CONFIDENTIAL

FM PEKING

TO TELELETTER HONG KONG

TELELETTER 014/1

OF 040702Z JANUARY 89

CONFIDENTIAL

Andrew

Lee(5) - have

dove this?

be

I don't luni so

AND TO TELELETTER FCO, UKREP JLG HONG KONG

FROM

TELELETTER

is,

134506

MDTTAN 9096

Geom. I have a copy

сори already

HKB 020/6

Bv.

P. CLARK, PEKING

014/1 OF 04 JANUARY 1989

FOLLOWING FOR S.E BRADLEY Đ PA, HONG KONG

COPIED TO:

J

,

D. MARTIN, UKREP JLG, HONG KONG MRS. C. SMITH, F E D, F C O

POSITION OF ZHAO ZIYANG.

"

1 THANK YOU FOR YOUR TELELETTER OF 16 DECEMBER (NOT TO ALL). IT IS INTERESTING TO HEAR THE VIEWS OF WILLIE LAM NOW THAT HE SEES THE FALL OF ZHAO ZIYANG AS PENDING RATHER THAN IMPENDING. THERE ARE A COUPLE OF DIRECT POINTS IN YOUR TELELETTER WHICH I SHALL TRY TO ADDRESS AND THEN USE THIS TELELETTER TO BRIEFLY RESTATE THE EMBASSY POSITION ON THIS QUESTION.

2. YOUR PARA 2. AS FAR AS I KNOW, THE PARTY'S CENTRAL GROUP ON FINANCE AND ECONOMY HAS NOT BEEN CLOSED DOWN NOR A STATE COUNCIL

GROUP ON FINANCE AND ECONOMY ESTABLISHED UNER YAO YILIN. THERE ALREADY EXISTED A STATE COUNCIL LEADING GROUP ON FINANCE AND ECONOMY. IT WAS HEADED BY ZHAO ZIYANG WHILE HE WAS PREMIER. IT WOULD SEEM A NATURAL PROGRESSION FOR ZHAO TO HAND OVER THIS

POST ALONG WITH THE PREMIERSHIP BUT I DO NOT RECALL ANY HANDOVER BEING ANNOUNCED (RESEARCH DEPARTMENT MAY HAVE A RECORD). THE

TIMING OF ANY HANDOVER COULD BE SIGNIFICANT. NONE OF THE

INTERNALISTS FROM OTHER EMBASSIES WITH WHOM I HAVE SPOKEN HAVE

HEARD OF THE ABOLITION OF THE PARTY GROUP. THE FRENCH INTERNALIST

HERE HAS SINCE ASKED A ''SENIOR JOURNALIST' AND SONG TINGMING, A

SENIOR OFFICIAL IN THE ECONOMIC RESTRUCTURING COMMISSION ABOUT THIS.

THE FORMER SAID HE HAD NOT HEARD OF SUCH AN ORGANISATIONAL SWITCH

AND THE LATTER SAID IT DEFINITELY HAD NOT TAKEN PLACE. IF THE

SWITCH HAS TAKEN PLACE IN THE WAY THAT LAM DESCRIBED IT, IT MIGHT OF COURSE BE SIGNIFICANT, NOT ONLY FOR ZHAO PERSONALLY BUT ALSO FOR THE PARTY. (PRESUMABLY LAM DOES DRAW THE RATIONAL CONCLUSION FROM

HIS ARGUMENT THAT THE PARTY HAS ABDICATED FROM ECONOMIC POLICY

MAKING ?) THIS IS NOT A VERY SATISFACTORY ANSWER TO THE QUESTION

BUT THE WAY THINGS ARE IN PEKING IT IS IMPOSSIBLE TO CATEGORICALLY

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CONFIDENTIAL

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