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reform would inevitably lead to political reform. Singapore and Taiwan could be valid models for China in
this respect. A second fact that had struck him was the
growing autonomy of the provinces.
In a sense this was
positive allowing for greater economic and social freedom. But it had a negative side in that local protectioni sm would prevent the development of a true national market. Politically it was clear that the Party had lost much credibility: corruption and nepotism were major problems. But there was no clear alternative. West had a great interest in the stability of China;
perhaps we should recognise that we had a less interest in pressing for political reforms.
The
10. Sir J Coles agreed generally with this analysis. When he was in Peking last week Western Ambassadors had said that while there was clearly a major push by the economic reformers underway, political reform was still
no t on the agenda, nor was there any strong constituency for political reform. This year was likely to see political change in China, Li Peng might not survive. But this did not mean change in the political structure. The difficult question against this background was how should the West handle China. Our need to deal with the
Chinese over Hong Kong singled out the UK. Whatever the
nature of the Peking regime we needed China's
cooperation. This had been the reason for the Prime
Minister's visit. So far we had avoided inviting Li Peng here although other Ministerial visits were continuing,
partly to promote our economic and commercial relations. Herr Schlaginweit confirmed that for the moment Li Peng would not be welcome in the FRG.
11. Sir John Coles said that on human rights Ambassadors in Peking thought that the action the West had taken had
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