CHINA: REFORMERS SET POLITICAL AGENDA FOR 1986

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86T01017R000605650001-8
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 7
• Document Creation Date: December 22, 2016
• Document Release Date: March 8, 2011
• Sequence Number: 1
• Publication Date: February 3, 1986
• Content Type: MEMO

Sanitized Copy Approved for Release 2011/03/24: CIA-RDP86T01017R000605650001-8 25X1
Central Intelligence Agency
DATE Z 10 8 ~ Doc No 6:--A M &?ao /o
OCR DIRECTORATE OF INTELLIGENCE
P&PD /
3 February 1986
China: Reformers Set Political Agenda for 1986
Summary
Party reformers used an early January leadership conference in
Beijing to set the political agenda for 1986. Among the policy initiatives
they raised were: slowing the pace of economic reform, renewing efforts
to root out corruption among central government and party officials, and
continuing the military reforms. Party reformers bluntly admitted
difficulties in the implementation of economic policies, but blamed many
problems on corrupt officials, and refuted accusations that the reforms
themselves were flawed.
We believe the reformers also had a hidden agenda: to consolidate
their position in the aftermath of the Party Delegates Conference and to
wrest the initiative on the debate over economic reform and control of
corruption away from Party conservatives. During the conference, they
announced the formation of a special task force, responsible to the
Secretariat, to investigate economic crimes.
This memorandum was prepared byl Office of East Asia Analysis. Information 25X1
available as of 3 February 1986 was used in its preparation. Comments and queries are
welcome and may be directed to the Chief, Domestic Policy Branch, China Divsion, OEA,
25X1
25X1
Sanitized Copy Approved for Release 2011/03/24: CIA-RDP86T01017R000605650001-8
 Sanitized Copy Approved for Release 2011/03/24: CIA-RDP86T01017R000605650001-8
We expect the reformers to keep up an aggressive defense of their
policies and to prepare for tough debate on the economy at the National
People's Congress in late March. Despite the renewed emphasis on
discipline and punishment of corruption, it is unlikely that important
political leaders will fall victim to the campaign.
Putting the Brakes on Reform
Partly in response to widespread public uneasiness with economic reforms in
1985, party reformers candidly admitted difficulties occurred last year and promised to
suspend or slow down some of the most controversial policies. Vice Premier Tian Jiyun,
in his 9 January address to 8,000 senior officials, for instance, declared that although
reform in some areas will proceed in 1986, the year in general will be one of "digestion
and consolidation" of reform. Tian acknowledged the leadership's responsibility for last
year's overheated economy, but insisted that the overall situation was still good and the
problems were being solved gradually. Tian took note of the public unhappiness with
rapidly rising prices and promised that the government would work to keep prices stable
in 1986 and would not expand the scope of the inflationary aspects of wage reform. F_
Since last fall, the reformers have been working hard to rebut the assertions of
some conservatives that economic reforms threaten to undermine economic stability
over the long-term. Tian Jiyun, for instance, appeared to refute Politburo Standing
Committee member Chen Yun's charges that the drop in grain production, the growth in
the number of well-to-do peasants, and rapid industrial growth will inevitably result in
an unstable and polarized society. At the conference, Tian argued vigorously that the
only way to solve the problems brought on by reform was to maintain and expand the
reforms, and he praised the energetic and effective response of the reformers last year
to the problems of overly rapid growth.
Going After Corruption at the Top
We believe party reformers are trying to seize the initiative on corruption within
the party--which conservatives often allege is a byproduct of the economic reforms.
