng Xiaoping and was carried out successfully under Jiang’s leadership. 

That lesson has not been learnt by our leftist-minded politicians, especially of the Janatha Vimukthi Peramuna (JVP), Sri Lanka Freedom Party (SLFP), and Sri Lanka Podujana Peramuna (SLPP). The Peratugamis – or Frontline Socialist Party (FSP) – do not figure as they have distanced themselves from reality and have no viable economic policy except to mouth tired old Marxist rhetoric. 

The social market policy of the post-Deng Chinese leadership entailed emphasis on foreign investment and an export-oriented economy which used the unlimited manpower available in the country to offer cheap labour for industrial production and thereby become highly competitive in the globalised economy based on free trade. 

‘Rural idiocy’

The important social factor was that even with low urban wages and difficult living conditions, Chinese workers preferred the cities to their impoverished villages, which was characterised by what Marx called “rural idiocy”.

Chinese workers flooded the cities where new, large-scale industrial factories gave them a higher standard of life than the communalised villages, which under party bureaucrats continued to be unproductive.

Thanks to communist ideological tinkering by Mao and his acolytes who had fanciful and impractical views of economic development, the country remained poor. The result was the biggest famine in human history, when millions of Chinese peasants starved to death. These facts are apparently unknown to the JVP and independent groups led by Wimal Weerawansa and Vasudeva Nanayakkara.

Brave Chinese leaders like Chou En-lai, Deng, Chen Yi, and Peng Dehuai opposed Mao and paid the price of being vilified and tortured by the ‘Gang of Four’ who were Mao’s “Running Dogs”. But the modernisers prevailed with the help of the People’s Liberation Army (PLA) soon after Mao’s death and imprisoned the ‘Gang of Four’. They then adopted a new economic programme which brought the Chinese economy out of Marxist claptrap to be the rival of the mighty US economy. 

Today there is a global contest for supremacy between the US and its allies and China. The Chinese economy – though hit by Covid, the global economic downturn, and covert trade sanctions by Western powers – continues on a spectacular, though reduced, growth path.

Sri Lanka’s Left

Unfortunately, the hidebound Sri Lankan Left has not grasped the fundamentals of the Chinese economic growth model based on new technologies, foreign investment, and cheap labour. 

While Anura Kumara Dissanayake (AKD) is deservedly the most popular political leader as recent opinion polls show, his party, which includes primitives like Lal Kantha, has no comprehensive philosophy of economic growth.

Recently, we were treated to the ridiculous idea that our left-leaning expatriates, especially in equally economically besieged Western countries like Italy and France, would fuel growth with their remittances. The current onset of recession in southern European countries like Italy is bound to reduce, not increase, remittances.

Why would any foreign investor – of Sri Lankan origin or otherwise – invest in a JVP-led Sri Lanka run on crackpot economic theories which do not make use of our strategic location and comparative advantage?

They talk of “a national economy” – a siege economy – which drove its advocate Mrs. B permanently from effective political office and is now a joke when considering the growth strategies of countries like India and Vietnam. If the most extreme US capitalists were welcomed in China, how will they be treated should they want to invest in a JVP-led Sri Lanka? How will they react to the future global economic juggernaut – a business friendly capitalistic India? 

Recently there was a small shift in their approach to private universities proclaimed by Nalinda Jayatissa – a rare professional in their ranks – but the top leadership has been ominously silent on this subject since then. Is there a hidden Deng Xiaoping waiting to emerge in the JVP? Is there a JVP Jiang Zemin waiting in the wings to help such a new thinker?

Learn the lessons

Sri Lanka’s tragedy is that while Chinese leaders like Jiang Zemin could learn from our FTZs in Katunayake and Biyagama set up after 1977 by J.R. Jayewardene and R. Premadasa on their path to an unprecedented economic growth which is challenging the US, our small-minded and unworldly leftists are still talking of Marxist dreams of long ago, which have been trashed by history. They, like Weerawansa, see conspiracies under every bed. 

If the JVP cannot learn the lessons of Vietnam and China and present a modern economic programme, they will remain leaders who are undoubtedly honest and well-intentioned but totally spaced out from global realities. Unless they change, the JVP can only take our country into an outdated ideology-based experiment similar to the experiments of underdeveloped Cambodia of the Khmer Rouge, Cuba, and Venezuela, which have made those countries poor backwaters in the modern world. 

China has shown the need for flexibility to meet current needs. As the Economist summed up the Jiang adventure: “[Xi’s] political world has no room for elders such as Jiang carping from the wings.”