TNAG-0839-FCO40-1048-Relations-between-Hong-Kong-and-China-1979 — Page 112

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over-

him his influence. In the process Deng, who is responsible

for his return, may have come in for criticism for

ambitious and unrealistic planning. The current hard-nosed

attitude of the Chinese Government to imports may, at Least

in the short term, reduce the opportunities for British

exporters in China, but it has compensating advantages.

We have no interest in the Chinese Government over-extending

its foreign exchange commitments in a way which could lead

to problems of repayments to British exporters, or in over-

ambitious plans whose failure could cause serious recrim-

inations within the leadership and against Western expertise

leading possibly to a return to economic conservatism and

isolationism.

(b) Vietnam

Policy towards Vietnam must figure in this economic debate.

In the light of their experience during their recent

incursions, the Chinese defence forces will almost certainly

be bidding for a larger share of the national budget; and Deng has made clear that he believes the effective punishment of Vietnam takes precedence even over China's modernisation

programme. We have no evidence of serious rifts within the

Leadership on this question, but it would be surprising if

those more concerned with economic planning than long term

international political considerations did not have

reservations about the economic costs of Deng's policy.

(c) Reputation of Mao/Human Rights Policies towards the reputation of Mao and human rights are linked. In the first part of this year, public attacks on

Mao and Hua became increasingly strong and explicit

encouragement was given to an embryonic human rights movement whose principal target has been the repression and censorship associated with Mao, and by implication Premier Hua.

conversation with Mr Malcolm MacDonald last month, Deng

/emphasised

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