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14. JIANG SAID THAT THE IMPACT ON SHENZHEN AND THE OTHER SEZS OF

THE CURRENT BRAKING POLICY SHOULD NOT BE GREAT, PROVIDED THEY OBEYED FINANCIAL DISCIPLINE AND DID NOT SEE UP NEW INDUSTRIES

ETC OF A BUBBLE ECONOMY TYPE. SHENZHEN HAD PROVIDED A LESSON IN DEVELOPING STOCK EXCHANGES: IN AUGUST 1992 THOUSANDS HAD QUEUED TO BUY CERTIFICATES ENABLING THEM TO BUY SHARES, AND THE LESSON HAD BEEN LEARNT. JIANG HAD TALKED TO THE MAYOR OF SHENZHEN AFTERWARDS. INITIALLY JIANG HAD THOUGHT THAT HE WOULD FORGIVE THE

MAYOR BUT HE HAD CHANGED HIS MIND WHEN THE MAYOR HAD ANSWERED HIS QUESTIONS BY SAYING THAT THE SHENZHEN AUTHORITIES HAD WANTED TO ATTRACT THE SURPLUS CAPITAL IN SHENZHEN INTO THE SHARE-ISSUE. JIANG HAD SAID THAT HE WAS WRONG: MOST OF THE PURCHASERS WERE NOT

FROM SHENZHEN THEY HAD COME BY AIR, LAND AND SEA TO QUEUE IN HE STREETS OF SHENZHEN. THE SHENZHEN AUTHORITIES HAD THOUGHT THEY COULD RAISE ONE BILLION YUAN RMB BY SELLING APPLICATION FORMS: IN FACT THE CENTRAL AUTHORITIES HAD TAKEN THIS ALL AWAY FROM THEM. HE

HAD TOLD THE MAYOR THAT HE COULD NOT CONTINUE TO WORK IN SHENZHEN:

HE HAD NOT SUFFERED DISCIPLINARY MEASURES BUT HAD BEEN MOVED

ELSEWHERE. THERE HAD BEEN A LOSS OF TALENT AND MONEY.

A

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THE SECRETARY OF STATE SAID THAT HE WAS SURE IT WAS IN OUR

INTEREST THAT CHINA SHOULD BE PROSPEROUS. HISTORY TOLD US THAT IT WAS BETTER WHEN COUNTRIES WERE PROSPEROUS, NOT WEAK AND UNHAPPY.THEY MADE BETTER NEIGHBOURS, AND WE BENEFITTED FROM TRADE AND INVESTMENT. JIANG SAID HE WAS GLAD TO HEAR THIS. HE COULD TELL THE SECRETARY OF STATE THAT THE CHINESE GOVERNMENT

WAS CONCENTRATING ITS EFFORTS ON DEVELOPMENT, WITH THE TARGET OF A

SOCIALIST MARKET ECONOMY. TO THIS END IT WAS PLANNING A SERIES OF SYSTEMATIC REFORMS. THESE WERE NOW UNDER STUDY AND WOULD BE OUT TO

THE 3RD PLENARY OF THE 14TH CENTRAL COMMITTEE AT THE END OF THIS

YEAR OR EARLY NEXT YEAR.

16. IN CONCLUSION, JIANG ASKED THE SECRETARY OF STATE TO CONVEY HIS REGARDS TO HM THE QUEEN, WHOM HE HAD RECEIVED WHEN HE WAS MAYOR OF SHANGHAI, AND TO THE PRIME MINISTER. THE SECRETARY OF STATE SAID THAT HE WOULD DO SO.

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FED REGISTRY PLEASE COPY TO HKD, ECONOMIC ADVISERS AND RAD.

SIGNED: JANET ROGAN

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