The people prosperity passed by

EMERGING from the darkness of his earthen cave, Li Ketai scans a lonely flat of sunbaked land where for generations his kin have endured drought, thirst, and famine. ``For food and water, we depend on heaven,'' said Mr. Li, who has lived for 60 years in a dugout carved from a barren hillside high on China's vast loess plateau.

This year, heaven proved unkind. Drought seared farmland throughout the desolate region, destroying the wheat crop that was to feed Li's family. ``Nothing survived,'' said Li, whose main sustenance now is less than a pound a day of government grain.

Threatened with severe shortages of water, fuel, and nourishment in this harsh northwestern terrain, Li and the 2,700 villagers of Daheng are among the poorest of China's poor.

It is as if the shower of new wealth that has swept China in the past decade of economic reform passed over the arid highlands of Daheng, a tiny cluster of adobe homes linked to the outside by only a dirt path.

Despite impressive economic growth since Chinese leader Deng Xiaoping began freeing market forces in the late 1970s, deprivation persists for millions of Chinese in remote mountain and border areas. Almost all of the impoverished are farmers, and many belong to China's minority ethnic groups.

One hundred million Chinese - a 10th of the population - live below the official poverty line, surviving on less than 200 yuan ($54) a year. The most destitute, 30 to 40 million people, are hungry, poorly clothed, and inadequately sheltered, according to government statistics.

More controversial, from a Marxist viewpoint, has been the dramatic widening of the income gap between China's rich and poor since 1980. In that year, Mr. Deng denounced the radical egalitarianism of Mao Tse-tung and began encouraging ``a part of the population ... to become well off first.''

Under Mao, China sacrificed growth for equality. The state was a ``big rice pot,'' redistributing wealth but suppressing vital incentives. Deng reversed Mao's priorities, condoned inequality, and urged Chinese to compete for wealth in a drive for economic efficiency and prosperity.

Deng's reforms have allowed localities to thrive or stagnate on their own strengths, sharply exacerbating regional income disparities. Most glaring is the contrast between China's prospering east coast and the remote, economically backward inland.

In 1980, China's eastern provinces boasted an average rural income 27 percent above that of those in the west. By 1987, the difference had reached 60 percent, according to Chinese and World Bank statistics.

``We predict the gap will expand for the next several decades,'' said Gao Hongbin, vice-director of the State Council's Poverty Office. ``China will fail to modernize if we eliminate these discrepancies.''

The inequities spawned by reforms are striking when one travels from big cities in the east to inland regions like Gansu, one of China's poorest provinces.

A thousand miles from the East China Sea, Gansu covers a large swath of China's loess plateau, a mass of wind-borne silt rising some 6,000 feet above sea level. To the north, the plateau abuts the Great Wall, and beyond it, the Gobi Desert. Here, rainfall is a scant 50 to 100 inches a year and temperatures stay at or below freezing from November until February. Erosion has caused the plateau's soft, yellow loess to become a maze of gullies.

The most destitute part of Gansu is its middle region, where, despite gains from antipoverty programs, officials estimate that a third of the population lacks adequate food and clothing. The region is home to 5.4 million peasants, including the villagers of Daheng.

Here, the legacy of hardship is so ancient and enduring that it has shaped the region's folk culture.

``Nine years out of 10 bring drought, and we must eat one year's harvest for a decade,'' one saying goes. When heaven provides no rain, drinking water must be hauled scores of miles from the Yellow River by truck, donkey cart, and men on foot.

``In the most difficult times, flocks of birds follow the water trucks into our county - they are thirsty, too,'' said Zhang Zhaomin, a Daheng official.

With sporadic droughts and no irrigated land, peasants in Daheng toil in constant uncertainty. Grain yields in the region are among the lowest in China, but each year farmers plow and sow, hoping nature will grant even a single crop.

