CONFIDENTIAL
the traditional heavy industries.
In this case it seems to be
building construction above all which has inflated the heavy
industry figures
-
much of this has been for non-productive
purposes, especially housing. This is less of a threat to the
reformists than would be posed by a deliberate shift of resources
back into the creation of additional productive capacity in
heavy industry.
14. The reports make it clear that organisational reforms will
This is the essential reformist plank. But they are
continue.
to be kept under control, or so it is hoped. While some will
see a return to more centralised control as a move back from
reform this is not necessarily so: in a number of instances the
aim is to push reform harder.
15. The industrial growth target for 1983 looks unrealistically
low, given the figures so far published. If it is greatly
exceeded it seems possible that further draconian measures
of control will have to be taken which could then damage the
reformist policy, reaffirmed by Zhao, of giving a degree of
initiative to enterprises. At present however the greater danger
is seen to be too much unauthorised expansion, diverting scarce
resources away from key projects which are really essential for
the future growth of the economy, and also from light industry.
CONFIDENTIAL
/c) Agriculture