Is the genie out of China's bottle?

THOUSANDS of university students have been demonstrating in China in recent weeks, and, whatever the short-term outcome, the long-term impact may be very great. They have been asking for reform and movement toward more democracy in China. Despite a few wayward incidents, the protests appear to have been rather orderly. There was none of the anarchy that accompanied the Cultural Revolution, for instance.

In response, the authorities also seem to have been rather restrained. Western television cameras and reporters were on the scene and captured no scenes of police brutality. Of course, police photographers took pictures of all the leaders of the protests, and it may be that once those student leaders are out of the spotlight, they will be quietly rounded up and dispatched to a life of remote detention.

Some demonstrators were arrested, but were just as quickly released. Had the police and military been under orders to get tough, they could surely have been more effective in beating back the protest movement.

The way the protests were handled may be an indication of some confusion and division over the whole affair in the topmost ranks of the Chinese Communist Party's bureaucracy.

Some Chinese officials are not averse to a little loosening up in the direction of social progress. But others fear that taking a few experimental steps down that road may ultimately lead to the end of party control. A little democracy may be all right, but nobody in the Peking hierarchy has any enthusiasm for abandoning communist rule. That has led some Chinese officials to talk of ``socialist democracy'' - democracy within a guaranteed communist framework. Others know that it is a contradiction in terms.

China's leader, Deng Xiaoping, has pressed vigorously for economic reform and technological progress in China and has imposed his will successfully on those more cautious members of the bureaucracy who have been doubtful. It is Mr. Deng who has accelerated China's opening to the West, seeking sophisticated Western equipment and the expertise to use it to move China into the 20th century.

Some years ago I was chatting with a Chinese friend, a medium-level official in the Chinese government. ``You realize,'' I said, ``that by embracing Western technology, you will inevitably be opening the door in China to everything that is good and bad in the West, from democracy on the one hand to drugs and moral standards on the other.''

``We know that,'' he replied, ``and understand that. But we have no alternative. It is essential that we move forward with the economic development of our country.''

And so thousands of Chinese students have come to the United States and Western Europe and have been exposed to a variety of new ideas, and some of those ideas are flowing back into China.

Can China reach out to the West, introduce more economic freedom at home, yet escape the political change that is inspired by contact with the outside world?

Extraordinary change has already taken place in China since I first visited it in 1972. But because the distance China has traveled is dramatic, one should not be deluded into thinking it has thrown off all its shackles.

Although there is a lot more openness, China is a kind of half-free country. Ronald Reagan, that old friend of Taiwan and foe of Communist China, can comfortably do business with the current regime in Peking. But China has not yet embraced democracy, nor, despite the recent student demonstrations, is democracy just around the corner.

Even those forces within the government that are for modest change face entrenched bureaucratic opposition. For example, although China's acquisition later this century of the British colony of Hong Kong might seem desirable to the entire Chinese leadership, some fear it. Their concern, incredibly, is that China, with all its millions of people, may become ``Hong Kong-ized'' by the vigorous little free-enterprise community on China's rim.

Such entrenched conservatism cannot be lightly dismissed.

What does seem clear is that while Chinese student demands for democracy will not get instant implementation, the ferment that swirls under China's surface cannot be subdued.

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