TNAG-1623-FCO40-2237-Relations-between-Hong-Kong-and-China-1987 — Page 88

Lg Xiaoping's Political Programme

10. Deng, who remains the most powerful man in the country (he is sometimes referred to in the press as "China's paramount leader"), occupies the centre, between the "nostalgic left" and the right of the young.

What does he stand for, during this period of preparation for the Thirteenth Congress? The recent publication of "Fundamental Issues in Present-Day China", containing the texts of 44 Statements he has made since December 1984, many of them quite recently, and of statements he has made to senior visitors since the turn of the year make it possible to obtain a fairly clear picture.

11. First, Deng stands for the continued pursuit of economic reform (or,

as he prefers to put it, reform of the economic structure). He does not want to go back on the reform of agriculture, under which farming households have been granted the right to use parcels of collectively-owned land for long periods of time up to 30 years - subject only to the obligation to contract to supply annually-fixed quantities of one or more crops to the state at prices determined by the state. He wants to give factory-managers the freedoms, which they already enjoy in theory, to do what they wish in relation to inputs, outputs, investment and employment, subject to the fulfilment of below-capacity output quotas. In a statement made to the Standing Committee of the Politburo on 28 June, 1986, he said: "our policy is to continue delegating powers to the lower levels: many localities, however, are divesting the lower levels of their powers, thus dampening the enthusiasm of enterprises". He wants to persist with the policy of opening to the outside world. He has recently said to several foreign visitors that China cannot hope to achieve its ambitious targets for development without this policy.

12.

Secondly, Deng stands for the introduction of political reform. In a statement made to the Chairman of the Komei Party of Japan on 3 September, 1986 (but published since the beginning of this year), he said: "the major problem is that the political structure does not meet the requirements of the economic structure: therefore, without reforming the political structure, it will be impossible to safeguard the fruits of the economic reform or to guarantee its continued

advance."

In speaking to the Japanese Prime Minister two months later, he set the goals of political reform. These were "to maintain vitality in the Party and the state" (always with a small "s" in China), "to overcome bureaucracy and raise work efficiency" and "to stimulate the enthusiasm of the grassroots". On the first of these goals, he said: "vitality is associated with the younger cadres". On the second, he said: "the main problem is the mixing of Party and

government

in many cases the Party takes over the government's work .

many Party and government organisations overlap: we should uphold the Party's leadership, a major characteristic of China, and not abandon it: but the Party should lead well: we raised this question a few years ago, but have still not formulated a clear idea about how to do it."

His programme might be summed up as the encouragement of youth, the withdrawal of the Party from management and the participation of the "grassroots" in decisions about activities of concern to them.

CONFIDENTIAL