TNAG-1039-FCO40-1289-Future-of-Hong-Kong-1981 — Page 73

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Turning to Australia/China relations Vice Chairman Li said that the two countries shared identical views on many international questions although there was a difference on the question of Kampuchea. Vice Chairman Li was confident that trade would also develop in the future. He recalled his talk. with Prime Minister Fraser when he had told him in early 1980 that China would continue to require Australian wheat for many years to come. As for iron ore China would still need Australian iron ore even if the quantities which had originally been predicted were delayed a bit. When the Baoshan Iron and Steel Works came into full production there would be an increased requirement for Australian iron ore. Senator Hamer said that his delegation included members of both the Government and the Opposition parties. Although they differed on a number of questions there was one point on which both parties were genuinely united and that was on the importance of China and on the importance of improving the bilateral relationship between the two countries.

Senator Hamer said that other members of his delegation wished to raise a number of other questions. Mr Adermann said he had read with interest the resolution document and its references to agriculture, which included reference to methods of expanding and developing the agricultural base. He asked Vice Chairman Li what new methods were proposed. Vice Chairman Li said that China had mainly to rely on its own science and technology to develop its economy. But he said formally that China would not hesitate to introduce advanced foreign technology

elevant to agriculture in China. This was despite its overall policy of self reliance. Nr Adermann agreed that advanced science and technology was required and asked Vice Chairman Li what methods were proposed to increase yields of food crops. He mentioned chemical fertilisers and the improved use of them. Vice Chairman Li said that traditionally, use was made almost exclusively of natural fertilisers, but chemical fertiliser was now increasingly being used. He agreed that chemical fertiliser was important to increase yields. It was also important however to improve the soil and to build up irrigation projects. He said China faced many more problems than Australia which was fortunate with vast open spaces.

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Mr Innes observed that the resolution on historical questions which had been passed at the 6th Plenum had analysed the past. He wondered how China proposed to deal with the problems of the future, instancing in particular unemployment and inflation. Secondly, Mr Innes asked Vice Chairman Ld whether in the current situation where China had developed closer relations with the United States what policies it was adopting to prevent China's being inflicted with the same sorts of problems that the United States faced, and which other free enterprise countries faced. Summing up his questions, Mr Innes asked

a)

About Vice Chairman Li's views on how China would cope with unemployment and inflation, and

b)

What sort of policies would be adopted in order to handle the influences inevitably brought along with western capitalist dealings with China, in short how would China uphold its socialist policies?