THE collapse of Soviet communism has ignited a major dispute among China's leaders over how to safeguard their rule: Push forward market-oriented reforms or revert to Maoist class conflict?The strife between the Communist Party's conservative and pro-reform factions has spilled onto the front pages of China's state-run press since the Soviet Union abandoned communism in August. Sharpening the conflict is a struggle for succession as the leadership prepares for next year's 14th Party Congress, which will elect a new central committee. In a sign of worsening tension, the party postponed until late November a plenary session of the central committee, Chinese sources say. At the heart of the high-level debate is Beijing's growing preoccupation with combatting what it terms "peaceful evolution," or attempts to subvert communism in China by spreading capitalism and liberal ideas. The debate challenges the principles of reforms launched by paramount Chinese leader Deng Xiaoping in 1978. Late that year, Mr. Deng proclaimed the end of Mao Zedong's policy of "taking class struggle as the key link" and gave economic modernization priority over ideology. Deng and his reformist allies argue that only by pushing ahead with reforms and building a powerful Chinese economy can the nation withstand foreign pressure and stave off domestic social unrest. (US secretary of state rebuffed on rights, Page 3.) "Without economic development and prosperity ... there will be no political stability," party chief Jiang Zemin, who is viewed as a moderate, warned in a speech published Oct. 22. Conservatives contend that in order for the party to to survive, it must revert to "class struggle," essentially by indoctrinating citizens to rid China of capitalism, liberalism, and other forces inimical to the working class. Given the unpopularity of "class struggle" among average Chinese, millions of whom were persecuted during Mao's violent 1966-76 Cultural Revolution and earlier radical campaigns, the chance of a wholesale conservative victory appears slim. Although the debate is far from over, reformers appear to have prevailed at a party working conference on the economy in Beijing in late September, Chinese sources say. "All other work must be subordinate to and serve the core of economic construction," President Yang Shangkun, a close associate of Deng, announced in a nationally televised speech just days after the conference closed. "Reform may have risks. We can bear these risks. But if we halt or go back, we will have absolutely no way out," Mr. Yang said Oct. 9 in one of the boldest recent calls for reform. The principle of "taking economic construction as the core" will persist throughout the 1990s, a high-ranking Chinese official was quoted as telling the mainland-affiliated Hong Kong newspaper Ta Kung Pao this month. Conservatives have strongly attacked these plans in recent weeks. Two weeks after Yang's Oct. 9 address, conservatives published a front-page commentary in the Guangming Daily entitled: "In Concentrating Forces on Economic Construction, We Cannot Ignore Politics." "The basic demand for every aspect of the work [of party cadres]" is to "handle problems from the viewpoint of [Marxist] politics," the commentary said. "This requires a consciousness of the struggle between two classes, two systems, and two ideologies [capitalism and communism]," it said. "Class struggle still exists [in China] ... and at times is extremely intense." Blind pursuit of economic gain will lead China ideologically astray and endanger party supremacy, the article warned. Instead, the party must "oppose incorrect thinking and behavior" and step up Marxist indoctrination to prevent officials preoccupied with daily work from "losing direction." As part of the apparently broad-based drive to reassert Maoist orthodoxy, propaganda chief Wang Renzhi has recently drafted a plan for promoting class struggle as a way to battle subversion, one Chinese official said. Justice Minister Cai Cheng asserted last week that Chinese law "cannot be divorced from politics" but must serve as a "class tool" in fighting enemies of the proletariat. And other conservatives such as Vice President Wang Zhen and ideologue Deng Liqun have loudly praised "Mao Zedong Thought" and have called for a "resolute struggle" against "capitalistic reform." Conservative critics could continue to obstruct a revival of economic reforms. Deng's opponents halted market-oriented reforms with a government austerity drive in the fall of 1988 and shelved them after Beijing crushed the Tiananmen Square pro-democracy protests in June 1989. Nevertheless, Chinese officials, party sources, and economists interviewed in Beijing in early November pointed to several underlying factors that may be tilting the balance in favor of reformers: * China's intractable economic problems demand market solutions. More than one-third of China's state-run enterprises are running at a loss, contributing to a state budget deficit that Chinese officials estimate will grow 60 percent this year. * Political support for a faster pace of economic reform is strong among China's provincial leaders, especially in prosperous coastal areas that have benefited from private enterprise, such as Guangdong and Fujian provinces. The provinces vigorously oppose attempts by party hard-liners to recentralize economic decision-making in Beijing and retract powers delegated to localities during the 1980s, the decade of reform. "The provinces are continuing to balk at central policies," a Western diplomat in Beijing says. Deng, though officially retired, retains decisive influence over major policies and personnel changes as the chief mediator between conservative and reformist forces, Chinese sources say. Deng was weakened by the June 1989 crackdown, which saw elder conservatives oust his reform-minded prot, then-party chief Zhao Ziyang. Nevertheless, Deng has prevented criticism of Mr. Zhao from turning into a condemnation of the decade of reforms he orchestrated.