China searches for new ways to fill over a billion rice bowls

By , Staff correspondent of The Christian Science Monitor

When foreign visitors ask Deng Xiaoping how long he expects the economic and political reforms he has inaugurated to last, China's senior leader usually chuckles and says he is not surprised at the question.

''Over and over again, Chinese ask the same thing,'' he says.

Then Mr. Deng, salty and gravelly-voiced as ever, explains why he believes that despite China's past record of zigs and zags in policy, the economic incentives and opening to the West identified with his name will endure.

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Basically, Deng says, these reforms respond to the demands of the vast majority of China's more than 1 billion people after the ultraleftist anarchy of the Cultural Revolution (1966-76). What he does not say is that, in the years when Mao Tse-tung was alive, the prestige and power of the founder of the People's Republic were so great that he could repeatedly override the popular desire for stability and predictability with frenzied revolutionary campaigns. Mao's ego might be satisfied thereby, and those of the ''gang of four,'' but no rice bowls were filled.

Seven years have passed since Mao's death and the arrest of the ''gang of four'' headed by Mao's widow, Jiang Qing. Deng was out of power at the time of the arrest, and it has taken him most of these seven years, first to win and wield power, then to eliminate or neutralize opponents of his reforms like former Communist Party Chairman Hua Guofeng.

At various moments during these years, Western observers believed Deng had suffered setbacks and was being forced to make compromises.

But the recent National People's Congress showed that, step by step, sometimes bold, sometimes cautious, Deng and his associates have advanced toward their goals. These are first of all to bring normalcy and the rule of law in party and government, and second to mobilize all the nation's energies to achieve the task of economic modernization within this century.

Today, for the first time since the Cultural Revolution, China has a president, Li Xiannian; a vice-president, Ulanfu; and a National People's Congress with expanded constitutional powers and headed by an active chairman, Peng Zhen. Deng himself is chairman of the Central Military Commission. These are all government positions with five-year terms.

In short, after a period of transition following the pseudo-revolutionary structures of the Cultural Revolution, China is again a normal state with a normal constitution and normal structures of government. The Communist Party rules, but within the framework of law.

There is endless argument, privately among Chinese and publicly among foreign friends and foes, as to whether Deng and his principal associates - General Secretary Hu Yaobang and Premier Zhao Ziyang - can achieve their goal of economic modernization while retaining what they insist they will never abandon: the dictatorship of the Communist Party and the Marxist-Leninist-Maoist road to ''socialism'' - in other words, communism.

That is a question that vitally interests the United States, Japan, and other Western powers basically wishing well to China's modernization plans and expecting to benefit thereby. There is simply no precedent for modernization on a scale as vast as that of China, with its 200 million city dwellers and its 800 million peasants. Many observers fear that as contradictions grow between the need for giving enterprises and regions greater freedom of action and the continued demand for central planning, there may be great temptation to return to the Stalinist model of the 1950s.

China's planners know the Stalinist model was inefficient and wasteful, but they also know that it does enable the central authorities to retain unquestioned control.

Take bicycles. Last year, according to the state statistical bureau, 24.6 million bicycles were produced, or 38 percent more than in 1981. How many of them were in fact usable? The most popular brands are Phoenix and Everlasting from Shanghai and Flying Pigeon from Tianjin. These enjoy nationwide reputations for durability and good looks.

But when decentralization first got under way, each province and city in China rushed into making bicycles, along with other light industrial goods. The consumer was assailed with a plethora of unfamiliar brand names. Because the price of bicycles, along with the price of most everything else, is controlled by Peking, new, unfamiliar brands could not compete with established brands by offering cheaper prices, except within a very limited range and even then often under the counter. Nor could the much-desired Phoenix or Flying Pigeon brands charge more, although customers would gladly have paid premium prices.

Thus, on the one hand, cities and regions going into bicycle production for the first time tried to shut out well-established brand names from elsewhere by administrative means, forbidding stores under their jurisdiction to accept bicycles from outside. On the other hand, the already existing black market in desired brand names was intensified. In most places, consumer resistance won out over administrative fiat, the result being that on one hand customers rushed desperately to buy a few highly desired brands, while a large number of other brands piled up in factories and warehouses.

What is true of bicycles is also true of sewing machines, of washing machines , of electric fans, of television sets - of a long, long line of consumer goods which province after province jumped into making, expecting to reap great profits. In some cases, the hopes have been justified. In too many, the result is merely investment in second-class plants and equipment which could much better have been spent on a first-class investment elsewhere.

There are indications in Premier Zhao Ziyang's and Vice-Premier Yao Yilin's reports to the National People's Congress that the central government will crack down hard on this type of duplicatory, wasteful investment. To that extent it will be reasserting central control.

At the same time, central planners know that unless they can spark the enthusiasm of local authorities and enterprises, modernization is not likely to succeed. Each province and most cities face serious problems of finding employment for the middle school and high school graduates who each year reach working age and who, according to the communist system, should have jobs ''arranged'' for them by the local authorities instead of seeking jobs themselves in a free labor market. Every city and every province is crying for new industry, which means more jobs for their inhabitants. This is a real and deeply felt need which the central authorities ignore at their peril.

In general, the economic incentive policies had their first big success in the countryside, and the countryside today remains one of the most encouraging features of the changes brought about since Deng and his associates came to power at the third Central Committee plenum in December 1978.

