On the eve of the liberation of China, to develop the economy, the Communist Party of China usually opened banks as a cover to establish a hidden financial front. In this financial front, there was a "popular economist" named Deng Kesheng. He was good at disassembling complex economic knowledge into popular short stories, so that workers and farmers could understand it easily. He also used his economic knowledge to increase financial income for the liberated areas, and helped the currency of the base area gain the upper hand over the Jinyuanquan (paper money issued by KMT in 1948) in the fierce "currency war" before liberation.

Deng’s photos always show his graciousness and never putting on airs as an economist. Although he was born into a wealthy merchant family and could have been engrossed in books with both ears shut to what went on outside, he chose to disperse his wealth and resolutely devoted himself to the anti-Japanese movement amid the national crisis. His life was a life of revolution.

Engaged in revolution since youth

How did a rich man embark on the revolutionary road step by step?

In 1911, Deng was born in a middle-class family in Changsha, Hunan. Being a youth at the height of the Chinese Revolution of 1925-1927, and growing up in Hunan, the birthplace of the revolution, Deng began to participate in the people's democratic revolution very early under the influence of Marxism.

In 1924, Deng was admitted to the High School of Business Affiliated to Hunan University. Accepting the New Three Principles of the People by Sun Yat-sen, he joined the KMT during the first cooperation between the KMT and the CPC. Soon, Chiang Kai-shek launched the April 12 Anti-Revolutionary Coup, killing more than 10,000 Communists, KMT leftists, workers and peasants. The bloody lesson made Deng see clearly the counter-revolutionary features of the KMT right wing, and angrily broke away from the KMT.

In the autumn of 1930, Deng dropped out of school to start a business with his father, which boomed. The September 18th Incident in the second year of running the business tortured Deng seriously. “The Chinese nation is facing a huge crisis. How can I be a small boss calmly?” After a fierce ideological struggle, he joined the fiery anti-Japanese movement, which changed his life.

He joined the Hunan Cultural Circle Anti-Japanese National Salvation Association and actively participated in the creation of progressive publications and newspapers. He was not only the main contributor and editor of these publications, but also the main funder.

Shortly after the outbreak of the Anti-Japanese War, Deng’s father passed away. As the only child in the family, he inherited his father’s paper business and ran the business together with his mother. Located in the urban area with convenient transportation, the paper shop gradually became a fixed base for holding secret meetings. The money earned from the shop was also continuously invested in the revolution. In 1938, recommended by Yang Runxiang and Feng Xiuzao, Deng joined the CPC. After that, he was engaged in revolutionary work under the leadership of the Party.

Later, Deng served as the general manager and editor of the Observation Daily, the official newspaper of the Hunan Provincial Party Committee of the Communist Party of China. He was one of the sponsors of the newspaper. With his economic theory, he opened an "Economics Lecture Column" for the newspaper supplement where he explained the daily economic scene and spread Marxist economic theory in plain words.

Later, the newspaper office moved to Shaoyang. Since it was an isolated location, the newspaper’s circulation became smaller and income fell a lot. The daily meal expenses for dozens of staff members, together with other expenses, were three to four hundred yuan, all paid for by Deng.

Old site of the Observation Daily office

In 1939, the newspaper office was closed by Chiang Kai-shek and the printing factory would be confiscated. Deng and others moved to Guilin in time to establish the Southwest Printing Factory and a publishing house. Xu Zhendong, a patriotic democracy activist who also participated in the anti-Japanese activities while running two bookstores in Guilin, described Deng's activities there in detail in his reminiscence article.

Xu Zhendong, a patriotic democracy activist

According to Xu Zhendong, at that time, there were many KMT secret agents who monitored patriotic and progressive people very strictly. However, his two bookstores were not very eye-catching and thus safer for readers, making them more popular as refuges. Deng gave him a lot of encouragement and support for operating the bookstores. Since the reprinting of revolutionary publications was a loss-making business, to make ends meet, Deng helped to sell ink.

Deng donated up to 50,000 yuan to the Party's newspapers, publications and other business activities.

President of liberated area bank

The Central Bank of China on the eve of the Chinese Civil War

In the winter of 1940, the situation in Guilin was tense. It was decided that Deng and Li Zhongrong form a party group and transfer to Shanghai. Then in May of the following year, the group transferred to the Liberated Area of Central Jiangsu.

After 1941, Deng was assigned to do financial work in the New Fourth Army. He successively served as the branch president, head office vice president, and president of the Central Bank of China. He used his economic theories to actively create wealth for the base area, becoming a “financial soldier” for the army.

