TNAG-1479-FCO40-2011-Future-of-Hong-Kong-despatches-1986 — Page 28

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increase exports, and thereby

ate foreign exchange for

J

imported technology, looks likely to become an increasingly

important factor in China's overall rate of development.

the fall in

The problem is highlighted by the continued failure of

China's offshore oil fields to live up to earlier

oil prices and

expectations.

5. The impact of these problems is accentuated by other

undesirable by-products of current policies. The Ambassador

is right to point to the dangers of corruption and the

ideological vacuum. The recent student unrest may indicate

that material expectations are becoming unrealistically

high, particularly amongst the young.

Furthermore, although

Deng has put suitable successors in place, his personal

mantle will not fit them snugly. None has his authority

and therefore his scope to take risks; and in China good

government has always required a strong Emperor.

turn

6. I see no danger of a ref after Deng to virulent

ideological factionalism on the lines of the Cultural

Revolution; or even a major reversal of the reforms already

implemented. However, there is perhaps a possibility

that the current zeal and thrust of the reform process may

gradually dissipate in the face of economic problems coupled

with political jockeying for position. The Chinese have

already announced that no major new economic reforms will be

Measures carried out in 1986. This is sensible: last year's dangers

need time to consolidate; and all the time, the reformists

are accumulating valuable practical experience in the

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