Secretariat member Hu Qili announced at the meeting that a "leading
group"--responsible to the Secretariat and headed by Qiao Shi--will take control of
rooting out corruption and enforcing discipline among central government and party
officials, problems that have become more serious in the last two years. Hu called for
completion of the anticorruption campaign by the end of the year and a "basic turn for
Secretariat member Wang Zhaoguo--an avid reformer who is in charge of party work in
the central organs--was appointed to the new "leading group." He gave a major speech
to the conference on the seriousness of corruption in central state and party
25X1
25X1
Sanitized Copy Approved for Release 2011/03/24: CIA-RDP86T01017R000605650001-8
 Sanitized Copy Approved for Release 2011/03/24: CIA-RDP86T01017R000605650001-8
Although criticism of "unhealthy practices" within the party--such as taking
bribes, influence peddling, and officials setting up private businesses for themselves or
family members--has been a staple of party rectification and discipline inspection work
since 1983, this is the first time the central bureaucracies have become so specifically
targeted. In the past, local party members usually bore the brunt of investigation and
punishment. The renewed campaign is a recognition of the fact that cadre corruption is
increasing, and is a national, not simply a local, problem.
Implicit in the reformers' criticism of the rising tide of official corruption,
therefore, is an indictment of the party's rectification campaign--now in its third and
final year. Hu Yaobang complained at the conference that the task of "enhancing party
spirit"--a goal of rectification--has yet to be achieved, and Military Commission Vice
Chairman Yang Shangkun indicated that units that have completed the rectification
campaign requirements might be forced to repeat the experience. To underline the
reformers' conviction that bureaucratic obstinacy still impedes rectification, Hu called
upon all Chinese officials to report malfeasance directly to the Central Committee--over
the heads of their own party committees.
Pushing Ahead with Military Reform
Although holding the line on some economic changes, party reformers are
indicating their intention to press ahead at full speed with reform of the military. Yang
Shangkun--the only party elder to speak at the meeting--called for "continual work" by
the army to bring the reduction-in-force and other military reform goals to a successful
As for anticorruption work, Yang was harsher in his criticism of the army's
abuses than other leaders were of the central party and government bureaucracies.
Yang suggested that some central military units had merely breezed through
rectification without accomplishing the goals set for them, and he lashed out at
profiteering, nepotism, and passive resistance to the reductions in personnel ordered by
Deng Xiaoping last year. Yang told military cadre that a sharp turnaround in discipline
must be achieved by the first quarter of the year, and scheduled a meeting to formulate
plans to implement the new policy.
In our view, Yang set the PLA somewhat apart from the party's anticorruption
measures. Despite Hu Yaobang's claim that the Secretariat would take charge of the
campaign in all central organs, Yang stressed the role of the Military Commission in
carrying out the anticorruption campaign in the armed forces. Moreover, Yang chided
the General Political Department (responsible for the ideological work that ensures good
discipline in the army), which he asked to "pay attention" to important cases of
corruption from now on. General Political Department Director Yu Qiuli was
conspicuously absent from the conference.
Sanitized Copy Approved for Release 2011/03/24: CIA-RDP86T01017R000605650001-8
 Sanitized Copy Approved for Release 2011/03/24: CIA-RDP86T01017R000605650001-8
Deng's Succession Team Leads the Way
With the exception of Yang Shangkun, the Meeting of Central Cadres provided a
showcase for Deng Xiaoping's new succession team; senior Politburo Standing
Committee members--including Deng--did not attend. Hu Yaobang and Zhao Ziyang
seemed to be playing the role of elder statesmen usually reserved for Deng Xiaoping
and other party veterans, while Secretariat members Hu Qili, who presided over the
meeting, Tian Jiyun and Wang Zhaoguo gave the key addresses.
We did note some anomalies in leadership attendance at the meeting, however.
Yang Shangkun's participation suggests the reformers' continuing lack of suitable
reform-minded succession leaders in the military. Li Peng, who has been touted widely
as Premier Zhao's successor, did not attend the conference. Instead, Li went on a
well-publicized inspection tour of Shanghai, Hangzhou and Wuxi, appearing again in
Beijing four days after the conference closed.
