Chapter 8 - The Case of China

Summary

If our experience can be used as a general guide to policy in other developing countries, the lesson is that the free enterprise system, correctly nurtured and adroitly handled, can serve as a powerful and versatile instrument of economic growth. One of the tragic illusions that many countries of the Third World entertain is the notion that politicians and civil servants can successfully perform entrepreneurial functions. It is curious that, in the face of overwhelming evidence to the contrary, the belief persists. And so in the name of socialism, equality and justice, millions are denied the escape from age-old poverty which rapid economic growth can provide.

— Goh Keng Swee (Preface to The Economics of Modernization, May 1972)

Goh's retirement from politics was announced on 19 August 1984, four months before general elections, and seven weeks short of his sixty-sixth birthday. A year later, he was decorated with the Order of Temasek (First Class), the country's highest award. He remained deputy chairman of the Monetary Authority of Singapore until 1992 and of the Government of Singapore Investment Corporation until 1994. He was also chairman of the Singapore Totalisator Board from 1988 to 1995.

China's strongman Deng Xiaoping had visited Singapore in 1978, and according to his host Lee Kuan Yew, he went home convinced that the island state was worth studying in light of the reforms that were about to be unleashed in China (Lee 2000: 668). Goh was made Economic Advisor to the State Council of the People's Republic of China on the Development of the Special Economic Zones and Advisor on Tourism in1985. His role in the latter position was to give advice, more on how tourism could earn foreign exchange for China, than on developing tourist sites (Phua 2008). His conviction that foreign exchange was central to the economy was already evident in his first book, The Economic Front, and was behind much of his thinking when Singapore's financial system was constructed. Also evident early in his life was his concern with China's needs, as mentioned in his short essay “My Ambitions” written when he was barely a teenager.

He also brushed up on his Mandarin in later years.