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CONFIDENTIAL
The Rt Hon Sir Geoffrey Howe QC MP
etc etc etc
Foreign and Commonwealth Office LONDON SW 1.
BRITISH EMBASSY,
PEKING.
8 September 1986
Sir
ECONOMIC REFORM IN CHINA
1. In my despatch of 21 February on Deng Xiaoping, I said
a certain amount about China's reform programme. But I did
not go into detail about a subject which deserves treatment
in its own right. It deserves such treatment because the
programme is unique, at any rate in scale, and because a
great deal will depend on its degree of success. This will
affect China's economic strength, and therefore weight in
the world during the 1990s and thereafter, and the extent
to which China becomes a model for development for other
developing and Communist countries.
2. I enclose a memorandum by Mr Roderic Wye, First Secretary,
on the reform programme. This document is the fruit of much
research and reflection.
Mr Wye comes to three principal
conclusions: that the gains which were easiest to achieve
have already been banked; that it has proved far more
difficult to reform industry than to reform agriculture; and
that, when difficulties arise, it is the reflex of the leader-
ship to fall back on the very methods which the reform programme
is designed to eliminate.
CONFIDENTIAL
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