Setting the Tone for 1986
Party reformers used the meetings, we believe, in part to preview the 4th session
of the 6th National People's Congress (NPC), scheduled to convene on 25 March. We
expect many of the themes aired in January--especially concern about the pace of
reform and cadre malfeasance--to be reiterated at the NPC session. By promoting
these issues so prominently now, party reformers probably are trying to frame the
debate over the 7th five-year plan and other key economic issues that will be discussed
in detail at the work conferences preceding the NPC session.
We believe party reformers are trying to set the political tone for 1986: tough,
resolute, and in control. The January speeches and subsequent press commentary
indicates the reformers intend to press ahead gradually with reform next
year--preferably with less political friction than in 1985. Nonetheless, we believe that
party conservatives will remain critical of the high growth rates, inflation and western
influences that reform tends to generate and will continue to resist full implementation.
While the reform leadership is prepared to accommodate these views to some degree,
they are also willing to attack or outmaneuver conservatives like Chen Yun to achieve
their goals.
Although the renewed anticorruption effort may net some officials at the Vice
Ministerial level, we believe it very unlikely that any Central Committee leaders will
become explicit targets of the campaign. We note, however, that corrupt behavior of
the children of some senior officials may become an increasing factor in high-level
political infighting. There have been several reports that children of Hu Yaobang and
Zhao Ziyang are withdrawing from some high-profile business positions--most likely to
insulate their fathers from political attack on corruption or nepotism grounds.
Nonetheless, we do expect the party to prosecute a much more vigorous
anti-corruption campaign in the provinces--and in Beijing municipality. Hu Qili recently
announced, for instance, that economic criminals should be given the death penalty in
Sanitized Copy Approved for Release 2011/03/24: CIA-RDP86T01017R000605650001-8
 Sanitized Copy Approved for Release 2011/03/24: CIA-RDP86T01017R000605650001-8
severe cases. Since the conference, several provinces have announced the cracking of
corruption cases involving large-scale theft; Guangdong, according to US Consulate
Guangzhou, has already begun to mete out much harsher punishments for economic
crimes than in the past--including several executions--and we expect to see more of
Sanitized Copy Approved for Release 2011/03/24: CIA-RDP86T01017R000605650001-8
 Sanitized Copy Approved for Release 2011/03/24: CIA-RDP86T01017R000605650001-8
Subject: China: Reformers Set Political Agenda for 1986
Distribution:
National Security Council
1 - David Laux, Room 302, Old EOB
Department of State
1 - Richard Williams
Director, Office of Chinese Affairs
Room 4310
1 - Peter W. Rodman
Chairman, Policy Planning Staff
1 - John J. Taylor
Director, Office of Analysis for East Asian and Pacific Affairs
Room 8840
1 - Chris Clarke
INR/EAP/CH
Room 8840
Department of Defense
Department of Commerce
1 - C/OEA/CH, Room 4G32
1 - C/OEA/CH/FOR, Room 4G32
1 - C/OEA/CH/DEV, Room 4G32
1 - C/OEA/CH/DOM, Room 4G32
1 - C/OEA/CH/DEF, Room 4G32
1 - OEA/Research Director, Room 4G48
1 - D/OEA, Room 4F18
1 - DDI, Room 7E44
Sanitized Copy Approved for Release 2011/03/24: CIA-RDP86T01017R000605650001-8
 Sanitized Copy Approved for Release 2011/03/24: CIA-RDP86T01017R000605650001-8
1 - Senior Review Panel, Room 5G00
1 - PDB Staff, Room 7F30
1 - NIO/EA, Room 7E62
1 - C/PES, Room 7F24
1 - D/DO/PPS, Room 3D01
1 - FBIS/NEAAD Room 306 Key
1 - FBIS/AG
1 - C/EA
10th Floor, Key
Room 5E18
1 - CPAS/ILS, Room 7G50
5 - CPAS/IMC/CB, Room 7G07
25X1
25X1
25X1
Sanitized Copy Approved for Release 2011/03/24: CIA-RDP86T01017R000605650001-8