Everywhere one goes in rural areas one sees new houses of mud or brick, sometimes with lovingly carved animals and tutelary deities on the roof, as in the days of prerevolutionary China. Private enterprise flourishes, with many peasants leaving farm work to become peddlers or haulers. Tractors are much more frequently used to transport goods than to plow fields, and many of them are now privately owned. The kind of commune or production brigade, which used to summon members to work with drum or bell each morning and afternoon, is becoming a relic of the past. Deng's new ''responsibility system'' means that many families cultivate their own fields at their own risk and costs, the only communal obligation being to meet the state's quota for grain and the village or cooperative requirements for social expenses - schools, welfare cases, emergency funds.

Decentralization was a good thing for China and released hitherto frozen local energies. But central authorities failed to realize that each province and prefecture would, in its own area, act like little Pekings, masters of their own fiefdoms, fighting the products of other provinces not on the basis of letting the customer choose what he preferred, but as if each possessed absolute powers within its own jurisdiction. The great industrial cities and ports of Shanghai and Tianjin, shut out of former markets inland, fought back by holding up shipments from abroad destined for these inland provinces.

Ultimately, central planners want provinces and central ministries to get out of the business of running industrial enterprises, leaving this function to counties and to municipalities while provinces and central authorities concentrate on taxing the earnings of these enterprises. This again is a major reform and can only be practiced step by step.

People at the very top, like Premier Zhao or Vice-Premier Wan Li, are pragmatists who constantly insist that ''practice must be the criterion of truth.'' The statement is not unconditional. In China, practice must remain within the framework of Marxism-Leninism-Maoism, an ideology that is defined with less and less precision these days but that still inhibits innovation. Last year economic planner Chen Yun described the difference between the market economy and the planned economy in the following terms:

The market economy, he said, was like a bird, and the planned economy the cage around it. If the cage is too small the bird will have no freedom of maneuver. But the cage itself is absolutely necessary.

Below China's top echelon of leaders are central and provincial bureaucrats, much more limited in horizons and in experience, much more fearful of making mistakes, and much likelier to remain immobile or to move with inchworm slowness. They know how to survive, but little else. This is the echelon that recently has come under greatest pressure from the central authorities to shape up or move out. ''There is never any overt coercion,'' said one Chinese observer , ''but the pressure has been constant and relentless.''

'' 'What are your plans for rejuvenation, for promoting people with professional qualifications?' an emissary from the party's Organization Department will say to the party committee of thus and such a bureau,'' the observer recalled. ''When you keep getting that kind of message every 10 days or so, after a while it starts to wear you down.''

All in all, the modernization program is moving ahead. But a final verdict as to whether or not it will prove successful depends on how flexible, how adaptable, how innovative those charged with carrying out the program prove to be.

What relevance do these domestic aspects of modernization have to China's external relations, particularly to relations with the US and Japan? China is stepping up the pace of joint ventures with Western enterprises, and American companies are engaged in several large-scale projects, as well as being active in bids for offshore oil exploration.

China is stepping up the pace of joint ventures with Western companies, and American companies are engaged in several large-scale projects exclusive of offshore oil. The US oil company Atlantic Richfield is already exploring actively its concession off Hainan Island, while Occidental and Exxon (the latter in a consortium with Shell Oil) have recently won contracts for promising offshore areas. American Motors has an agreement with the Peking Motorcar Company to produce Jeeps. Occidental Petroleum is committed to excavating what will be the world's largest open-cut coal mine, in Pingshuo, Shanxi Province, in north China. Boeing and McDonnell-Douglas have both sold aircraft to the Chinese. Many other joint-venture agreements of various shape and size have been or are about to be signed.

Contradictions between Peking and the provinces, between the enterprise and the organization to which it reports, show up repeatedly in the process of negotiating these agreements or in carrying them out. Some deals have fallen through because they were approved by central authorities but not by the authorities of the province or city concerned, or vice versa.

Moreover, the joint-venture agreement brings into the Chinese context a foreign partner, with advanced technology and a different way of treating workers than the old ''iron rice bowl'' concept - the concept that in socialist China every worker once hired has his living assured for life. Perhaps over the years, at least some of the capitalistic practices of the Western partner will rub off on the Chinese, especially if they perceive that its way works and theirs does not. Overall, China is in a learning mood today. As modernization proceeds, it is entirely possible that instead of slipping back into Stalinist monolithic central control, China will experiment the other way, redefining both the theory and practice of Marxism-Leninism-Maoism.

China is experimenting with a number of halfway steps, the customs-free zone of Shenzhen adjoining capitalist Hong Kong being one of them. Shenzhen is where much of the experimentation in joint ventures with foreign partners is going on. The central authorities have also made the decision that the whole country is not going to be able to progress toward modernization at the same rate, and are deliberately encouraging advanced areas like Shanghai and the east coast provinces to modernize at greater speed than inland areas. Of course there will be a backlash from the inland provinces, but the central authorities seem confident it can be contained.

The face of China is changing. In physical looks as well as in ideology, it is a much more mundane, much less sloganeering, and in many ways a less tidy place than during the heyday of Mao Tse-tung. Today's China does not delight purists of any stripe, whether capitalist or communist. But it is is alive and kicking and there is forward momentum. The world can only watch and wish the Chinese people well.

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