For Information
CONFIDENTIAL
on 17 January 1989
Blue Vol XXXIV (19)
XCX (89)4 Copy No
MEMORANDUM FOR EXECUTIVE COUNCIL
SITUATION IN CHINA AND TAIWAN
2.8....
The New Year Message
Zhao Ziyang's speech at a New Year tea Party held by the Chinese People's Political Consultative Conference, Li Peng's to the State Council Plenary Session on 30 December and the People's Daily New Year editorial show the leadership's main aims for major policies in 1989.
2
Zhao admitted in his speech that reform was not plain sailing. Mistakes and set backs were
were unavoidable but it would be wrong because of these to doubt reform, the open door policy or socialism. He said inflation was the most serious problem facing China but the Government would not strive for economic growth at the cost of high inflation. Zhao also called for progress on political reform. Unless work was carried out on improving the NPC system, multi-party cooperation under CPPCC leadership and democratic
consult at ion, the cause of democracy would not be furthered.
3
Li Peng, in a more detailed speech, stressed that the current rectification policy was not at odds with
He outlined the tasks for 1989 as being:
reform.
(a)
(b)
(c)
(a)
(e)
(£)
to reduce the growth rate
to give high priority to the development of agriculture (by increasing invest ment and improving technology)
to emphasise efficiency as part of enterprise reform (efficient enterprises being given priority in receiving funds and raw materials)
to continue the coastal development strategy (exports encouraged, imports controlled)
on t ax
to examine ways of increasing revenue from enterprises (too many having been granted tax exemptions)
to reduce the rate of inflation and improve the supply of goods to the market
CONFIDENTIAL
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