CONFIDENTIAL
(a) We are likely to see Teng increasingly dominant.
Only two or three of the twenty-nine province-level administrations are not now controlled by his supporters. There are reports that five of his men are likely to be elected to the Folitburo. The power base of his opponents in the Folitburo has been either destroyed or diminished. Hua's freedom of operation has been circunscribed.
(b)
(c)
Modernisation will go ahead at full speed, with a readiness to take risks and adopt unorthodox economic policies. Economic enterprises in all sectors will enjoy more power to decide their own policies. China will make good progress towards her modernisation goals, but in the meantime the outside world will als have moved, so that a considerable gap will remain.
In pursuit of modernisation there will be a greater freedom of discussion and criticism and an attempt to create a more respectable legal framework for the country. There will be elections for leaders in places of work. But "the rule of law", always an ambiguous phrase, will have a specially limited meaning in China. Nor will there be democracy or free speech in the full Western sense. This will remain a tightly controlled society with the Party in control. Teng is not a man to allow much real dissent.
CONFIDENTIAL
/(a) .
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