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increase exports, and thereby
ate foreign exchange for
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imported technology, looks likely to become an increasingly
important factor in China's overall rate of development.
the fall in
The problem is highlighted by the continued failure of
China's offshore oil fields to live up to earlier
oil prices and
expectations.
5. The impact of these problems is accentuated by other
undesirable by-products of current policies. The Ambassador
is right to point to the dangers of corruption and the
ideological vacuum. The recent student unrest may indicate
that material expectations are becoming unrealistically
high, particularly amongst the young.
Furthermore, although
Deng has put suitable successors in place, his personal
mantle will not fit them snugly. None has his authority
and therefore his scope to take risks; and in China good
government has always required a strong Emperor.
turn
6. I see no danger of a ref after Deng to virulent
ideological factionalism on the lines of the Cultural
Revolution; or even a major reversal of the reforms already
implemented. However, there is perhaps a possibility
that the current zeal and thrust of the reform process may
gradually dissipate in the face of economic problems coupled
with political jockeying for position. The Chinese have
already announced that no major new economic reforms will be
Measures carried out in 1986. This is sensible: last year's dangers
need time to consolidate; and all the time, the reformists
are accumulating valuable practical experience in the
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