CTWAKB (4)
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had gone further than the Americans in some areas, in particular
economic cooperation (eg the suspension of concessional aid and
export credit guarantees for projects in China) in the measures
announced in the Madrid Declaration.
2. In China the leadership's attempts to enforce ideological
orthodoxy are intensifying. There have been around 2,000 arrests
related to the events of June and a number of executions (perhaps
20).
The first expulsions from the party (of leading dissidents)
have taken place and a widespread purge of Party and Government
organisations seems likely. The crackdown seems particularly
orientated at the education sector with a reduction in the number
of university places this year, closer vetting of students going
overseas, and various measures to step up ideological training of
students. In the leadership, interest has focused on the position
of Deng Xiaoping with strong rumours emerging at one stage of his
imminent death. The lack of an obvious successor to him is a
continuing source of instability within the leadership.
3. In these circumstances we can see no justification for a relaxation of our measures against China. The Political Committee meeting on 5/6 September confirmed that other EC partners shared
this view.
4. Within the United States there has been congressional pressure
for further sanctions against China. The House and Senate have
called for a wide-ranging review of US/China trade relations,
including Exim bank loans, China's MFN status and bilateral trade
agreements. This pressure may grow, particularly if tension rises
over the refuge being given in the US Embassy to the leading Chinese dissident, Fang Lizhi. The presence in the US of leading exile Chinese dissident groups actively campaigning against the Chinese
authorities is a source of further tension. For strategic reasons the US Administration is however concerned to avoid long term damage
to the West's overall relations with China and has so far resisted
further sanctions.
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