TNAG-1621-FCO40-2235-Relations-between-Hong-Kong-and-China-1987 — Page 12

9. QIAO SAID THAT THE RESIGNATION OF HU HAD CAUSED ALMOST AS MUCH SURPRISE IN CHINA AS IT HAD ABROAD. OLDER MEMBER OF THE PARTY NOW UNDERSTOOD WHY IT HAD TAKEN PLACE, BUT MANY YOUNGER WEMBERS STILL DID NOT. A LONG CAMPAIGN OF EDUCATION WOULD THEREFORE BE NECESSARY.

10. ON POLICY, QIAO SAID THAT THERE WERE MANY CONCEPTUAL ISSUES

IN THE FIELDS OF POLITICAL AND ECONOMIC REFORM WHICH REMAINED TO BE

SETTLED. THE REFORM PROGRAMME WOULD CONTINUE IN BOTH THESE FIELDS.

BUT IT WOULD BE WRONG TO EXPECT ANY RADICAL INNOVATIONS NOW OR IN

THE IMMEDIATE FUTURE. WHEN THE LEADER OF THE YUGOSLAV TEAM SAID

THAT IT WOULD BE A TRAGEDY IF CHINA FAILED TO LEARN FROM YUGOSLAV

EXPERIENCE THAT ECONOMIC REFORM COULD NOT BE EFFECTIVE WITHOUT

POLITICAL REFORM - AND THOROUGHGOING POLITICAL REFORM AT THAT SAID THAT HE TOOK THE POINT. HE ADDED, HOWEVER, THAT **MATTERS WERE

NOW AT A VERY DELICATE STAGE''

·

J

2140

11. DRAGAN GAVE IT AS HIS OPINION THAT NO DECISION HAD YET REEN

TAKEN ABOUT WHO WOULD SUCCEED ZHAO AS PREMIER (HE TOOK IT FOR

GRANTED THAT ZHAO WOULD BECOME THE NEXT REGULAR GENERAL-SECRETARY). ZHAO HIMSELF HAD TOLD HAVASI IMMEDIATELY AFTER HU'S RESIGNATION THAT THERE WAS NO OBVIOUS CANDIDATE FOR THE PREMIERSHIP. DRAGAN THOUGHT

THAT LI PENG WAS A STRONG RUNNER. BUT HE ALSO THOUGHT THAT ZHAN

HIMSELF WOULD LIKE TO HAVE TIAN JIYUN AS PREMIER. THE TWO MEN WERE VERY CLOSE, PERSONALLY AND POLITICALLY., AND ZHAO, WHEN GENERAL- SECRETARY, WOULD WANT TO WORK WITH SOMEONE HE COULD GET ON WITH EASILY.

12. DRAGAN AND I AGREED ABOUT A NUMBER OF THINGS. THE FIRST WAS THAT IT HAD LOOKED AT THE TIME OF THE CHINESE NEW YEAR AS IF THE POLITBURO HAD AGREED ABOUT THE CONTENT, AND THE LIMITS IN TIME AND SPACE, OF THE CAMPAIGN AGAINST BOURGEOIS LIBERALISATION, BUT THAT THERE HAD BEEN QUITE A FEW SIGNS OF DISAGREEMENT SINCE THEN. THE SECOND WAS THAT THE POLITICAL SITUATION IN CHINA WAS LIKELY TO REMAIN UNSETTLED FOR SOME TIME TO COME, PERHAPS EVEN UNTIL THE PARTY CONGRESS. THE THIRD WAS THAT THE 13TH PARTY CONGRESS WOULD BE A GOOD DEAL MORE DIFFICULT TO PREPARE, AND MORE IMPORTANT IN ITSELF, THAN THE 12TH. HE AND I AGREED TO CONTINUE TO EXCHANGE VIEWS FROM TIME TO TIME. WE ALSO AGREED THAT WE WOULD TELL NONE OF OUR COLLEAGUES ABOUT WHAT WE HAD SAID TO ONE ANOTHER.

EVANS

PEHPAN 396

PLANNING STAFF

LIMITED

FED

HKD

PUSD

ECD (E)

ERD

TRED

DEF D

SOV D

PS

PS/LADY YOUNG PS/MR RENTON

PS/PUS

MR THOMAS MR GILLMORE SIR D WILSON MR MCCLAREN

EED NAD

CONFIDENTIAL

COPIES TO:

ASSESSMENT STAFF

CABINET OFFICE