PS/PUS

CONFIDENTIAL

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RECEIVED IN BEGISTRY

28

From Thorold Masefield

Far Eastern Department

Date: 30 January 1987

0 311AR 1987

CHINA RECENT DEVELOPMENTS

است من

Сс

: Mr Gillmore

Sir D Wilson PUSD HKD

1.

You told me that the PUS would like to see some papers about recent developments in China. I recommend that he should look at the following:

A.

B.

C.

2.

JIC(87)(1A)2 and JIC(87)(IA)7 on the student demonstrations in December and Hu Yaobang's resignation on 16 January. (These are being forwarded separately by PUSD.)

Peking TelNos 109 and 173 on Hu's resignation and the aftermath.

Hong Kong TelNo 362 on Hong Kong reactions, and possible leadership changes.

We believe that the immediate cause of Hu Yaobang's enforced resignation was criticism from his colleagues in the leadership for failing to take a firm line over the student demonstrations in December. But Hu had been out of step with Deng Xiaoping personally over a number of issues for some time. He had been expected to make way for a younger man this autumn, and indeed he made no secret of this probability during his visit to the UK last summer. The demonstrations (and perhaps other recent, but unpublicized incidents) have accelerated the process, before a replacement has been decided upon.

3. Hu's enforced early departure has undoubtedly given conservative elements within the leadership an opportunity to recover some of their lost influence. But Deng had always been careful not to force the pace to the point of open confrontation, and the conservatives differ from the reformists not so much over economic reform as over the political reform which the liberal element, led by Hu Yaobang, saw as

saw as a necessary concomitant. Accordingly, although we expect some delays in both political and economic reform and considerable caution in its imple- mentation by lower level bureaucrats, we believe that the leadership still intend to pursue the previously agreed "open-door" policies, including those on Hong Kong

4. My own personal view is that there may be advantage in the succession to Deng and his elderly colleagues being sorted out now while he is still in charge.

J. T. Lase fit!

Thorold Masefield

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