Background

Situation In China

1.

Since the suppression of the student-led protest movement in June the leadership's efforts to enforce ideological orthodoxy have

been intensifying. According to public sources there have been

around 2,000 arrests related to the June events, along with 20

executions. The first expulsions from the party have taken place (of prominent dissidents) and there are signs that a widespread purge of party and government organisations is to be launched. clampdown seems particularly directed at the education sector.

The

Another power

2. Within the leadership there has been much speculation on the

possible imminent death of Deng Xiaoping.

While the rumours have

somewhat subsided they point to an element of instability within the

leadership in that there is now no obvious successor to Deng as the supreme leader in Chinese politics. None of the principal

candidates seem likely to command popular respect. struggle could follow his death. The leadership faces considerable economic problems, in particular inflation. The response has been an austerity drive, with a cutback in state investment. The Chinese

leaders consistently state that the economic reform policies, and

the opening to the outside world, are to continue. But it remains

very uncertain what this means in practice. There is certainly no

impetus for further reforms; and measures that have so far been

taken, eg recentralisation of economic decision making, indicate if

anything a move in the other direction.

EC Measures

3. An initial statement was made by the Twelve on 6 June deploring the Chinese authorities' action on 3/4 June. The Presidency made

demarches to the Chinese authorities on 15 and 17 June stressing

concern at the continuing repression and appealing for clemency in

respect of the first death sentences. On 27 June the European

Council in Madrid issued a declaration which reiterated the Twelve's

strong condemnation and their appeal to stop the executions: it

included a package of measures which largely matched those already taken by the United Kingdom. These included suspension of

ministerial and high level contacts, suspension of military

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