Deng finesses the streamlining of China's Army. China's Army is being modernized. It is no longer a bastion of resistance to China's reform. Nor is it nearly as costly. Deng's success speaks to his leadership ability.

The People's Liberation Army, celebrating its 60th anniversary this week, has begun a long transition. Its modernization is well under way.

No longer is it a stronghold of conservative political resistance to China's reform program. No longer is it a burden on the nation's finances.

Once the world's largest standing Army, whose strength was the determination and bravery of poorly educated peasant boys recruited from rural villages, the People's Liberation Army (PLA) has accepted massive cuts in manpower and resources. Its senior officers have been forced to adopt a more modern approach to warfare. They have had to revise their emphases on sheer numbers of men over weapons, and ideology over expertise - principles based on the teachings of Mao Tse-tung that proved successful in guerrilla warfare more than four decades ago.

That these changes have come without serious political difficulties for Deng Xiaoping is a tribute to his leadership and a valuable legacy to his successors. Especially in the past two years, the armed forces have demonstrated their loyalty to the Communist Party by accepting major cuts in funds and personnel with hardly a word of complaint, at least in public.

This year the military budget is set at 20.4 billion yuan ($5.5 billion). This is slightly less than the 1986 allocation, but as a proportion of the total state budget, it is at a record low of 8.2 percent. At the time of China's 1979 invasion of Vietnam, the military accounted for 20 percent of the national budget. It was at 40 percent in the early 1950s during the Korean War.

1 million soldiers demobilized

In a dramatic announcement that received worldwide attention, Mr. Deng ordered the PLA to demobilize 1 million personnel in 1985. The demobilization is now complete, according to the Chinese press. With a little more than 3 million men, the PLA now stands in second place after the Soviet Red Army.

Observers comment that in 1987 the PLA is still not exactly lean. Some Western military attach'es speculate the armed forces could be ordered to shed another 500,000 men later this year.

Deng has begun streamlining the military with the help of his staunch allies Yang Dezhi, armed forces chief of staff, and Yang Shangkun, executive vice-chairman of the Central Military Commission. One crucial decision came two years ago when Deng announced that the ``forces for peace were growing'' and the Army no longer needed to prepare for an imminent world war. A period of general global peace was likely, Deng said, and China could modernize without the burden of a heavy defense program.

Deng and his reform-minded leadership have persuaded the defense establishment that its long-term interests are served by giving priority to strengthening China's agriculture, industry, and civilian technology. The generals have been promised that by the end of the century, when China is prosperous and the foundations of a modern industrial economy are well-laid, the resources for a more formidable military will be available.

Army influence peaked around 1970

Some observers say the PLA was at the height of its post-1949 political influence around 1970. At that time it brought the nation out of the anarchy of ultra-leftism by restoring order and stability after the first violent years of the Cultural Revolution (1966-76). Except for a failed attempt to grab power by former Defense Minister Lin Biao in 1971, the military has generally not challenged the control of the Communist Party.

This has been partly because of the integration of the senior military officers with the party elite. But under Deng, generals have been removed from top party posts. The number of military uniforms in the party's Politburo was reduced from 10 in 1982 to three in 1985, plus one alternate member. The proportion of uniformed members on the 210-member Central Committee is now 22 percent, roughly half of what it was at the height of the PLA's political influence.

Yet the armed forces still pull political weight. Reportedly, Mr. Yang and Yu Qiuli, the armed forces' political commissar, were among a small group of so-called conservatives who visited Deng last December to insist that party General Secretary Hu Yaobang be dismissed.

Deng took their advice, which came only days after the end of an unusual meeting of the Central Military Commission which Mr. Hu attended but did not address. These events have heightened speculation that one reason for Hu's political collapse was lack of support within the armed forces.

During the trimming of personnel, it has been the veteran revolutionaries who have been most reluctant to retire. Two months ago, the resignation of some 33 senior generals in the Peking military region made front-page news.

Younger officers fill top posts

Such resignations have opened the way for younger officers to fill top posts and have been accompanied by major reorganizations of military commands. Last year the number of military regions was reduced from 11 to seven and the field army organization was replaced with group armies which integrate the major services under one command.

The average age and educational level of the officer corps have changed dramatically, according to a press report this week. Compared to 1982, the average age of the commanding staff in the military regions has dropped from 65 years to 57 years. Among the regional commanders, which include the senior officers on the general staff as well as local service commanders, some 55 percent are college-educated compared to only four percent five years ago.

The military may not be content, however, to see its profile lowered so drastically. A recent commentary by the Chinese defense minister warned that the nation should not be lulled into pacifism. The confrontation between the two superpowers still exists, he said, and regional wars take place constantly.

``There are many unsafe factors along China's borders and our territory and territorial sea are threatened,'' wrote Zhang Aiping in the People's Daily, the party paper. Mr. Zhang's mentions of territorial threats refer primarily to the Soviet Union, say Western military attach'es, though he could also be referring to ongoing hostilities with Vietnam and border disputes with India.

Analysts say the Chinese Army is far from offering adequate protection against attack by the better-equiped and better-organized Soviet Red Army.

The early struggles of China's Army

The founding of the People's Liberation Army (PLA) has been set as Aug. 1, 1927, during the early years of the civil war between the Communists and the Nationalists. That was the date of a Communist uprising in Nanchang, a sleepy town in the southern province of Jiangxi that was then serving as a base for Gen. Chiang Kai-shek's Nationalist Army.

Besides Chou En-lai, who led the revolt, many of China's most famous Communists were involved: Zhu De, Chen Yi, Liu Bocheng, Ye Ting, Lin Biao, and Nie Rongzhen. All later held senior positions in the Communist hierarchy and some were among the famous ``10 marshals'' named by Mao Tse-tung.

After six days, Nanchang was quickly retaken by the Nationalist forces. But Harrison Salisbury wrote in his book ``The Long March'' that, despite its failure, the uprising brought together some of the most brilliant of the Communist military leaders. It was an important event for their cause, which has since been celebrated more as a victory than a defeat.

Recalling the uprising in the People's Daily this week, Marshal Nie Rongzhen said that before the uprising, the Communist Party was in a dangerous situation. ``Facing the Kuomintang [Nationalist] white terror, we had a severe debate,'' said Mr. Nie. The revolt, he said, was carried out despite opposition by some party leaders.

Later the PLA recovered from other apparent defeats, including the grueling ``long march'' of 1934-35. According to Mr. Salisbury, the trek claimed all but 4,000 of 86,000 men and women who began the strategic retreat from Nationalist armies. But, by the late 1940s, Mao had enlisted more than 4 million troops to defeat the Nationalists.