Letter, 'Re: Chinese and Japanese Diplomats on Foreign Policy Issues'

Strictly confidential!

Copy no. 1

Ministry of the Interior

General Directorate III/II

Re: Chinese and Japanese diplomats on foreign policy issues

Attn.: Comrade János Bogye, police major general

deputy head of general directorate

head of Directorate III/I of the Ministry of Interior

Budapest

The counsellor responsible for domestic issues at the Chinese embassy in Moscow invited about 30 diplomats and their wives to a reception on 9 June. The social event was attended by Japanese, American and other Western diplomats among others. Diplomats from Hungary, Czechoslovakia, Poland, Bulgaria and Romania were also present at the gathering.

Chinese and Japanese attention almost solely focused on the preparations for the CPSU's national party conference.

Japanese first secretary Chikahito Harada, who is an expert of Asian affairs and also responsible for press relations at the Japanese Embassy, shared their evaluation, according to which the CPSU's leadership is divided. The dispute is mainly between the political lines represented by Gorbachev and Ligachev. He inquired about what changes in posts are to be expected after the party conference. In their judgment Gorbachev will most of all face problems about carrying out further radical economic reforms. Relations between Japan and the Soviet Union have improved to some extent. Building relations is much easier with China than with the Soviet Union. The Japanese prime minister will pay a visit to China in 1988. This will mark an important step forward in the development of economic relations between the two countries.

Japan has taken notice of the progress made in the relationship between Budapest and Seoul, which is welcomed and supported by Japan. They would also welcome if the Soviet Union started to develop relations with South Korea, perhaps with Hungarian mediation. The first secretary inquired whether the Soviet Union purchased South Korean products through re-export by Hungary.

Hungary's image in Japan is good. They are well-informed about the results of the HSWP's national conference. In Japanese views, the Hungarian reform exerts a beneficial effect on the Soviet perestroika. The Kuril Island and Southern Sakhalin constitute the main barrier to Japanese-Soviet reconciliation. Japanese businessmen are interested in utilizing opportunities in Siberia.

China pays special attention to the preparatory process leading up to the Soviet party conference as said by Zhang Gencheng Chinese first secretary, Xiong Yingmeng Chinese second secretary and Zhang Yonguan Chinese second secretary. They perceive the conflicts within the CPSU. In their opinion, Ligachev's positions have been reinforced now, on the eve of the party conference. Ligachev's speech delivered in Togliatti was leading news item in the Soviet mass media. The speech clearly reflected Ligachev's reservations, his understanding of perestroika, his rejection of market relations, etc.

The Soviet-Chinese summit meeting is about to take place soon. Some slow progress is being made in Cambodia thus overcoming this barrier seems possible today. China is interested to purchase advanced western technologies, which are less likely to be found in the Soviet Union. Increasing the exchange of goods between China and the Soviet Union runs into difficulties because of the poor Soviet supply. On the whole, the normalization of Chinese-Soviet relations proceeds well, the summit meeting of the two party leaders will bring this process to complete success. The Chinese diplomats regard the Chinese reform policy to be more radical than the Soviet reform.

China is satisfied with the outcome of the Soviet-American summit held in Moscow as it indicates the further mildening of Soviet foreign policy. China welcomes the improvement of Soviet-American relations since it will have a moderating effect in the Asia policy of the Soviet Union.

It is China's interest that Mikhail Gorbachev's transformation policy is successfully implemented. At the same time China still maintains reservations regarding the Soviet Union, it is highly unlikely for Chinese-Soviet relations to become close again in the foreseeable future.

China strongly focuses on the Hungarian reforms. They are pleased to see that both China and Hungary have embarked on a policy of rejuvenation. China learnt about implementing reforms from Hungary several years ago, when the regular pilgrimage of Chinese economists to Budapest still drew international attention. In Chinese judgment, Hungary has again taken a leading position internationally after the party conference, and will have a lot to share in terms of experiences gained in the renewal process. The Chinese people will not forget that Hungary was the first to make a gesture of friendship at a time when Soviet-Chinese relations were still chilly.

Chinese-Hungarian relations are obviously characterized by a higher degree of closeness than Chinese-Soviet relations.

Information: checked

Validity: 10.06.1988

Source: Department III/II-12, report 40-12-3-200/06.07.88

Forwarded for measures to be taken: -

for information: Directorate III/I, Dept. III/II-4

Budapest, 18 July 1988

Dr. Miklós Rédey, police major general

deputy head of general directorate

Prepared in 3 copies (1 copy consisting of 2 pages)

Copy no. 1 for Directorate III/I

Copy no. 2 for Dept. III/II-4

Copy no. 3 for the archives