Chinese Hold Firm Against Reform Moves

CHINA'S leadership on Tuesday hailed as a ``great, historic victory'' its crushing of last spring's democracy movement, vowing that any attempt to overthrow Communist rule in China would fail. In a speech at the opening session of China's nominal parliament, Premier Li Peng upheld the political dictatorship, revival of Maoist orthodoxy, and reassertion of central economic planning promoted by the country's hard-line leadership.

Mr. Li, who signed the martial law order last May that preceded the assault of troops and tanks on Tiananmen Square June 3 and 4, said quelling what he termed a ``counterrevolutionary rebellion'' was one of the governments' top achievements of 1989.

Li called on each citizen to shun ``chaos'' and treasure political stability ``as he would his own life.'' A government spokesman Monday dismissed rumors that Li might be replaced during the legislative session. Party leaders apparently believe Li's removal would be tantamount to an admission that the June crackdown was a mistake.

Few significant personnel changes are expected during the 15-day session of the National People's Congress, a rubber-stamp body filled two-thirds with Communist Party members.

Chinese patriarch Deng Xiaoping will retire from the his last post, that of chairman of the virtually powerless state military commission. Deng is expected to be replaced by party general secretary Jiang Zemin, his designated heir. Vice Premiers Yao Yilin and Wu Xueqian may also step down.

Reflecting the bafflement and alarm of China's leaders over the rapid demise of communist regimes in Eastern Europe, Li described the international situation as ``turbulent.''

While asserting that Beijing will continue its open-door policy and maintain ``normal relations'' with all countries, including those in Eastern Europe, he stressed that China must fight subversion from abroad.

Stressing the allegiance to communism of China's orthodox Marxist leadership, Li pledged that ``come what may, socialist China will stand rock firm in the East.''

The government should step up ideological education among citizens while promoting ``communism, self-reliance, hard work, [and] revolutionary traditions,'' he said.

Li announced an easing of a tight-money policy that since September 1988 has thrown China into a recession, leading industrial output to plummet, unemployment to skyrocket, and forcing thousands of factories to shut down nationwide.

Admitting that economic stagnation had ``aroused the concern of the whole society,'' Li announced a relaxation of controls on the money supply, an easing of credit and lowering of interest rates, along with an increase in state investment.

However, Chinese economists predict the widely anticipated loosening of austerity measures could cause a new surge in inflation, repeating a boom-and-bust cycle that has plagued China since the early 1980s.

Li's report emphasized a continued reassertion of central planning and state controls over the economy.