CONFIDENTIAL
CRS 660
NFIDENTIAL
PM PEKING 0587362 FEB 79
TO PRIORITY FCO
TELNO 153 OF 5 FEB
}
HKK020/1
PA
No J9/2
г
A:P. 51
RFI HHHHHONG KONG, MOSCOW, TOKYO, WASHINGTON, MODUR
INFO SAVING KUALA LUMPUR, NEW DELHI, RANGOON, SINGAPORE, ULAN BATOR
CHIN: CONTROLLED LIBERALISATION
IN THE PAST TEN DAYS THE CHINESE LEADERSHIP HAS TAKEN MEASURES WHICH CONTINUE THE TREND OF CONTROLLED LIBERALISATION.
2. ON 25 JANUARY DECISIONS TO IMPROVE THE TREATMENT OF CHINA'S FORMER CAPITALISS AND THEIR CHILDREN WERE ANNOUNCED. THESE INCLUDE THE RETURN OF 'HUGE'' BANK DEPOSITS AND PRIVATE PROPERTY CONFISC- ATED FROM THEM DURING THE CULTURAL REVOLUTION, THEIR RE-EMPLOYMENT IN FIELDS FOR WHICH THEY ARE QUALIFIED AND THE PROTECTION OF THEIR CHILDREN FROM POLITICAL OR PROFESSIONAL DISCRIMINATION, THE JUST-- IFICATION GIVEN WAS THAT CHINA NEEDS THE TALENTS OF THESE PEOPLE FOR MODERNISATION. BUT MANY OF CHINA'S FORMER CAPITALISTS ARE NOW AGEING AND THEIR TALENTS HAVE RUSTED. IT IS THEREFORE MORE LIKELY THAT THE MEASURES ARE PRINCIPALLY DESIGNED TO ATTRACT · THE SKILLS AND CAPITAL OF OVERSEAS CHINESE AND TAIWANESE. THE PARTICIPATION OF CHINESE CAPITALISTS IN JOINT UNDERTAKINGST? HAS BEEN SUGGESTED, AS HAS THE ESTABLISHMENT OF CREDIT AND INVEST- MENT COMPANIES TO CHANNEL THE CAPITALISTS' FUNDS INTO HIGH PRIORITY PROJECTS, DENG HAS SPOKEN (TIME, 5 FEBRUARY) OF CHINA'S NEED TO **OBTAIN CAPITAL FROM THE DEVELOPED COUNTRIES''. WE DO NOT THEREFORE EXCLUDE A REVERSION TO THE OFFICIAL PARTY POLICY OF 1949→→ 1951 OF ENCOURAGING EXPANSION OF THE ROLE OF PRIVATE CAPITAL UNDER PARTY GUIDANCE, INCLUDING JOINT STATE/PRIVATE ENTERPRISES, WHICH WERE SUPPRESSED AT THE TIME OF THE CULTURAL REVOLUTION,
3. ON 29 JANUARY CAME AN ANNOUNCEMENT OF A POLICY OF RESTORING CITIZENS' RIGHTS TO REMOULDED LANDLORDS, RICH PEASANTS, COUNTER- REVOLUTIONARIES AND BAD ELEMENTS''., SINCE THE COMPLETION OF LAND REFORM AND RURAL COLLECTIVISATION IN THE 1950'S, THE VAST MAJORITY OF THESE HAVE BEEN TREATED AS NON-PEOPLE. THE NEW POLICY WILL THUS CORRECT A MAJOR SHORTCOMING IN CHINA'S HUMAN RIGHTS RECORD.
CONDIDENTIAL
14.