PAYAFK

CHINESE PARTY CONGRESS

CONFIDENTIAL

1. Good Congress for reformers with clean sweep of older, Long

March generation.

2. Congress marked climax of Deng's career. Now stepping down

from all posts (except Chairman of Military Commission) but will

remain influential.

3.

Zhao confirmed as Party General Secretary. Li Peng, more

cautious reformer and technocrat, may soon be announced to succeed

him as Premier.

New leaders must now make more progress on economic reform,

especially price reform and labour market reform.

4.

CONFIDENTIAL

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