Despite the extremely poor working conditions, Deng insisted on studying Marxist-Leninist works under an oil lamp. Even when transferring to avoid the enemy, he carried a shoulder pole with one end being a radio transmitter and a yellow cloth backpack carrying "Das Kapital" on the other.

Group photo of Deng Kesheng (first from left), his daughter, Xu Zhendong and Li Zhongrong. Source from "Shanghai Scene" Magazine

During the Anti-Japanese War, the tasks of the financial fronts of the base areas were arduous. In order to consolidate the credit of the base area's currency and combat the economic plunder of the enemy, Deng actively promoted the base area's monetary policy. Based on the principles of economics, he wrote editorials, compiled outlines, and described the nature of the base area’s currency. In his book "Currency Common Sense", he exposed the essence of the KMT fabi (paper currency issued by KMT in 1935) and the role of the base area currency in simple words and with detailed materials. He also personally opened training courses and trained a large number of cadres.

Regarding the settlement between different currencies of the Liberated Area and the KMT Controlled Area in civil business transactions, Deng worked to break the economic blockade of the enemy and aggressively undertake a KMT fabi exchange business that allowed for the purchase of a large amount of military supplies.

According to Xu Zhendong, it was under Deng’s recommendation that Chen Guodong and Xu Xuehan, then heads of the Finance Committee of the Central China Bureau of the CPC Central Committee, sought him for a cover to carry out economic work. After the two men arrived in Shanghai, they lived at Xu Zhendong's home and successively founded several companies, including Tinkle Bank, the hub of a financial front of the CPC on the eve of the liberation.

Tinkle Bank on the eve of the liberation of Shanghai

Deng and Xu Zhendong went to Gaoyou in Jiangsu Province together for a field investigation, and finally agreed to set up a bank for exchange in each place of Gaoyou, Yangzhou, Zhenjiang and Shanghai, with a total equity of about 800 taels of gold. Deng was in charge of the banks located in the liberated area.

Deng also creatively launched a mechanism similar to the current "foreign exchange rate" to timely and flexibly adjust the exchange rate between the base area currency and the fabi in KMT-controlled area. Deng arranged investigators in each county branch or office of the Central Bank of China to collect daily market prices in Shanghai, Wuxi and other places through contact with businessmen or by listening to the radio and then established the conversion ratio of the two currencies by integrating the market information gathered from everywhere. Finally, the currency of the base area maintained a strong value and business reputation, and successfully defeated the increasingly depreciated jinyinquan of the KMT Controlled Area in the fierce "currency war".

Theoretical front to spread economics in simple words

After the founding of the People’s Republic of China, Deng turned to the theoretical front in the fall of 1953. After that, he was committed to the popularization of Marxist economics. He authored "Autobiography of Commodities", "Uncovering the Mystery of Commodity Prices", "Secrets of Capitalists' Wealth", and "Productivity and Production Relations" among other articles.

Deng’s works

In most people's minds, economics is unpredictable, boring and difficult to understand. But in Deng's works, economics is easy to understand, with even workers and farmers being able to read it. When Deng was writing, he was not only good at using words familiar to the masses, but also tried his best to use popular examples as metaphors, and introduce topics from common phenomena in daily life.

In addition to doing theoretical research, Deng often went to do field investigations and guided China's economic construction.

During the Great Famine (1959-1961), Deng learned that rural productivity had been greatly damaged, so he and his comrades explored strategic measures to restore and develop rural productivity. He theoretically analyzed the feasibility and effects of implementing the household contracting policy in rural areas, and proposed that "household contracting is a change in the mode of operation, not a change in ownership." In the anti-"Right" atmosphere at the time, he boldly proposed that people should also guard against "Left". Later, the household contracting system (wherein individual farmers contracted what had been collective land and managed their allocation according to a government contract, keeping the majority of the operating income) commonly implemented in rural areas played a huge role in the development of the rural economy, proving that his views at the time were fully in line with China's national conditions.

“Deng Kesheng's Essays on Popular Economics"

Deng suffered many hardships in his life, but he always lived according to the standards of a communist--being frank, strictly self-disciplined and tolerant, and worked for the Party all his life. His works were collected as "Deng Kesheng's Essays on Popular Economics" in 1982, published by Shanghai People's Publishing House. Many of his economic viewpoints have been recognized and valued.

Story/ Xiong Fangyu & Kong Wenlong

Translation/ Zheng Qian