The Rise of China's `Princelings' Fuels a Bitter Succession Battle

IN a power struggle that may decide China's future after Deng Xiaoping, two factions within the Communist Party are drawing battle lines over control of the nation's economic reforms.

Supporters of Mr. Deng's reforms have fanned the leader's popularity and moved to crack down on challenges to economic liberalization. But an emerging corps of young party conservatives - many the children of senior hard-line leaders - is bidding for power in a transitional China.

Three events last month underscore this struggle:

* The conservative political monthly In Search of Truth was criticized for its direct attacks on China's economic liberalization and innuendos about ``reform architect'' Deng. The magazine has been scheduled to shut down by year's end.

* Yu Xiguang, a liberal political scientist at the Beijing Central Party School, was detained for editing a book supporting market-style reforms, but which revealed embarrassing compromises Deng made in the past to placate the late Chinese leader Mao Zedong and party hard-liners.

* The opening of the China Academy for Research in Reform, a liberal think tank backed by Deng, was shelved because it promoted speeding up market changes in a still partially socialist China, Chinese analysts say.

The group of so-called ``neoconservatives'' has increasing influence over China's senior leadership, Chinese analysts say. With pedigree, connections, youth, and Western educations on their side, these ``princelings,'' as they are known among educated Chinese, support a market economy so long as it does not create challenges to the Communist Party's supremacy.

Contrary to Deng's exhortations to remove the party from the day-to-day operation of the economy, these conservatives urge more party involvement and are moving to carve out individual personal fiefdoms.

The conservatives have gained ground, Western diplomats contend, because the party is beset with corruption, economic woes, popular discontent, and lacks a commanding replacement for the apparently fading Deng Xiaoping.

The young, Red capitalists include Chen Yuan, deputy governor of the central bank and son of socialist economic czar and Deng nemesis Chen Yun; hard-line Premier Li Peng's son, Li Xiaoyong; Chen Xiaoxi and Chen Xiaotong, sons of hard-line Beijing Communist Party boss Chen Xitong; and Pan Yue, whose father Liu Huaqing is an influential Army general.

``There's a good possibility that China will become a crony eco-nomy like those elsewhere in Asia and Latin America,'' predicts a Chinese former newspaper editor.

``This elite wants to keep enough economic power in party hands to prevent the development of private capital and the emergence of a middle class that could challenge party supremacy,'' he adds.

Hard-liners claim conservative Marxist ideologue Deng Liqun as their guru and command a growing voice in the Chinese media, which is ruled by either hard-liners or advocates of central planning and control from Beijing.

Deng Liqun presides over a well-funded think tank called the Contemporary Chinese History Research Institute as well as seven conservative intellectual journals in Beijing.

He is believed to be instrumental in publication of a best-selling conservative polemic, ``Viewing China Through a Third Eye,'' this year and is reportedly readying another volume, Chinese analysts say.

Observers allege that he also instigated a series of articles printed by In Search of Truth that led to the ban on the monthly.

Charging that market reforms are fueling corruption, the journal attacked party liberals for ``ignoring or failing to notice the protracted nature, complexity, and difficulty of the anticorruption struggle and saying that everything can be solved once a market economy has been established.''

Jiang Zemin, whose wealth of titles as president, party general secretary, and chairman of the Central Military Commission position him as Deng's heir apparent, is scrambling to boost what many analysts say is only a tenuous grip on power within the Communist Party. During a meeting of the party leadership in late September, Mr. Jiang, a former mayor of Shanghai, promoted several cronies from China's largest city. The moves were seen by analysts as the marshaling of a loyalist phalanx about the aspiring leader.

Still, the conservative challenge is fueling party disarray and government paralysis. Economic reforms have slowed while the government, at the risk of further boosting already soaring inflation, ordered new subsidies last summer to keep state enterprises afloat. Fearing unrest after Deng's demise, security has been tightened in recent months, and three high-profile dissidents in Shanghai were sentenced to three years in labor camps for their pro-democracy campaigning.

Deng Xiaoping's children and their controversial businesses have also become targets of attack in Beijing's political rumor mill, while an influential military aide of Deng, Wang Ruilin, has been criticized in conservative publications.

To counter conservative criticism, Deng relatives and allies have tried to whip up a personality cult that he has condemned and resisted in the past. Although pale in comparison to the popular frenzy for the late Chairman Mao, the campaign has featured numerous articles about Deng's achievements, a special photographic exhibit for China's National Day, and the issuance of books and a special compact-disc set of the leader's speeches.

Major Chinese universities have also set up special Deng centers as part of ``the upsurge whipped up in colleges and universities in studying the `Selected Works of Deng Xiaoping,' '' the official New China News Agency reported.