CONFIDENTIAL
August the new Chinese Politbureau and its five-man standing committee looks workmanlike and appears to share a broad commitment to pragmatic policies of economic modernisation. Chairman Hua Kuo-feng may relinquish his post as Premier to Vice-Premier Teng Hsiao-p'ing at the forthcoming National People's Congress. The excessively ideological approach to internal political and social policies associated with Mao's later years is being thoroughly reappraised.
The speed of change and popular
hopes for relaxations and increased living standards could generate problems, as could the continuing campaign against associates of the disgraced "gang of four".
Sino-Soviet Dispute
6. Following Chairman Mao's death in September 1976, Soviet comment on China was deliberately restrained for
some months. However there was no reduction in Chinese
criticism of the USSR and since February Soviet commentary on China has been increasingly critical. A particularly bitter attack was published on September, following the Chinese Communist Party's 11th National Congress and President Tito's visit to Peking. It now looks as if the USSR has no expectation of being able to develop better relations with any group within the new Chinese leadership. For their part, the Chinese have emphasised the continuation of Mao's "revolutionary line in foreign policy" ie their interest in tactical accommodation with the United States and continued vigilance against the USSR, seen as the more dangerous of the superpowers. The Chinese have been particulary critical of Soviet policy in Africa. Détente is seen as a dangerous illusion
7.
There is no indication that China's underlying hostility to the USSR will change. Vice-Premier Teng Hsiao-p'ing was recently reported as saying that the
dispute was likely to last well into the 21st century. Limited improvements in inter-Governmental relations (eg trade) would nevertheless be consistent with maintaining differences of principle on territorial and ideological
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