TNAG-1622-FCO40-2236-Relations-between-Hong-Kong-and-China-1987 — Page 13

CONFIDENTIA.

CONF

FV PEKING

AL

TO PRIORITY FOO

TELYO 947

OF 1301130 MAY 87

INFO PRIORITY OTI, HONG KONG, WASHINGTON, MOSCOW, TOKYO INFO PRIORITY UKDEL NATO, BTC HONG KONG

INFO SAVING SHANGHAI

CHINA: ECONOMIC

1.

WHICH AFTER THE POLITICAL EXCITEMENTS OF THE PAST FIVE MOUTH MANY HAVE LINKED WITH ECONOMIC POLICY AND THE PERFORMANCE OF THE CHINESE ECONOMY, YOU MAY FIND IT USEFUL TO HAVE MY VIEWS ABOUT THE

IN SUMMARY, THESE ARE THAT THERE HAVE BEEN STATE OF EACH OF THESE. NO CHANGES IN ECONOMIC STRATEGY, BUT THAT THE IMPLEMENTATION OF SOME

THAT THE POLICIES HAS BEEN SLOWED UP OF CHANGED AT THE MARGIN

EUT PERFORMANCE OF THE CHINESE ECONOMY HAS BEEN GOOD ON THE WHOLE,

ESPECIALLY IN RELATION TO THAT SOME DEEP CEATED PROBLEMS ROYAL INFLATION AND PRODUCTIVITY.

POLICY

3. 1987 IS THE SEX GOVERNMENT HAS SET TWO MAIN TASKS F

ON TO INCR

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* FIVE YEAR 10 YEAR OF THE

THE

THE YEAR: TO CONCNC- E REVENUE AND REDUCE

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EXPENDITURE AND COS (THIS HAS ECHOES OF THE PAST, AND STRENGTHEN THE PERFORMANCE BOTH OF THE ACRICULTURAL SECTOR AND

OTHER THE FIRST TASK, EASURES LARGE AND MEDIUM-SIZED ENTERPRISES.

HAVE BEEN ADOPTED TO CONTROL INVESTMENT IN FIXED ASSETS AND BASIC CONSTRUCTION (PARTICULARLY THROUGH THE USE OF FUNDS RAISED OR RETAINED BY ENTERPRISES), TO CURTAIL ADMINISTRATION AND OTHER CPERATING COSTS IN ENTERPRISES OF ALL KINDS, AND TO CHECK THE RECENT

OVER THE STEADY INCREASE IN 30TH PURCHASING POWER AND CONSUMPTION. SECOND TASK, MEASURES HAVE BEEN ADOPTED WHICH ARE DESIGNED TO PAISE THE QUALITY OF GOODS, TO PRODUCE GOODS WHICH AGE IN ACTUAL DEMAND, TO CUT BACK ON STOCK PILES AND TO IMPROVE MANAGEMENT.

3.

ACTION UNDER MOST POLICIES OF THE REFORM PODGRAMME OF COTASES 1984 (WHICH CONCERNS INDUSTRY, PRICES, MAGES AND ILNCNHS VRHOL AND BANKING SYSTENS) AS CONTINUED:

AX ENT

PISE

O HAVE TEEN TODOUCED, ES !

A. 11887.

MAIDENTIAL

RESPON