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EN A SMALL NUMBER OF INDUSTRIAL MODERNISATINON PROJECTS. ALTHOUGH THIS PART HIS AT PRESENT SMALLY THE SCALE OF THIS COOPERAT MON COULD GROW SIGNIFICANTLY DURING THE NEXT FEW YEARS. BUT THE CHINESE ARE ALMOST CERTAIN TO CONTINUE TO DRAW A CLEAR DISTINCTION BETWEEN THE ECONOMIC AND THE POLITICAL RELATIONSHIPS.
WE
6. WE KNOW THAT THE CHINESE LEADERSHIP HAVE REVIEWED THEIR POLICY TOWARDS THE SOVIET UNION HIN THE LIGHT OF GORBACHEV'S SPEECH AT VLADIVOSTOK. THE QUESTIMON WAS DISCUSSED AT BENDANNE IN AUGUST. HAVE NO EVIDENCE TO SUGGEST THAT A SIGNIFICANT FACTION WISHES TO QUICKEN THE PROCESS OF IMPROWING RELATIONS OR TO RESPOND MO
0
POSHITIVELY TO RECENT SUGGESTIONS OF GREATER SOVIET FLEXIBILITY. SOME SUCH AS WICE-PREMIER LB PENG, MAY BE MORE PRO-SOVIET THAN OTHERS AS A RESULT IN UR'S CAE OF THE TIME HE SPENT AT UNIVERSITY IN THE SOVIET UNION, BUT HM CONVERSATION WITH VISITORS DENG XIAOPING AND LIH XRANNAN (WHO (IN OTHER RESPECTS IS A CONSERVATIVE) HAVE NOT CONCEALED THEIR DISTRUST OF THE PRESENT SOVIET LEADERS AND
THEIR AMBITIONS. HIT IS UNLIKELY THAT THERE WILL BE ANY SUBSTANTIPAL
CHANGE **N CHINESE POLICY WHILE DENG REMAINS CHINA'S TOP LEADER.
EVANS
YYYY
PEHPAN 4593
LIMITED
FED
SOV D
HILD
PUSD
RES D
PLANNING STAFF
PS
PS/MR RENTON Ps/pus
MR GILLMORE
MR
THOMAS
SIR D. WILSON
MR RATFORD.
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ASSESSMENT
TU:
STAFF, CABINET OFFICE
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