TNAG-1879-FCO40-2670-Student-demonstrations-and-internal-political-situation-in-C-1989 — Page 164

CONFIDENTIAL

Western co-operation with China will be under strain as a consequence of recent events. There is also a risk of increasing Sino-Western friction because of human rights issues, as already demonstrated by the Fang Lizhi affair. particular factor to watch will be Soviet attempts to exploit the difficulties in relation to Sino-Western relations.

Longer-term Prospects

10.

A

The new leading group is heavily dependent on the army and on the remaining veteran revolutionary leaders. Below the top leadership and strongly represented in the Central Committee of the Party are numerous reform-minded figures. Much will depend on the scale of the purge likely to be conducted against these. When the veterans fade from the scene, the most likely scenarios are:-

a)

b)

c)

a leadership dominated by the military, probably disciplinarian, with a cautious attitude to reform and relations with the West;

a resurgence of reform-minded leaders, perhaps aided by some compromise figures (eg Zhu Rongii, Mayor of Shanghai, who handled the recent disorder in his own area particularly adroitly);

some kind of compromise between the two groups described

above.

Mafalken

Kenneth C Walker

Asian Region

TH2AAW

CONFIDENTIAL

Research Department OAB 2/125

210-6220