TNAG-1871-FCO40-2659-Relations-between-Hong-Kong-and-China-1989 — Page 107

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The Chinese leadership is well aware of the importance of this issue, which was raised not only by the international participants but by the Chinese themselves at every level. How far can economic liberalisation proceed within the present political arrangements? What political reforms can be implemented to encourage a dynamic economy while preserving the stability and unity of the country as a whole? These are fundamental issues which the Chinese are now deliberating as they embark on the next phase of modernisation.

V.

37.

Results and Follow-up.

According to the Chinese, the meeting has had an identifiable impact on policy on few important issues. Also, as the opinions and ideas expressed are analysed in the responsible departments, it is expected that there will be a longer-term impact of a broader, more strategic nature.

38. A number of more specific results have already emerged from the meeting: Chinese involvement in new international activities; cooperative ventures in the investment and commercial sectors; and, new cooperative efforts between organisations and between individuals. Finally, it is clear that those international personalities who attended the meeting have become better informed about China, and also, that a number of eminent Chinese have a better appreciation of issues and attitudes in the outside world.

39. It would be presumptuous to assess the impact of the meeting at the highest levels of policy. However, it is perhaps significant that the decision has been taken to continue this initiative in 1989 and 1990.

40. In May 1989, a small, private high-level meeting will be arranged on "The Reform of the Financial and Banking System in China." There will be about 12 international and fifteen Chinese participants.

41. The meeting will focus on three main topics: the modernisation of the banking system; the establishment of an effective system of share ownership and a market for stocks and bonds; and, policies and instruments for the management of the money supply, drawing on the experience of other countries.

kt.