The Crossroads of 1978: China’s Search for a New Path

As 1978 drew to a close, China stood at a historic inflection point. The Third Plenum of the 11th Central Committee—soon to convene—would launch the Reform and Opening-Up policy, altering the nation’s trajectory. Behind this momentous shift lay Deng Xiaoping’s quiet but transformative observations during his November 1978 visit to Singapore. The city-state’s prosperity starkly contrasted with China’s economic stagnation, prompting Deng to reconsider fundamental assumptions about development models.

This encounter between two vastly different systems—one a disciplined city-state, the other a awakening giant—would ripple through history. Singapore’s success became both mirror and map for China: a reflection of what efficient governance could achieve, and a potential blueprint for modernization.

Deng’s Singapore Epiphany: “Our System Must Be Wrong”

On December 2, 1978, while revising his landmark speech for the Central Work Conference, Deng Xiaoping referenced Singapore’s housing policies to his colleagues. His notes revealed fascination with how Singaporeans earning 1,500 SGD monthly could purchase 70-square-meter apartments with just six months’ salary. This seemingly mundane detail symbolized broader revelations.

As scholar Ezra Vogel documented, Prime Minister Lee Kuan Yew recalled Deng’s astonished reaction: “If Singapore could achieve this, something must be wrong with China’s system.” The People’s Daily’s sudden focus on Singapore—seven in-depth reports covering housing, industry, and urban planning—signaled an intellectual pivot. Where other Asian nations received perfunctory coverage, Singapore was studied with intensity.

The Singapore Miracle: From Survival to Thrival

To understand why Singapore captivated Deng, we must revisit 1965. Newly independent, the island faced existential threats: severed from Malaysia’s hinterland, surrounded by skeptical neighbors, its traditional entrepôt trade collapsing. Lee Kuan Yew’s genius lay in recognizing that survival required reinventing Singapore as a “global city” before the concept existed.

Leveraging British colonial legacies—a deepwater port, English-speaking workforce, and legal system—Singapore became a manufacturing hub for multinational corporations. Between 1965-1973, GDP grew at 12.7% annually. By 1978, when Deng visited, Singapore had transformed from a resource-scarce island into Asia’s second-richest nation per capita.

Harvard’s Graham Allison labeled Lee a “fox-like” leader—pragmatic, adaptable, and ruthlessly focused on efficiency. Author Catherine Lim described his governance as “authoritarian, pragmatic, and unsentimental.” These traits enabled rapid decisions: mandating Central Provident Fund savings for homeownership, attracting petrochemical giants with tax incentives, and strict anti-corruption measures.

Policy Echoes: How Singapore Influenced China’s Reforms

Deng distilled Singapore’s lessons into actionable policies:
– Foreign Investment: In 1979, Deng declared, “Not utilizing foreign capital is a huge waste,” directly citing Singapore’s model.
– Social Management: His 1992 Southern Tour praised Singapore’s social order: “We should learn from their governance.”
– Housing: China’s later housing reforms echoed Singapore’s HDB system, albeit scaled differently.

The impact was immediate. In 1992 alone, 400 Chinese delegations descended on Singapore to study its systems. Special Economic Zones like Shenzhen consciously mirrored Singapore’s export-oriented industrialization.

The Uniqueness Paradox: Why Singapore Couldn’t Be Duplicated

During their 1978 meeting, Lee Kuan Yew humbly noted Singapore’s small size (2 million people). Deng replied wistfully: “If China had just one Shanghai, I could change it as quickly.” This exchange revealed a profound truth—Singapore’s success relied on unique conditions:
– Scale: City-state governance isn’t directly transferable to continental nations.
– Timing: Singapore caught the 1960s globalization wave precisely.
– Geopolitics: Its neutrality allowed balancing between powers—a luxury unavailable to China.

Yet, as Lee himself advised Vietnam in 1991, Singapore’s principles—meritocracy, anti-corruption, global connectivity—offered universal insights.

Legacy: Two Models, One Lesson

Today, Singapore’s fingerprints endure across China’s development:
– Economic Zones: From Suzhou Industrial Park to Tianjin Eco-City, Sino-Singapore collaborations test-bed policies.
– Governance: China’s emphasis on technocratic efficiency owes much to Singapore’s example.
– Globalization: Both nations embraced global trade while maintaining distinct political systems.

The deeper lesson transcends policy specifics. Deng’s Singapore moment epitomizes a leader’s willingness to learn from unexpected sources—a humility that propelled China’s rise. As ships dock every three minutes in Singapore’s port and planes land every 100 seconds at Changi Airport, this “impossible city” remains a testament to what focused governance can achieve. For China, it served as both inspiration and provocation: proof that development needn’t follow ideological orthodoxies.

In the end, the 1978 encounter wasn’t about copying Singapore, but about reimagining what China could become. That cognitive leap—from doubt to determination—changed history.