CONFIDENTIAL
4.
The despatch also points to low capital productivity
and low allocative efficiency as difficulties. It is not
clear whether these might not in fact simply be
indicators which highlight the potential for further improvement. Nevertheless I agree with the general lines of the despatch's analysis of the technical difficulties facing China's economic reform programme. But it perhaps underestimates the political difficulties that may still
stymie the programme. The memorandum refers to the time
and effort needed to counter criticism and maintain
forward momentum. These are very real constraints on the
reformers, and show up something of the nature of the political dialogue within China.
5. Sir Richard Evans stands by his earlier judgement (in
February) that the existing reform programine was likely
to remain unchanged in its essentials during the period
leading up to and following Deng's death. I am inclined
to put more weight on the temporary loss of impetus which
could follow Deng's departure.
6.
By this minute, I am asking Economic Advisers and
Research Department for comments so we can submit a
considered departmental view to the Secretary of State before his departure for Peking. We will then reply to Sir Richard. The Department is arranging to print the despatch as a diplomatic document, but Protocol
Department may wish to pass an advance copy now to the
Palace.
Iain c. m
ناشد
CONFIDENTIAL
I C Orr
Far Eastern Department
K 258
233 5863