HKB 020/6
#3
CONFIDENTIAL
From: A N R Millington
Mil Miss Marson MAWODOWISH Mr Wore Wist why wo
Mr McLaren,
PS
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Far Eastern Department
Hi? (See (LD)/2+).
Date: 10 February 1989
cc: PS/Lord Glenarthur,
PS/PUS,
Mr Gillmore,
Mr Paul, HKD,
Research Department
ANNUAL REVIEW FOR CHINA 1988
1. I submit Sir Alan Donald's Annual Review of China
for 1988. Given the interest in Whitehall in China, we are arranging for the despatch to be printed and given a wide distribution. I have acknowledged receipt of the despatch.
2.
During 1988, the Chinese government made a belated effort to tackle the problem created by an overheating economy. But as Sir A Donald points out (para 4), there is a contradiction between direct control over economic decision making and the demands of economic efficiency. Stagflation is a real threat. The Financial Times reported on 9 February that China's industrial output fell by 11% in January. Yet there is no sign that inflation is falling.
CONFIDENTIAL
/3. Sir
22,