REAFFIRMED HIS COMMITMENT TO REFORM OF THE POLITICAL SYSTEM (MY TELNO 484). THIS QUESTION WILL NOW BE ADDRESSED AT THE PARTY CONGRESS IN THE AUTUMN. ALTHOUGH IT MAY WELL TURN OUT TO BE A RATHER LESS SUBSTANTIAL PACKAGE THAN WAS ENVISAGE BY SOME BEFORE THE SIXTH PLENUM LAST YEAR, THE POLITICAL MESSAGE THAT THE REFORMERS ARE STRONG ENOUGH TO REOPEN DISCUSSION OF IT IS ENCOURAGING.
3. THE CURRENT SESSION OF THE NPC (WHICH OPENED ON 25 MARCH) HAS GONE REASONABLY WELL FOR THE REFORMERS. IT CAN BE POINTED TO AS A DEMONSTRAT NON THAT THE BUSINESS OF GOVERNMENT HAS BEEN GOING ON AS USUAL, LARGELY UNAFFECTED BY POLITICAL DEVELOPMENTS, SOME OF THE INNOVATIONS OF FORM, SUCH AS THE INTRODUCTION OF NUMEROUS PRESS CONFERENCES, ARGUE FOR AN INCREASED SELF-CONFIDENCE IN THE CHINESE LEADERSHIP, AND STRENGTHEN THE CAREFULLY CULTIVATED IMPRESSION OF UNITY AND STABILITY THAT THE CHINESE WISH TO DISPLAY. SIMILARLY REMARKS AND COMMENTS BY DEPUTIES, WHICH HAVE AT TIMES BEEN FAIRLY CRITICAL OF SOME ASPECTS OF GOVERNMENT POLICY, AGAIN SHOW THAT THE NPC IS FULFILLING A CHANGED ROLE AS A MEANS OF WIDENING THE CONSULTATIVE AND DECHSHION MAKING PROCESS.
4.
BUT THERE IS A DOWNSIDE. THE ECONOMY HAS NOT BEEN PERFORMING
THE PARTICULARLY WELL. FOUR MAIN AREAS NEED SPEC-HAL ATTENT:HON:
SCALE OF INVESTMENT CONTINUES TO BE UNAMENABLE TO CONTROL", ENTERPRISE EFFICIENCY REMAINS APPALLINGLY LOW (SUBSIDIES FOR LOSSES ARE BUDGETTED TO INCREASE BY 11.5 PER CENT THIS YEAR), WAGES OUTSTRIPPED THE GROWTH IN PRODUCTIVITY (IN 1986 THESE GREW BY 16 AND 4 PER CENT RESPECTINLEY) AND THE PRINCE SYSTEM REMAINS ''HIRRATIONAL''. THERE ARE ALSO OMINOUS SIGNS THAT THE ECONOMY MAY BE BEGINNING TO OVERHEAT AGAIN AS IT DID IN 1985. THESE PROBLEMS WOULD HAVE EXISTED EVEN WITHOUT THE RECENT POLITHICAL EVENTS. BUT
THE MAJOR THEIR SOLUTION HAS BEEN MADE MORE DIFFICULT AS A RESULT. ECONOMIC SPEECHES TO THE NPC (ZHAO'S OWN WANG BINGOHAN'S ON THE BUDGET AND SONG PING'S ON THE ECONOMIC PLAN) WERE ALL STRONG ON ANALYSIS AND GENERALISED REASSURANCES, BUT SHORT ON CONCRETE MEASURE FOR DEALING WITH THE PROBLEMS. CONSPICUOSLY ABSENT WERE ANY IDEAS FOR NEW REFORMS RATHER THAN DEVELOPMENTS OF EXISTING REFORM POLICIES. THERE WAS A DEFENSIVE AUR ABOUT THESE PRESENTATIONS. WAS PREFERRED FOR EXAMPLE TO INCREASE PRICE SUBSIDIES BY A MASSIVE 39 PER CENT FOR FEAR OF THE SOCIAL CONSEQUENCES OF PRICES RISES, OR MORE PARTICULARLY THE OPENINGS THESE COULD GIVE FOR POLITICAL EXPLORATION BY THE OPPONENTS OF REFORM. FURTHERMORE, THE RECENT DECISION TO CUT BACK SEVERLY ON SHARE ISSUES IS THE FIRST REAL EVIDENCE OF A REFORM DEA THAT HAS HAD TO BE SHELVED PROBABLY IN RESPONSE TO CONSERVATIVE PRESSURE.
INT
THE NUMBER OF
5. NOR HIS THE VOICE OF CONSERVATISM ENTIRELY SILENT. MAJOR DEOLOGICAL COMMENTARIES AND EDITORIALS HAS DROPPED OFF IN THE PRESS. BUT THE GENERAL TONE IS MORE CONSERVATIVE AND CONSERVATIVE LEADERS STILL AIR THEIR VIEWS QUITE FREELY. IN HIS PRESS CONFERENCE ON 8 APRIL PENG ZHEN, WAS CONSIDERABLY HARSHER MAN HIS CRITICISM OF
BESIDES A VERY HU YAOBANG THAN HAS BEEN FASHIONABLE RECENTLY.
HE
ORTHODOX DESCRIPTION OF THE GENERAL ORIENTATION OF THE PARTY, ALSO UNMISTAKEABLY STAKED OUT THE CLAIM FOR HIMSELF AND OTHER OLDER
·2-
CONFIDENTIAL
/LEADERS
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