China tightens its bureaucratic belt. Trying to enliven its economy, Peking will trim the ranks of its oversized state bureaucracy. Some 10,000 jobs will be cut in a bid to increase efficiency.

China announced a plan yesterday to drastically streamline its bloated state bureaucracy and reduce the role of strict central planning in day-to-day affairs. State Councillor Song Ping, addressing the the nation's nominal parliament, said the plan will scrap 14 government departments, create 10 new ones, and trim the bureaucratic ranks by 10,000 employees. It is the first major step in a massive effort to better the performance of China's 27 million state and Communist Party bureaucrats.

The shake-up will enable the government to eradicate inefficiency, overlapping duties, and heavy-handed management, which hinder China's free-market economic reforms, Mr. Song said. The changes, he said, are critical to the success of the reforms that in the last 10 years have greatly improved the livelihoods of the 1 billion Chinese.

``Without restructuring the government organs, the economic reform cannot be carried out in a deep-going way, ... nor can many measures for reforming the political structure be implemented,'' Song said, according to a report by the official New China News Agency.

Under the plan, the state will further abandon Soviet-style controls applied since the 1950s.

Peking will create what Acting Premier Li Peng called on Friday ``a new economic mechanism under which the state regulates the market and the market guides enterprises.''

Government control of an enterprise's ``money and goods will be delegated to lower levels'' while state decisionmaking and regulation ``will be strengthened so that the government's direct management of enterprises will be gradually changed into indirect management,'' the news agency reported.

Curbs on bureaucratic meddling have helped spur China's economy to an annual growth rate of 11.1 percent since 1980 and more than double the average income of Chinese in a decade.

The bureaucratic trimming parallels a plan to reduce the control of the Communist Party on mundane bureaucratic matters.

Song Tingming, a spokesman of the State Commission for Restructuring the Economic System, said last week ``It's already been decided ... that the party group will no longer lead the ministry.... The ministers will handle the admininstration.''

Although the party has enjoyed unchallenged power in the ministries, in the future it will primarily ``be responsible for educating and training party members,'' he said.

Most of the 10,000 retrenched functionaries - representing 20 percent of the Peking bureaucracy - will surrender their jobs as state planners for posts as managers of state enterprises, Song Ping said. Others will join departments in accounting, statistics, and taxation, while the remainder will either be retrained or retired, he said.

The overhaul is scheduled to be completed three months after the parliament, the National People's Congress, ends on April 13, Song Ping said. The leadership will draw up similar plans for the reform of China's 30 remaining ministries by July and apply the measures in late 1988.

Also, the government will begin reforming provincial, autonomous-region, and municipal governments next year, acting Premier Li Peng said in an address to the congress on Friday.

The reforms announced Monday will bring the transport system under the Ministry of Transportation, consolidating air, sea, and rail agencies. Recent railway and jetliner accidents have prompted harsh criticism of these organs.

They will also will establish a personnel ministry that will run a new civil-service program and labor ministry that will draft a national labor policy. And they will combine two similar bodies that handle the economy into a state planning commission that will ease direct management of state enterprises.

``After organizations have streamlined and administrative functions changed, there should be a major change in ways of thinking and style of work in governments at all levels,'' said Li. ``If for a long time to come we are to lead the people in an arduous effort to overcome our country's backwardness and attain our goal of modernization, we shall have to be conscientious, diligent, and thrifty.''