In 1978, despite China’s aspiration to achieve four modernizations – to modernize its agriculture, industry, defense, science and technology – the country lacked the necessary funds, technological know-how and expertise in management. In October of the same year, Deng Xiaoping was invited to pay an official goodwill visit to Japan. He spent a lot of time visiting modern enterprises and high-tech facilities in Japan, and met a large number of Japanese business leaders, senior economists, technicians and managers. “I came to Japan to learn from the Japanese people,” Deng said earnestly at a press conference. “And we believe that such an attitude, along with China’s policies and guidelines, will bring hope to China.” Deng’s outspoken and down-to-earth manners, openness and confidence impressed his Japanese hosts.
Matsushita Electric was an important stop in Deng’s visit. This is where the bond of friendship between Deng and Matsushita began. It was raining the day Deng visited the factory. Matsushita, already in her eighties and retired, waited at the front door to greet Deng and the Chinese delegation. He accompanied the group throughout the visit. According to Deng’s entourage recollection, Deng walked very slowly during the tour; he watched the production process very carefully, occasionally stopping to ask questions. When the staff showed him the operation of a microwave oven, a high-tech product at the time, he showed great interest. He took a dumpling from the microwave, took a bite and commented, “It’s good, the oven is very nice.” So and there, Matsushita saw in Deng an easy-going leader, a pragmatist who was ready to try new things, and he had even more respect for the Chinese Communist leader.
Deng Xiaoping shakes hands with Konosuke Matsushita, founder of Matsushita Electric, when Deng visits the company.
Deng has been frank in the following interviews. “China will embark on a modernization campaign. While relying mainly on itself, China plans to appeal to technology and foreign investment.” He then asked Matsushita, “Can you help us a bit in our modernization efforts?” Matsushita, moved by the Chinese leader’s sincerity and determination, responded with his Kansai accent: “I will do anything to help. A gentlemen’s agreement was thus concluded. Delighted to hear these words, Deng wrote on the factory’s guestbook, “Sino-Japanese friendship has a bright future.”
Deng writes the factory’s guest book “Sino-Japanese friendship has a bright future.”
The ocean is vast because it admits all the rivers. China, a nation that values modesty, believes there is always someone to learn from and welcomes the brightest minds in the world.
In June 1979, Matsushita came to China by invitation, making him the first renowned foreign entrepreneur to visit New China. Deng had a cordial meeting with him. Speaking of the development of the electronics industry, Deng said, “What is modernization? I think it means electronic industrialization. Without it, there is no actual modernization. China is a large country with a large population. up to its international responsibilities. We have to work hard ourselves, but we also need the help of others. We have to bring a lot of technology to help us improve ourselves, otherwise we will be lagging behind others in modernization. Matsushita admired Deng’s strong sense of responsibility, foresight and international outlook. He immediately pledged to help modernize China’s electronics industry and came up with a grand plan: Matsushita Electric would bring together Japanese electrical and electronics companies to jointly support China’s industrial reform. Deng warmly approved of this plan. With the gentlemen’s agreement in motion, the Chinese electronics industry was about to move to a new level.
Deng meets Matsushita during the latter’s first visit to China.
A promise is a promise. When Matsushita returned to Japan, he contacted other electronics heavyweights and gave media interviews to explain China’s reform and opening-up policies. He has written articles on how he was touched by the Chinese leaders’ enthusiasm for modernization, their modest and down-to-earth style, and their willingness to be flexible on specific issues. However, Japan had only been in diplomatic relations with China for a few years, and its electronics industry had little knowledge of China at that time. This, coupled with fierce competition among Japanese electronics companies themselves, made it difficult to coordinate any collective effort. Matsushita’s proposal did not garner much support.
In 1980, when Matsushita visited China again, he apologized to Deng himself. “It is normal that the plan did not work. The important thing is our friendship and our willingness to work together. China’s opening policy will remain unchanged,” Deng assured him. Impressed by Deng’s foresight, determination and commitment to China-Japan friendship, Matsushita said his company alone would engage in cooperation with China and lead by example by setting up a joint venture.
After overcoming many difficulties and thanks to the efforts of various parties, the gentlemen’s agreement has finally borne fruit. In 1987, Beijing Matsushita Color CRT Co., Ltd. was established, the largest Sino-Japanese joint venture at the time. The company generated profits in its first year of operation, which caused a stir in the Japanese business world. Appreciating China’s opening policies and huge market, more Japanese companies have followed suit. As reform and openness deepened, Matsushita Electric’s business in China grew alongside China’s economic growth, becoming a household name and trusted foreign brand in China.
Today, some 40 years later, this gentlemen’s agreement between Deng Xiaoping and Konosuke Matsushita still resonates in our minds. It is the epitome of Sino-Japanese friendship, an important impetus for China’s reform and opening up, and a testament to the modesty, pragmatism and pioneering spirit of the Chinese Communists. Today, Panasonic, which still has good cooperation with China, continues to write new chapters of Sino-Japanese friendship. In the future, China will open up more to the world, build international platforms, invite more foreign friends, and make more gentleman’s agreements.