China's Hardliners Consolidate Their Hold

CHINA'S leadership shake-up marks a victory for conservative champions of a command economy at the cost of the country's invigorating, market-oriented economic reforms, according to analysts. The new, top-level lineup shows that the political crisis that climaxed in the June 3-4 Beijing massacre has compelled senior leader Deng Xiaoping to disown his former allies-in-reform and concede more power to veteran leaders who are averse to a rapid easing of state economic controls, say Chinese analysts and Western and Asian diplomats.

In leadership changes announced Saturday, Mr. Deng ousted bold reformer Zhao Ziyang as Communist Party leader and elevated three allies of the conservative old guard to the politically paramount Politburo Standing Committee.

Mr. Zhao, Deng's former heir apparent, was blamed for dividing the party by backing a popular movement in which hundreds of thousands of university students and common Chinese rallied for basic freedoms before a crackdown on June 3.

Jiang Zemin, named as the new party general secretary, and the two other new members to the standing committee, are viewed as supporters of the prudent, gradual economic reforms advocated by most veteran leaders.

The shake-up indicates that Beijing will tackle severe political and economic turmoil by reviving orthodox socialist methods rather than enacting changes patterned on the systems of capitalist democracies, say the analysts and diplomats.

``Since purging Zhao, Deng has had to make compromises with his old comrades, and so we've seen a sea change away from bold reform and toward the old socialist ways that brought stability and stagnation,'' says an Asian diplomat on condition of anonymity.

In a statement Saturday by the party's Central Committee, China's leadership reaffirmed its commitment to the decade-old policy of economic reform and contact with foreign countries.

However, state-run radio reported that the leadership said such changes will come ``after rectification and improvement,'' buzzwords for a program that has either reversed or shelved most economic reforms in a largely unsuccessful effort to halt runaway inflation.

During the 10-month-long economic retrenchment, Beijing has sharply reduced capital spending, renewed price controls on several commodities, and all but ruled out profound reforms such as private shareholding.

By severely cutting back on investments, Beijing has threatened China with a combination of low growth and high inflation - or stagflation - that could further discredit reform, according to economists in China and overseas.

In another possible setback for enlivening changes in the economy, the leadership is likely to purge innovative agents of reform and advisers to Zhao within the government and state think tanks, the analysts say.

As part of the purge, the party has pledged to eradicate ``bourgeois liberalizations'' or democratic values. The scheme appears to signal that with the removal of Zhao, the party has also banished any tolerance for the yearning for freedom on the part of students and workers. Zhao and his associates, including Hu Qili, reportedly sought to compromise with liberal activists. Mr. Hu was also ousted from the standing committee.

``It is necessary for us to take serious and effective remedial measures to step up the struggle against bourgeois liberalization,'' said an editorial yesterday in the party newspaper People's Daily.

During the initial foray of the political struggle, police have arrested more than 2,000 liberal activists. The state has also executed 10 people connected with disturbances arising from pro-democracy demonstrations or from the state's violent efforts to halt the rallies,

In recent years the new general secretary, Mr. Zemin, has tried to reconcile the party's seemingly contradictory aims of allowing economic freedoms under reform, but denying the popular, liberal political aspirations that accompany these freedoms.

As mayor of Shanghai from 1985-87, the Soviet-trained engineer warmly welcomed foreign investment and technology, but not foreign liberal ideals. And as the director of the party's Shanghai chapter since 1987, he used ideological exhortation and administrative controls and kept recent pro-democracy demonstrations smaller than rallies in Beijing and similar rallies in Shanghai in the winter of 1986-87. Jiang is said to be married to Li Xiannian, a hard-line veteran.

Most recently, he purged the editor of the World Economic Herald, Qin Benli. Mr. Qin had published reports in China's boldest newspaper that implicitly criticized the party.

Although Jiang is viewed as a pragmatic supporter of gradual reform like other members of the standing committee, he is too firmly tied to socialism to enact the creative policies to buoy the economy, according to a Chinese University professor, speaking on condition of anonymity.

Song Ping, another new member of the standing committee, is considered a cautious, socialist technocrat also unlikely to advocate dramatic economic changes. Before joining the standing committee, Mr. Song headed the party's organization department, a powerful planning body controlled by conservative hardliner Premier Li Peng.

The third new member to the six-member committee, Li Ruihuan, has proven as mayor of Tianjin to be an inspiring leader. But he has given no indication he would devote his charisma power toward advancing significant reforms in politics or the economy.

Trained as a carpenter, Mr. Li won the praise of senior leaders for smoothly managing the construction of housing and other large public works projects, including Mao Zedong's mauoleum.

With a simple, practical education, however, Li lacks the broad theoretical outlook needed in a reformer, analysts say. Li's mentor is reportedly Peng Zhen, another aging conservative leader.