China Deng Consolidates His Gains

By Amy Wilentz

China's Communist Party turned 65 last week, but it was not an altogether happy birthday. The celebration came in the midst of a heated debate among party factions over the progress of the reforms launched under Paramount Leader Deng Xiaoping, 81, to introduce free enterprise into his nation's economy. In the Chinese press, the openness and variety of criticisms leveled at the party over the past two months have been breathtaking. "The only area that is effectively barred from discussion," said one Western diplomat, "is the party's right to rule."

At the center of the debate has been the drive to extend the economic revolution from the countryside to the cities. Moves like the sudden dropping of price controls have put unwelcome stress on household budgets. Food prices soared by a previously unheard-of 30% last year, and the overall inflation rate jumped to 9%. Meanwhile, opportunities for increased wealth have created fertile ground for corruption. Bureaucrats have taken kickbacks from enterprises in return for supplying them goods at subsidized prices. The products are then resold on the open market for hefty profits. Other officials have installed family members in businesses that then arrange lucrative deals through party connections. Practices like these have helped sour many Chinese on the reform program.

A political backlash has been under way as well. Conservatives, many of them older party members in powerful jobs, resented their loss of control over ! the economy. They were not pleased when Deng forced their colleagues into retirement and replaced the retirees with young reformers. During last spring's annual National People's Congress, the opponents of reform made a determined stand. They persuaded the session to call for a period of "consolidation," during which no major economic reforms would be undertaken.

Reformers also encountered setbacks in the arts. Control over China's occasionally innovative film industry passed last January from the Ministry of Culture to the Ministry of Radio and Television, a conservative bastion. Authorities yanked a Peking play about youths who suffered because of the Cultural Revolution. Yet they allowed audiences to see a satirical work called Rubik's Cube that lampooned various aspects of Chinese life. Faced with criticism on so many fronts, reformers launched counterattacks to keep their revolution rolling. Premier Zhao Ziyang's State Council issued new regulations urging plant managers to establish direct links with their customers and suppliers in order to skirt the ponderous Chinese bureaucracy. Peking also promoted public debate over whether state enterprises should issue stock and how to encourage investment capital.

Deng's allies have seized upon the 30th anniversary of Mao Tse-tung's infamous 1956 Hundred Flowers campaign to urge intellectuals to produce new ideas. Still, many Chinese are understandably leery of the Double Hundred campaign, as it is called. They have not forgotten how Mao first lured scholars into exposing their views--"Let a hundred flowers bloom, let a hundred schools of thought contend"--and then purged those who opposed his policies. One victim of the 1956 campaign was Writer Wang Meng, whom Mao purged as an "antisocialist" and sent into internal exile for 24 years. Deng's new Minister of Culture: none other than Wang Meng, who was appointed last month.

Meanwhile, the effects of reform on Chinese society remain visible everywhere. In Canton, where images of leaders once glared down from huge posters like George Orwell's Big Brother, the atmosphere seems daily to grow more relaxed. Long gone are the drab blue Mao suits that made crowds look as if they had just rolled off an assembly line. Both men and women now sport colorful ensembles. In Peking, so many new streets, businesses and hotels have cropped up that a veteran U.S. China hand, recently returned after a three-year absence, was often literally lost.

| Despite considerable challenges, reform has made inroads into China's economic and cultural existence that will not easily be reversed. The Reagan Administration, pleased with Deng's open-market programs, believes that the Chinese leader is paving the way for successors who will follow his initiative. "The process is two steps forward, one step backward," says one official. Indeed, some China watchers view the fitful nature of Deng's revolution as a reflection of the age-old Chinese tension between the drive to modernize and the tendency to shore up traditional values.

"Constant readjustments are required to appease both sides," says Martin Lasater, director of Asian studies at the Washington-based Heritage Foundation. The current period of consolidation, U.S. analysts believe, is necessary to keep reform on a steady course and prevent the newly stimulated economy from overheating. Noted an editorial in the People's Daily on the party's 65th birthday: "It is unrealistic to seek reform without obstacles and risks."

With reporting by Richard Hornik/Peking