Letter from Rolf Berthold to Cde. Erich Honecker

The Extraordinary and Plenipotentiary Ambassador of the German Democratic Republic to the

People's Republic of China

[handwritten note: EH [Erich Honecker], 2 June 87, To the Members and Candidates of the Politburo]

General Secretary of the Central Committee of the

Socialist Unity Party of Germany and Chairman of the

State Council of the German Democratic Republic

Comrade Erich H o n e c k e r

B e r l i n

Beijing, May 28, 1987

Dear Comrade General Secretary!

The Chinese party and state leadership attributes great importance to the upcoming visit by Comrade Zhao Ziyang to the GDR. Many times leading Chinese comrades emphasized that its main objective consists in seeing with their own eyes the results of successful socialist development in the GDR, and in learning about guidance of the economy in the GDR. Major interest will be devoted to the combines [industrial enterprises].

The Chinese comrades emphasize that relations between both parties and states have entered a new stage with your official friendship visit [in October 1986]. The visit of Comrade Zhao Ziyang in the GDR will contribute to further develop and deepen those good relations.

The visit to the GDR, and to Poland, Czechoslovakia, Hungary, and Bulgaria, is the first foreign trip of Comrade Zhao Ziyang after his election as the incumbent General Secretary of the Central Committee of the Chinese Communist Party [CCP]. Results of this trip will be of importance to further preparation for the XIII Party Congress of the CCP scheduled for October 1987.

In 1986 and during the first four months of 1987 the overall positive developments in economy and society have continued. Strenuous efforts are made to overcome still existing problems of the economy, and with regard to implementation of the reforms.

Of special importance was the discussion of recent months within the party leadership, especially those concerning assessments of the student unrests, and those with regard to basic issues of further socialist development in China. They stressed that the course decided at the 3^rd Plenum of the Central Committee in December 1978 to build socialism with Chinese characteristics has turned out to be correct, and that the policy of abiding by the Four Basic Principles, the opening to the outside, the reforms, and the vitalization of the economy will continue. At the same time, some relevant course corrections in implementing this line are noteworthy:

1. The socialist character of the social order and development path in China becomes more pronounced. Comrade Deng Xiaoping declared, this is not about “modernization”as such but about “socialist modernization”. Attacks against the leading role of the party, Marxism, and the socialist order were rejected in the context of fighting against bourgeois liberalization. Measures were launched to increase political-ideological work, especially among the youth.

It can be said that measures taken effectively halted the growth of bourgeois ideology.

Thus important conditions were created to defend and solidify the socialist order. The emphasis on the priority of the Four Basic Principles was defined as a specification of the party line during a meeting with the Deputy Head of the Department of Propaganda in the CCP Central Committee. Recently it gets emphasized that, although the socialist order has been established in China, the country is still in the initial stage of socialism. Currently there is intense theoretical discussion of these questions. It is to be expected that the XIII Party Congress of the CCP will make additional statements on development stages of socialism in China. The struggle against bourgeois liberalism is also a rejection of those who advocate that China needs to catch up with capitalist development.

2. The main focus of reform measures has changed recently. In the initial stage of reforms, the main emphasis was lying on decentralization and the extension of economic competences on the basic level. This was resulting, among else, in a rapid increase of unscheduled investments (especially so also in non-manufacturing sectors), in much strain on material and financial balances, in growing disproportions in the economy overall (lagging behind of energy and transportation sectors, as well as of raw materials production), and in a slowdown of the level of agricultural production (especially with regard to grain). Currently there is emphasis on strengthening overall economic guidance, central guidance and improvements in terms of proportions. Therefore the session of the National People's Congress in March highlighted especially the following tasks for 1987: increase the speed of agricultural development, lowering of investments, reduction of spending, and above-average growth in the energy, transportation, and raw materials sectors.

They corrected the release of prices for basic needs, since it had resulted in major dissatisfaction within the population. Previously “market regulation”received special attention in reform discussions; the term “market economy”was used frequently. Currently they stipulate to follow the task of developing “enterprise [factory] resource planning”.

Comrade Zhao Ziyang outlined at the National People's Congress’ meeting the following basic foundation for the further reforms:

“The reform of economic mechanisms in our country has to fulfill requirements of developing enterprise resource planning based on socialist collective property. The main reform content consists in strengthening the vitality of enterprises, perfecting the market, and fixing the system of the overall guidance of the economy.”

Based on these corrections, the following problems are especially in the CCP focus of preparations for the Party Congress:

- Further increase of the leading role of the party; ideological and organizational strengthening of the party.

Improvement of party leadership work on all levels and increase of effectiveness of ground organizations. Improvement of theoretical and propaganda work; development of a socialist political-ideological education.

- The Party Congress is supposed to make a fundamental decision about reform of the political leadership system. Currently there are intensive internal discussions held about this issue. This is about delimiting competences and cooperation between party and state, between organs of the state and the economy, as well as about roles and task of societal mass organizations.

