China's Leaders Vie for Place As Deng's Heir

QUESTIONS about the health of paramount leader Deng Xiaoping have triggered a brisk new round of succession politics in China.

Mr. Deng, the Chinese senior leader who holds no official title, turned 89 yesterday with no public ceremony or appearance. Since Deng was last seen on television on the eve of the Chinese New Year in January, rumors that he is gravely ill have circulated regularly and been denied by his family.

The latest rumors come as the communist hierarchy grapples with a widespread financial crisis and faces new questions over who will succeed Deng.

Last week, Premier Li Peng, sidelined for almost four months with a health problem, resurfaced in a picture splashed on the front pages of most Chinese newspapers. The photograph, showing a grinning, bare-chested Mr. Li in swimming trunks and dark glasses on the beach at a Chinese resort, was described by a Western diplomat as "undignified," and by a Chinese analyst as "shocking."

Political observers say the depiction, reminiscent of those of the late Mao Zedong swimming in the Yangtze River to show vitality, is aimed at announcing Li's return to the political fray.

The prime minister, a hard-liner widely hated for imposing martial law and urging the military suppression of pro-democracy protests in 1989, is believed to have lost political ground during his long recovery from what was unofficially reported to be a heart attack.

After only two brief public appearances in recent months, Li is expected to return to formal duties in a few weeks to meet visiting prime ministers from Thailand and India. His return coincides with reports that Communist Party conservatives are reasserting their ideological influence in the face of a major economic retrenchment under way.

In a manner that some analysts say is a reversion to the methods of the command economy, reform-minded Vice Premier Zhu Rongji was forced to heed the conservatives and impose austerity measures in July to rein in runaway inflation and rampant financial speculation. These actions have catapulted Mr. Zhu, a Li rival, into prominence.

Mr. Zhu, China's economic troubleshooter who has taken on new responsibilities during the economic crisis, is starting to reap political dividends. The government reported last weekend that industrial output eased in July compared with the previous month, capital construction and commercial building investment cooled, but retail sales rose. The State Statistics Bureau said the results showed the economy was moderated without stunting growth. Complex succession

Still, Zhu's measures to control inflation of 20 percent or more in major cities have yet to take hold, leaving the politician still exposed in China's leadership struggle, political observers say. The austerity program announced in July to deal with the economic emergency include a credit tightening, interest rate increases, and a recall of loans for property and stock market speculation.

The reemergence of Prime Minister Li casts some new questions about China's political scene. His absence had prompted some expectations that he would be replaced by Zhu, his more charismatic deputy.

The screen of secrecy behind which the Chinese communists live makes it difficult to project a future leadership lineup for the country. Some Asian diplomats see a troika emerging, including Zhu, president and Communist Party secretary Jiang Zemin, and Qiao Shi, the mysterious head of the National People's Congress, China's nominal parliament.

Last weekend, Mr. Jiang, who also serves as chairman of the Central Military Commission, unveiled a new national campaign against corruption among party and government cadres, which is blamed for eroding economic reform and communist control and stirring public anger. Like Jiang and Zhu, Mr. Qiao has emerged in the top echelons of Chinese politics from the party lineage in Shanghai. Recently he has assumed a higher profile in traveling abroad and within China. Qiao, the one to watch

Qiao is believed to be close to the reform-minded Zhu, although he is seen as less controversial. While Jiang is expected to preside over a post-Deng transition, many Western and Chinese analysts predict the president lacks the staying power to emerge as China's new supremo. That could fall to Qiao, who would be acceptable to all factions.

"He is the man to watch," says a Chinese political observer. "He would be the compromise candidate and acceptable to all sides."

How this plays out can still be shaped by Deng, Chinese and Western analysts say. Although the senior leader is obviously failing, his mystique is still influential in the imperial tradition of Chinese politics. When he last appeared on television in January, Deng took only a few small steps and waved weakly.

Since emerging as the preeminent leader since Mao's death in 1976, Deng has discouraged the cult-like adoration of Mao, although Mao's political slogans are still widely quoted.

To coincide with Deng's birthday, many Chinese newspapers have begun publishing excerpts of a new biography by Deng Rong, the leader's daughter. The book, part of a two-volume biography, mainly deals with his early life and will be distributed in September.