TNAG-1039-FCO40-1289-Future-of-Hong-Kong-1981 — Page 72

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was a fact. Therefore Li said, to sum up, Mao's contributions were positive and his mistakes were secondary. He asked if all those present had had the opportunity to read the document and Hu Yaobang's speech.

Returning to the original question asked, Vice Chairman Li recalled that Senator Hamer had raised the question of economic progress. Li recalled that he had just mentioned that China should never have had the Cultural Revolution which had caused the ten years of chaos in China. During that period (1966-76) science and technology in the world had continued to advance quickly but in China there had been none. If any progress in any field had occured during that period, it was in spite of, rather than because of, the Cultural Revolution.

Vice Chairman Li said that he had been responsible for the economy for much of that time and when in 1976 the Gang of Four had been removed he, together with other leaders, was too carried away by their victiory. Li said, "we did not recognise all the problems that China confronted at the time. The wages of workers should have been increased and the liveli- hood of the peasants improved." But he said they had ignored this and this was wrong. It was entirely correct to take as the key priority, increasing the livelihood of the people. Otherwise they would rise up in opposition to the Government. Vice Chairman Li said that Chinese standard of living was very low- much lower than that in Australia. It was a major problem facing the country, on the one hand how best to handle further capital investment in industry by the state and at the same time how best to improve the distribution of income amongst the people. An improved balance had to be struck between improvement of standard of living and increase in industrial production. Similarly, it was necessary to achieve an appropriate balance between light industry and heavy industry, while at the same time giving proper attention to heavy industry. Without heavy industry China could not build up its agriculture and light industry very quickly. But the problem in the past was that heavy industry was too much out of touch with other sectors of the economy. The basis of heavy industry, the iron and steel industry, could not be divorced from its relationship with light industry and agriculture. China also faced problems of energy. Although it had substantial goal, oil and water resources it took time to develop these sources of energy, In short therefore China was trying to give proper balance to the economy amongst all sectors. It would not be easy.

Vice Chairman Li said in the early years after the 1949 revolution China had too readily copied the Soviet model. had not been suitable for China and China was carrying out reforms

It and reconstruction of what was unsuitable for Chinese conditions. China was, moreover, now laying much more emphasis on agriculture because without this China could not feed and clothe ita people. Musing, Vice Chairman Li said he sometimes thought that if China had a population of "only 800 million" things would be much better!