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and Changsha on 22 April, in which policemen were attacked and The offical newsagency, Xinhua, vehicles and property burned. emphasised the different nature of these riots, which they said were started by "lawless elements". The huge demonstration in Peking on 22 April, on the occasion of Hu Yaobang's funeral, was conducted peaceably. It was on a much larger scale than previous demonstrations, with an estimated hundred thousand people assembling in and around Tiananmen Square.

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5. The Embassy's latest report (Telno.694) indicates that the situation in Peking has now largely returned to normal, although a

With the student boycott of classes may be getting underway.

the immediate cause for the funeral service for Hu Haobang over, demonstrations has been removed. But the 70th anniversary of the May 4th movement (a movement calling for democracy and modernisation sparked off by an anti-Japanese student demonstration in 1919) is likely to be a focal point for further demonstrations. The authorities were no doubt expecting a large gathering to mark this occasion, but the recent demonstrations will probably increase the numbers considerably.

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C 6. As Sir A Donald has indicated, the Chinese Government have

reacted to the demonstrations with considerable restraint. appears to be both a sign of confidence that it could cope and an But the indication that the demonstrations posed no real threat. authorities' real concern is not students' demands for democratic reform. Their real fear must be that these demonstrations may become a focal point for the expression of wider grievances felt by

In 1986, Hu Yaobang was sectors of society other than students.

But things were ousted after similar student demonstrations.

The situation now is generally going well for reform at that time.

Many people potentially more explosive. Reform is on the retreat. have experienced falling standards of living, which could lead to the widespread social unrest so dreaded by the authorities. Discontent cannot therefore be easily swept under the carpet.

7. There is no likelihood of the demands for political reform being met. The Chinese leadership has made it clear most recently in the last National People's Congress, that radical political reform would, in their view, be inappropriate for China. Within the leadership, these demonstrations are most likely to strengthen the

But for the moment hand of the conservative critics of reform. there is no direct evidence of the demonstrations threatening Zhao Ziyang's position. And the restrained handling of the incidents may indicate the continuation of a balanced approach within the leadership. But the demonstrations represent another strand of popular discontent with current policies. By giving evidence of the potential risks of liberalisation, the demonstrations will have

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