TNAG-1872-FCO40-2660-Relations-between-Hong-Kong-and-China-1989 — Page 133

CONFIDENTIAL

HKB 020/6.

(48)

146761

MDHIAN 0539

TO

CONFIDENTIAL

FM PEKING

IMMEDIATE FCO

TELNO 622

OF 130927Z APRIL 89

TOP COPY Q DIST ?

GW13/iv

INFO IMMEDIATE HONG KONG

46

HONG KONG TELNO 60.

HONG KONG PRESS REPORT ABOUT POSSIBLE LEADERSHIP CHANGES IN PEKING.

1.

I HEARD RECENTLY FROM A RELIABLE CHINESE SOURCE THAT THERE IS

MUCH SPECULATION AT PRESENT IN SENIOR PARTY CIRCLES ABOUT THE TRANSFER OF POWER WHEN DENG XIAOPING RETIRES. THE SPECULATION CENTRES ON THE RELATIVE CHANCES OF ZHAO ZIYANG AND LI PENG ACQUIRING THE LEADING POSITION. CLEARLY JOURNALISTS, INCLUDING WILLY WO-LAP LAM, THE AUTHOR OF THE SOUTH CHINA MORNING POST'S ARTICLE, HAVE PLUGGED INTO THIS INNER PARTY GOSSIP. WITHOUT KNOWING WHAT LAM'S SOURCE IS, IT IS DIFFICULT TO KNOW WHICH SPECULATIVE SCENARIO HE HAS BEEN GIVEN.

2. I BELIEVE IT IS TRUE THAT FORMER SENIOR LEADERS LIKE CHEN YUN

AND LI XIAN-NIAN HAVE BEEN GRUMBLING AT DENG FOR THE LACK OF

DISCIPLINE AND THE EVILS OF CORRUPTION AND THE RISING CRIME RATE

CAUSED BY THE EARLIER MORE LIBERAL ECONOMIC POLICIES. THESE ELDERLY LEADERS ARE ASSUMED TO BE MORE ATTRACTED TO LI PENG AND

YAO YI LIN WHO TAKE A CONSERVATIVE VIEW OF THE PACE AT WHICH REFORM MUST BE CARRIED OUT. ON THE OTHER HAND, ZHAO HAS CONSIDERABLE PRESTIGE WITHIN THE PARTY AND THE COUNTRY AND AT

LEAST ONE STAUNCH ALLY IN THE STANDING COMMITTEE OF THE POLITICAL BUREAU IN HU QI-LI.

3. WE HAVE NOT HEARD ANY RUMOURS TO SUBSTANTIATE LAM'S STORY ABOUT THE FUTURE OF YAO YI-LIN, BUT THE TRACK RECORD OF THOSE CLAIMING THAT ZHAO IS ABOUT TO LOSE HIS JOB UNDER PRESSURE IS NOT GOOD. THIS STORY DOES DIFFER FROM THOSE DOING THE ROUNDS LAST YEAR IN A NUMBER OF RESPECTS. IT DOES NOT GO SO FAR AS TO CLAIM THAT ZHAO WILL BE SACKED OUT OF HAND AND IT ALSO COMES AT

A TIME OF GENUINE POLITICAL UNCERTAINTY. THE POSTPONEMENT OF THE CENTRAL COMMITTEE PLENUM, WHICH MAY NOT NOW MEET UNTIL AFTER THE GORBACHEV VISIT AND COULD PROVE TO BE A WATERSHED, ALSO LENDS GREATER PLAUSIBILITY TO IDEAS OF A LEADERSHIP RESHUFFLE.

1

PAGE CONFIDENTIAL