CONFIDENTIAL

DSR 11C

Deng Xiaoping was the second most prominent official,

after the late Liu Shaoqi, to be dismissed in the Cultural

Revolution. He was rehabilitated in 1973 and reinstated as

a Vice-Premier.

Thereafter as the health of the Premier,

Zhou Enlai, declined Deng gradually took over from him and by

1975 was in charge of the day to day work of the government,

Chief of the General Staff and a Vice-Chairman of the Party.

However, following Zhou's death in January 1976, he was

passed over for the office of Premier and was subsequently

dismissed from all his posts as a result of manoeuvres by

the "Gang of Four". After the "Gang's" arrest in October

1976 and against opposition from the remaining "leftists"

in the Politburo he was restored to all his posts in July

1977.

Since his return to power Deng has worked steadily to

undermine the influence of his opponents and to strengthen

his own position and that of his supporters. He has himself

preferred to remain somewhat in the background leaving the

day to day running of affairs to his proteges Hu Yaobang and

Zhao Ziyang, and thus to enable them to acquire greater

national and international authority in their own right.

He is nonetheless without question the single most regarded

figure in China. He is the driving force and inspiration

behind most of the leadership's present policies and would be

consulted on all major decisions.

Visitors from Hong Kong whom he has met in recent years

include the Governor, Sir Murray MacLehose, in March 1979,

Sir Y K Pao (on several occasions in 1979 and 1981 and 1982); Louis Cha Leung Yung, Chairman of Ming Pao, in 1981; and Dr R Huang, Vice-Chancellor of Hong Kong University, in 1982.

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