TNAG-2504-FCO40-3643-National-People-s-Congress-and-Chinese-People-s-Political-Co-1992 — Page 8

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044706

MDLIAN 6002

BRAIN DRAIN HAD EASED AND THERE HAD BEEN A DECLINE IN LOCAL EMPLOYERS: EFFORTS TO RECRUIT STAFF OVERSEAS.

BRITISH NATIONALITY

9. SECRETARY FOR SECURITY ALISTAIR ASPREY TOLD LEGCO (26.3) THAT A TOTAL OF 12,078 HK RESIDENTS HAD BEEN REGISTERED AS BRITISH CITIZENS UNDER THE BRITISH NATIONALITY SCHEME. THE UNUSED QUOTA WOULD BE RESERVED FOR THE SECOND PHASE OF THE SCHEME.

LORD MACLEHOSE

10. SCMP QUOTED LORD MACLEHOSE AS SAYING THAT THE LEGISLATORS ASSOCIATED WITH GROUPS SEEKING TO OVERTHROW THE GOVERNMENT OF CHINA INEVITABLY REDUCED THEIR OWN USEFULNESS. THE ECONOMIC JOURNAL QUOTED LORD MACLEHOSE AS SAYING THAT THE NEW GOVERNOR SHOULD BE ACCEPTED BY HK, BRITAIN AND CHINA AND IT WAS NOT IMPORTANT WHETHER HE WAS A POLITICIAN OR A DIPLOMAT. HE DID NOT BELIEVE THAT THE PRESENT LEGCO, WHICH INCLUDED DIRECTLY ELECTED MEMBERS, WOULD UNDERMINE THE ADMINISTRATION OF THE GOVERNMENT.

WILSON

YYYY

ΜΑΙΝ

56

DISTRIBUTION

56

.HONG KONG AGREEMENT

.(RESTRICTED)

HKD

PUSD

FED//HD

LEGAL ADVISERS//MS BARRETT

.AND MS BROOKS

NEWS D PLANNERS

RAD

PS/LORD CAITHNESS

PS/MR LENNOX-BOYD

SIR J COLES

MR BURNS

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HKC 024/1

057047 MDLIAN 6910

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FM PEKING

TO PRIORITY F C o

TELNO 498

OF 060917Z APRIL 92

см

INFO PRIORITY HONG KONG, B T C HONG KONG, UKREP JLG HONG KONG INFO PRIORITY JSIS HONG KONG, MODUK, ACTOR, WASHINGTON, CANBERRA INFO PRIORITY TOKYO, SEOUL

SIC U2B

NATIONAL PEOPLE'S CONGRESS: CLOSING SESSION AND IMPLICATIONS

SUMMARY

1 LI PENG'S WORK REPORT APPROVED COMFORTABLY, BUT ONLY AFTER SIGNIFICANT AMENDMENT TO INCLUDE CRITICISM OF LEFTISM.

CONSIDERABLE OPPOSITION TO 3 GORGES PROJECT. LI'S POSITION FURTHER

DENG XIAOPING MAY NOT BE ABLE TO WAIT FOR THE PARTY CONGRESS THIS YEAR AND NEXT YEAR'S NPC TO OUST LI. POSSIBLE

CANDIDATES FOR THE PREMIERSHIP. WHAT THIS MEANS FOR REFORM IN PRACTICE. DANGER THAT POLITICALLY-MOTIVATED ECONOMIC POLICIES MAY

INITIATE ANOTHER CYCLE OF OVERHEATING.

DETAIL

2.

THIS YEAR'S ANNUAL MEETING OF THE NATIONAL PEOPLE'S CONGRESS

CLOSED ON THE AFTERNOON OF 3 APRIL. THE CLOSING SESSION WAS TAKEN UP ENTIRELY WITH VOTING ON THE VARIOUS LAWS AND WORK REPORTS, AS AMENDED ACCORDING TO PROPOSALS MADE BY THE DEPUTIES. ALL WERE DULY PASSED WITH VARYING NUMBERS OF DEPUTIES VOTING AGAINST OR ABSTAINING. LI PENG'S GOVERNMENT WORK REPORT WAS APPROVED WITHOUT CONTROVERSY. (10 DEPUTIES VOTED AGAINST AND 27 ABSTAINED), BUT ONLY AFTER HAVING BEEN AMENDED TO TAKE ON BOARD THE CRITICISMS MADE

BY DEPUTIES OVER THE PREVIOUS TWO WEEKS. 150 AMENDMENTS WERE MADE

TO THE REPORT. THE MOST CRUCIAL WAS ADDITION OF THE STATEMENT MADE

BY THE POLITBURO IN MARCH THAT 'LEFTISM' WAS THE CHIEF DANGER.

