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closer relations with developed countries to help carry
forward the modernisation programme, principally through
imports of advanced technology. Despite the lack of
diplomatic relations, trading links are being strengthened
with Singapore, Indonesia and South Korea - and even Taiwan.
In seeking the reunification of Taiwan with the mainland the
Chinese have become increasingly committed to using peaceful
means. There has been a gradual improvement in relations
with the Soviet Union, but the relationship is unlikely to
develop any real warmth unless the Soviet Union is prepared
to remove what China sees as the "three obstacles" to
Sino-Soviet relations: Soviet backing for the Vietnamese
occupation of Cambodia; the Soviet presence in Afghanistan;
and the reduction of troop levels along the Sino-Soviet and
the Sino-Mongolian borders.
5. There are signs that closer contacts with Japan and the
West have increased the material expectations of the Chinese
people and stimulated interest in Western concepts of
freedom, democracy and human rights. Internal political
life is no longer characterised by class struggle. But the
regime remains centralised and authoritarian and in January
1987 launched a campaign to counter support for a pluralist
political system or for the emergence of capitalism
(bourgeois liberalisation) on a significant scale.
6. China's modernisation policies are closely associated
with Deng Xiaoping, now aged 82. Deng has secured the
appointment of a Party Central Committee largely favourably
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CONFIDENTIAL