G.F. 326
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- 9.
25.
26.
27.
PA said that price reform underpinned the whole economic
reform programme. For example, the bankruptcy law made
little sense without price reform. He wondered whether
there would be bold steps or tinkering with the system.
DS(ES)2 agreed that price reform needed to move ahead with
other reforms (e.g. of the enterprise system and the legal
system). In view of the complexity of price reform, he
felt that the Chinese Government was unlikely to take bold
steps but to continue chipping away at the system. This
would inevitably leave the most difficult areas to be
tackled later. He agreed with PA that this approach might
cause further distortions, although, given the rigidity
of the system in the first place, some changes would
probably provide net gains.
SDA asked about China's prospects for becoming a developed
country. DS(ES)2 said that, given the size of the
country and its low economic base, China was unlikely to
become a middle-income country by the turn of the
century. STI said that when China was accepted into the
GATT, that would be a sign of the success of price
reforms. However, there was a long road ahead.
The paper would be copied to the FCO, Peking and the
British Trade Commission.
Action:
Secretary
TRANSPORT BRANCH AND DEPARTMENT VISIT TO GUANGDONG (Paper 12/87)
28.
DC for T introduced the paper. He noted that the visit
had had limited objectives, principally to make personal
contacts and establish ties, and to seek further
information on Guangdong's plans for transport
development. It was not easy to understand the Chinese
bureaucracy, nor to know where the decision making powers
lay, nor who had budgetary authority.
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