3. THE PROPOSAL PUT BY THE STATE COUNCIL TO INCLUDE THE HUGE THREE

GORGES DAM PROJECT IN THE CURRENT 10 YEAR DEVELOPMENT PROGRAMME ATTRACTED MOST DISSENT. ONE IN THREE DEPUTIES DID NOT APPROVE THE PROPOSAL (177 DEPUTIES VOTED AGAINST, 664 ABSTAINED AND 25 DID NOT

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MDLIAN 6910 i

VOTE OUT OF A TOTAL OF 2633 DEPUTIES PRESENT). A TAIWAN DELEGATE ATTEMPTED TO SPEAK AGAINST THE PROPOSAL FROM THE FLOOR BUT WAS IGNORED BY THE PLATFORM AND ESCORTED FROM THE HALL AMIDST A CROWD

OF JOURNALISTS.

COMMENT

4. WHILE NOT MAKING ANY PERSONNEL CHANGES, THE NPC MARKED A FURTHER EROSION OF LI PENG'S POSITION. THE POINTED FAILURE TO INCLUDE CRITICISM OF 'LEFTISM' IN HIS ORIGINAL REPORT SHOWED HIM TO BE OUT OF STEP WITH DENG XIAOPING'S THINKING WHICH APPEARS TO HAVE

BEEN ACCEPTED BY MOST OF THE LEADERSHIP. THE INCLUSION OF THE POLITBURO'S FORMULA ON LEFTISM IN THE FINAL VERSION OF THE REPORT AFTER NUMEROUS DEPUTIES HAD CRITICISED ITS ORIGINAL OMISSION, WAS A PERSONAL HUMILIATION FOR LI. THE BACKGROUND IS UNKNOWN, BUT IT IS POSSIBLE THAT LI'S OPPONENTS MAY HAVE FACILITATED THE ORIGINAL

OMISSION IN THE EXPECTATION THAT LI COULD BE OUTMANOEUVRED AND

EXPOSED TO CRITICISM DURING THE CONGRESS ITSELF. NOT ONLY DID ORDINARY DEPUTIES COME OUT AGAINST THE PREMIER BUT OTHERS WHO MIGHT HAVE SUPPORTED HIM WERE FORCED TO SHOW THEIR HAND. CONSERVATIVE SUCH AS MILITARY LEADER YANG BAIBING AND VETERAN BO YIBO GAVE THEIR UNEQUIVOCAL SUPPORT TO THE DENG LINE, INCLUDING CRITICISM OF LEFTISM, LEAVING LI LOOKING ISOLATED.

5. THE KEY QUESTION NOW IS WHAT THE NEXT STEP WILL BE.

DENG XIAOPING MUST BE AIMING TO REMOVE LI PENG AND HIS ILK. NOT TO DO SO WOULD THREATEN THE CONTINUATION OF DENG'S POLICIES. LI HAS HAD A HAND IN BLOCKING PROGRESS IN REFORMS IN THE PAST AND HIS RECALCITRANCE HAS BEEN DEMONSTRATED AGAIN DURING THE NPC. DENG MAY WAIT UNTIL THIS YEAR'S PARTY CONGRESS AND NEXT YEAR'S NPC (WHEN LI'S CURRENT TERM AS PREMIER WILL EXPIRE), TO REMOVE HIM FROM HIS KEY PARTY AND GOVERNMENT POSITIONS, IN THE MEANTIME PUSHING HIM STEADILY ON TO THE SIDELINES AND STRENGTHENING THE POSITION OF A PREFERRED SUCCESSOR. SUCH A 'CONSTITUTIONAL' AND GRADUAL STRATEGY WOULD HAVE ADVANTAGES. IT WOULD PRESERVE A SHRED OF LEGITIMACY AND FORESTALL AN OUTBREAK OF POPULAR REJOICING ON THE STREETS WHICH A DRAMATIC OVERTHROW OF THE STILL UNPOPULAR PREMIER MIGHT PROVOKE. DENG WILL ALSO NOT WISH TO GIVE TOO MUCH ENCOURAGEMENT TO RADICAL INTELLECTUALS. THE SPEED WITH WHICH REFORMIST ECONOMISTS HAVE TAKEN THE OPPORTUNITY TO VOICE THEIR OPINIONS OVER RECENT MONTHS HAS BEEN NOTEWORTHY. CALLS FOR POLITICAL REFORM MIGHT NOT BE TOO FAR BEHIND.