Deng Struggles To Set Reform Back on Track

ONE day last month while touring China's prosperous south to promote his market-oriented reforms, Chinese leader Deng Xiaoping came upon a jade tree in a lush botanical garden.

To the cheers of his entourage, Mr. Deng reached out and felt the smooth bark of the tree, believed to bring riches to whoever touches it.

The gesture symbolizes a major, if simplistic, tenet of Dengism: Unabashedly encouraging 1.1 billion Chinese to become rich is the best way to modernize China and sustain Communist Party rule.

Nearly three years after the June 4, 1989 massacre of protesters in Beijing unleashed a conservative backlash, Deng is campaigning hard to revive reforms at this year's pivotal 14th party congress.

"Reform and opening are the only way out. Not reforming is a dead end," Deng was quoted as saying in south China. Opposition, he said, will not be tolerated.

Echoing Deng, Chinese leaders and the state-run media are calling for "urgent" reform, an end to ideological "dogmatism," and even the development of "a capitalist economy ... as a useful supplement to the socialist economy."

Yet even if Deng manages to overcome strong opposition and put economic reforms back on track, his effort may be too little, too late, Beijing-based diplomats and scholars say.

Deng's vision of China's modernization is marred, they say, by a fundamental contradiction: A market-driven economy is ultimately incompatible with Marxism and harsh political control. According to Deng, both are needed to keep the Communist Party in power.

The dilemma is perpetuated by the refusal of Deng and a handful of other revolutionary veterans to give up power. A weak successor generation will find it harder to break with the old guard's legacy, they say.

"There is a basic contradiction between the goals of economic construction and those of political control. But the party will continue to pursue this contradiction to try to stay in power," an Asian diplomat says.

With no immediate alternative to the Communist Party, China will probably undergo several years of political stagnation, diplomats and scholars say.

Chinese are unlikely to rise up if the current regime can sustain economic growth. Instead, central authority will slowly erode as provincial officials, wealthy private businessmen, and other groups empowered by reform disregard Beijing's dictates, they say.

"There is no clear policy that the leadership can follow to restore its control over wayward provinces and regions," a Western diplomat says.

Deng's tour last month of China's thriving Guangdong Province illustrates both the achievements and contradictions of his 14-year-old rule, as well as the emerging succession crisis.

Nowhere in China has Deng seemed to have a Midas touch more than along the booming southern coast of Guangdong. The brash Cantonese have risen from backwardness to become China's richest citizens since 1980, when Beijing began dismantling Mao Zedong's communes and reviving family farming and private enterprise.

Despite clear successes, uncertainty continues to overshadow the reforms.

Deng's support for Marxist precepts like state ownership puts reform on a weak theoretical footing. Reform is a blind, trial-and-error process, like "groping for stones while crossing a river," Deng says.

As a result, vital experiments with stock markets, price deregulation, and bankruptcy are vulnerable to attack by party ideologues.

Similarly, Deng's backing for one-party dictatorship has undermined efforts to build a less corrupt and more efficient system of rule by law. Without such institutional guarantees, Chinese can neither fully trust the free market nor adequately protect their new, hard-won wealth.

All Deng can do to assure Chinese that his reforms endure is to personally reiterate his policies, as he did in Guangdong last month. Yet even this gesture underscores a weakness of his regime: "Men rule, not the law," as the Chinese saying goes.

Deng's decision to step out of official retirement and into the limelight to bolster his reforms also demonstrates why China faces its worst succession crisis since Mao's death in 1976.

The final arbiters of power in Beijing today are a handful of revolutionary veterans, with Deng a tentative first among equals.

The veterans include President Yang Shangkun, conservative economist Chen Yun, and hard-liners such as Vice President Wang Zhen, Bo Yibo, Peng Zhen, and Li Xiannian.

Jealous of each other's power and accustomed to lifetime rule, these veterans are reluctant to yield to the younger technocrats who now manage China's day-to-day affairs.

The younger leaders, obliged to defer to their elder patrons, face difficulty building the independent power bases in the party, government, and military that are vital to securing their positions.

Even Deng's annointed successor, party chief Jiang Zemin, has failed to muster significant backing and is likely to prove a transitory figure in Chinese politics.

As veterans compete to promote prots from within their factions, independent-minded leaders are unlikely to emerge at this year's 14th party congress.

Instead, compromise figures like economic planner Zou Jiahua are expected to outnumber controversial reformers like Vice Premier Zhu Rongji, who is backed by Deng.

Potentially the most important outcome of the congress would be the promotion to the party Central Committee of several offspring of China's elder leaders, diplomats and Chinese sources say. Many veterans seek to ensure their legacy by installing relatives.

Known to many Chinese as "crown princes," the offspring include: central banker Chen Yuan (son of Chen Yun), Beijing tourism chief Bo Xicheng (son of Bo Yibo), corporate manager Wang Jun (son of Wang Zhen), and Fuzhou party secretary Xi Jinping (son of Xi Zhongxun).

Thanks to their family connections, the "crown princes" already enjoy political influence and prestige that extends well beyond their current positions.

"The older generation basically trusts them. These people have more than a little power," one Chinese source familiar with the crown princes says. The princes use family ties to advance policies they favor and participate in decisions on a wide range of issues including foreign affairs, says the source.

The up-and-coming offspring are known to have ideas that differ substantially from the orthodox Marxism of their elders. None, however, is believed to oppose strong-arm party rule.

Chen Yuan is linked to a group of neoconservative intellectuals who advocate replacing the party's revolutionary creed with a combination of nationalism, Confucianism, and Western philosophy. Yet this unorthodox theory, like the "new authoritarianism" promoted in 1988 by then-party chief Zhao Ziyang, would maintain dictatorial powers for party leaders.

Facing no evident revolt from within its 50 million-strong ranks, the party also confronts no well-organized outside opposition.

Chinese people have tolerated political repression for centuries. In the near term, as long as the economy remains afloat, a repeat of the nationwide protests of spring 1989 is improbable.

Even Chinese intellectuals jailed for months for their role in the democracy movement say they see no ready substitute today for party rule.

"Democracy must begin from within the party," a released Chinese political prisoner says.

Instead, many analysts believe the party's authority will gradually wither, or be transformed, as new interest groups and private aspirations unleashed by Deng's reforms continue their irreversible rise.

"Chinese people over 40 all went through [Mao's radical 1966-76] cultural revolution. They suffered so much from social chaos; they all want stability," says a middle-aged Chinese official who sympathizes with the 1989 protests. "It doesn't mean the people don't want democracy, but it must come step by step."