Comrade Zhao Ziyang and other leading comrades are energetically demanding the development of socialist democracy and the “strengthening of channels of dialogue between the leadership and the people's masses”.

The importance of people's representations is supposed to grow. The last meeting of the National People's Congress turned into a forum of comprehensive discussion about the results of societal developments. It focused on acknowledging the successes, while problems that had occurred were critically discussed.

Special attention is given to unleash the potential of large and medium enterprises. They have launched a process to establish groups of factories, thereby considering experiences made in GDR combines. Those groups are supposed to comprise of large, medium, and small enterprises, to closely coordinate production and research facilities, and to provide uniform guidance of the entire cycles including sales, as well as to comprehensively establish a system of economic accounting. This process is one of the main objectives during further implementation of the reforms.

- Based on recent experiences of economic and political developments, also taking into consideration developments in other socialist states, recently there is special emphasis given to the high importance of political and economic stability, as well as to stable economic growth over an extended period of time. According to information from leading Chinese comrades, the CCP leadership referred in this context also to the continuity of development in the GDR and its relevance to political stability.

- Personnel questions to be decided within the framework of the XIII Party Congress will be discussed by CCP leadership in July and August. Changes are to be expected regarding the composition of the Politburo. It is to expected that Comrade Zhao Ziyang will be elected as General Secretary of the CCP Central Committee. It is still unclear whether he will then also continue to hold the function of Prime Minister.

A fundamental editorial in “People's Daily”of May 27 is internally said to have been penned by Zhao Ziyang. It defines as central tasks for the present both the struggle against bourgeois liberalism as well as the reform of mechanisms of economic guidance. Only this way there will be a socialism with Chinese characteristics; only this way there will be scientific socialism in reality, full of vitality and thus becoming a second nature.

Concerning the area of international policy, the Chinese party and state leadership emphasizes also continuity in pursuing the line of the Third Central Committee Plenum from 1978. It aims at securing the peace, developing cooperation with all countries, and at excluding strategic or alliance relationships especially with either the United States or the USSR. While maintaining this line in general, important changes have occurred recently with regard to the PR China's actual international relationships.

The official friendship visit of Comrade Erich Honecker has also established a new stage of relations between the PR China and the other socialist states. High-level contacts are increasing, relations with the parties of all five socialist states Comrade Zhao Ziyang will be visiting in June were normalized. Collaboration with the USSR is expanding although the PR China is insisting on its position of the “Three Obstacles”.

Experiences of the socialist states are increasingly taken into account in the process of developing the policy of the CCP. Chinese comrades in charge repeatedly state that experiences of the SED in the area of political-ideological work are of special importance to the CCP.

The current perestroika process in the USSR gets closely monitored and analyzed in China. It influences considerably domestic debates in China as well. Overall, the CCP leadership is of the opinion that changes in the USSR are rightly on the agenda. The CCP is wishing for their success in the interest of strengthening of socialism and development of Soviet relations with China. The press reports quite extensively about the perestroika in the USSR. They mostly consider such issues as increasing competences of enterprises and local organs, economic responsibilities of factories, developments concerning collective and private economic units, and developments of democracy and legality. Questions like “glasnost”are excluded. In meetings, Chinese comrades also assert that some concepts of democratization, as they develop in the Soviet Union, are not applicable to China. Leading Chinese comrades sometimes express in private their concern that changes in the USSR might stall, or that problems might be created due to insufficient preparation.

Overall it has to be stated that the ranking of the socialist states in PRC international relations has significantly improved recently. The Chairman of the State Committee for Science and Technology, Comrade Song Jian, said the party leadership recently emphasized one should not forget who had helped the PR China in the 1950s.

Changes have also occurred in relations between China and the United States as well as with Japan. The interference of the U.S. in China's internal mattes in context of the student unrests, the ongoing arms deliveries to Taiwan, the exceeding of the 1-percent-threshold of the Japanese armament budget, and the handover of Chinese property to Taiwan –all this was met with open criticism from the side of China, as well as the lack of American and Japanese willingness to provide modern technology and the high Chinese trade deficit due to export pressures and the lack of willingness [on the American and Japanese] to import Chinese goods. Despite unchanged intensive relations, the atmosphere in the relationship between China and the United States and Japan has suffered. It is stated [by the Chinese] that Western Europe is an important force for peace, and that there exist no conflicts of interest between China and Western Europe. Especially relations with the FRG [West Germany] are highly valued. In July Federal Chancellor [Helmut] Kohl will visit the PR China.

The PR China's position in disarmament questions remains unchanged. The PR China advocates disarmament and an end to the arms race. It is directing this appeal without differentiations both to the Soviet Union and the United States. In its own statements, China emphasizes that disarmament steps have to occur in Europe and in Asia in the same way.

With socialist greetings,

[signed]

Rolf Berthold