Despite global turmoil, China continues to plan stock market experiment. Marxist finger-pointing at `degenerate capitalism' curbed by Peking's own moves toward system of share ownership

The plunge of stock prices worldwide adds poignancy to the Marxist prediction of a ``crisis in capitalism,'' but China's Communist leaders show no signs of being smug. The state-run television has prominently covered the record price pitches on bourses from Wall Street to Sydney. It has focused particularly on selling at the free port of Hong Kong, which will come under the control of Peking's socialist government in a decade.

The official New China News Agency also repeatedly ran a dispatch yesterday about a distraught shareholder in Miami who shot and killed a brokerage manager and critically wounded his broker before killing himself.

The frenzied scramble from stocks ``is a result of the casino economy practiced by the United States,'' the government-run China Daily quoted a senior Chinese economist as saying last week.

But Chinese leaders at the 13th Communist Party Congress this week have cause not to savor the travails of what they consider a degenerate capitalist system.

China's oligarchs are plotting the future of nine-year-old reforms that have enlivened the economy with market forces, including a fledgling system of share ownership.

The crash of stock values ``will not affect our country's efforts to put through reform using bonds and shares,'' said Gao Shangquan, vice-minister of the State Commission for Restructuring the Economy.

``Bonds and shares are the products of a commodity economy, capitalist countries can make use of these elements and socialist countries can do the same,'' he said.

``The question we have to study is how we can make better use of these elements under public ownership,'' Mr. Gao added.

The comments highlight how much the attitude of China's leadership has changed since the early 1950s, when it closed the Shanghai stock exchange calling it a den of ``decadent capitalist oppression.''

With the call of top leader Deng Xiaoping to build ``socialism with Chinese characteristics,'' Peking opened a tiny bourse in the northeastern city of Shenyang and revived a small stock market in Shanghai last year.

Leaders also allowed three dozen state-owned factories to issue shares to their workers and the public in an effort to raise the productivity of China's most burdensome industrial sector.

However, Peking scuttled this project at the height of a conservative campaign against ``bourgeois liberalization'' in March, demonstrating that share ownership puts the reformers of a socialist economy in a dilemma.

While promoting economic dynamism, stock issues undermine state ownership and allow the financiers that Marx labeled ``exploiters'' to amass wealth based on the labor of others, analysts say.