Coaxing all they can from the parched land, Mr. Li and other Daheng peasants use a grueling, centuries-old tilling method known as ``dry-gravel farming.'' Li digs gravel from loess bluffs and spreads it thickly across his fields to hold in the moisture from any rain. After planting seed deep beneath the rock layer, Li never waters, but waits for wheat to sprout up between the stones. Li must harvest the wheat by hand, removing the roots to keep them from obstructing future crops.

``Grandfather dies hauling gravel,'' goes a local proverb. The father reaps higher yields from the rock-strewn land, and so ``dies of prosperity.'' But after successive harvests a new layer of stones is needed, and ``the son dies of starvation.''

Li and his family are not starving, but food shortages are chronic in Daheng, and most of the villagers have long relied on government relief grain to stave off hunger. ``Here life is difficult and poor, so we eat the state's grain,'' said Xue Yuhui, Daheng's Communist Party secretary. Daheng's peasants earn the equivalent of 180 yuan ($48) a year on average, he said.

Each morning, Li gathers with his wife, daughter-in-law, and grandson for a breakfast of steamed wheat buns made from relief grain. Bowls of noodles sustain them at noon and suppertime. Family members break the bitter cold of February with Chinese New Year celebrations, warming their stomachs and raising their spirits with a small feast of pork - the only meat they taste each year.

In years of nationwide famine, the family survived by eating a wild plant called kuku cai, or bitter vegetable, and the chaff of any grain they came by. ``We ate kuku cai just like a vegetable,'' said Li. ``A lot of people went hungry.''

Like people of north China in Neolithic times, Li's family takes shelter in a cave cut from a loess bluff. From a courtyard of tamped dirt, arched doorways lead into the family's six small, windowless rooms with walls plastered with straw and mud.

The family sleeps on broad beds of packed soil lined with straw mats. In the kitchen, Li's wife cooks over a crude earthen stove, using dried grass and clumps of sod to stoke the flames. Many households in the region lack fuel for cooking, heating, and lighting for up to six months a year. ``You couldn't say we're warm, but at least we can bear it,'' Li said.

Hoarding each drop of drinking water nature offers, the Lis collect runoff from occasional rainstorms in a pit, but they cannot spare enough of the precious liquid to bathe.

A primary school graduate, Li said he knows little about ``the outside world.'' Before being interviewed, he said he had never met a foreigner. In his spare time, he said, he sometimes reads a newspaper. Otherwise, ``I walk around, or drink tea.''

While Peking is eager to help villages like Daheng escape deprivation, reform has brought a new pragmatism to antipoverty work. In 1986, Peking began phasing out the Maoist policy of sustaining the poor with handouts of cash, grain, and cotton cloth. Instead, most state poverty funds are now channeled into low-interest loans for development projects.

Irrigation projects have dramatically increased crop yields in some parts of Gansu's middle region. Near Daheng, a joint Chinese and World Food Program project last year began pumping millions of gallons of Yellow River water a day onto 90,000 acres of arid land.

But many poverty-stricken areas like Daheng lie beyond the reach of such projects. Acknowledging this, Peking has abandoned efforts to develop some areas and encouraged their inhabitants to migrate.

``The government has come to realize that some of the poor areas simply cannot support their populations at acceptable standards of living,'' said a Western economist. Since 1986, 400,000 people have quit poor villages in Gansu's middle region, and 200,000 more are expected to move, according to official statistics.

A few miles down the bumpy dirt road from Daheng, the villagers of Shixiazi were busy moving out, knocking down their adobe homes and loading the salvaged wooden rafters onto hand-pulled carts. ``Life here is bitter. There is little food to eat and little water to drink,'' said Wang Shiqi, a longtime resident of Shixiazi.

But the traditional fatalism deeply rooted in the minds of China's stoic peasants binds many to their homes, despite the hardship. ``This place is still undeveloped, and there's a big gap with coastal areas, but we're surviving,'' Li said.

``I've lived here for many years. My heartstrings are tied to this home,'' Li said. ``Our place is good, things here are peaceful and uncomplicated.''

Part of an occasional series. Next: A poor peasant leaves his farm to seek work - and riches - in the city.