SCR 1/46 SF 'A'V

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LIC HONG KONG

REPORT FOR JANUARY 1980

Mo Away's A-45

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CHINA AFFAIRS

Reform of the Cadre System

The Party cadres in Hong Kong continue to be preoccupied

by the effect locally of the proposals for the reform of the cadre system in China generally. An important feature of the reform would be the retirement of elderly members and a retirement scheme under discussion would,

for the first time, provide quite generous benefits. This would ease the

departure of many of those in the Party and State leadership in Hong Kong who have been unable to adapt to the new situation and result in a transformation

of the leadership at all levels over the next few years.

Communist Trade Unions

2.

The leaders of the communist trade unions in Hong Kong are

finding the dilemma in which the policy of the Central Committee has placed them increasingly uncomfortable. On the one hand, they are directed, in order to help maintain Hong Kong's economic usefulness to China,

not to rock the boat of good industrial relations. On the other, without some

show of militancy, the support of their members will become ever less enthusiastic. And to follow a middle course of conventional and conservative

trade unionism may lead to ideological accusations of participation in the capitalist system. Several communist unions have in fact recently run this risk by successfully negotiating moderate wage improvements for

textile and utilities workers in line with those granted to Government

employees.

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