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in the recent instruction, will probably allow communist commercial and

banking organisations more freedom to conduct their business expansion

programmes and here we can expect an intensified campaign to sell China

products following the Autumn Trade Fair now in progress in Canton.

22.

The "friendly hand and the smiling face" will become an even

greater feature of the united front campaign and social and business

approaches will be increased in many sections of the community. It is

probable that "patriotic nationalism" will be developed coincidental with

MAO Study, and will not only be found more palatable within communist

organisations, but will be used as a means of reaching and influencing the

uncommitted sections of the community. Any stress on nationalism is

likely to be increasingly effective, of course, if the Cultural Revolution

settles down sufficiently to permit a period of national reconstruction in

China.

23.

+

The strikers' continue to present the communist leadership with

one of its main problems, Here again it seems that economic expediency

is likely to prevail and the communist labour organisation has now been

forced to accept the repercussions of stopping strike pay in the near

future. The adverse effect on morale in communist unions generally is

likely to be widespread but in the long term this is capable of improvement,

although it will take the union leaders a long time to regain the complete

trust of their members. Attempts will continue and be intensified to

recruit employees in the essential services and other areas in which the

"general strike" of June, 1967, largely removed communist union

representation.

2.

A significant field will be education. As soon as the communists

have consolidated their present expansion of schools, we must expect

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