RISKY CHANGE IN A DYNASTY

AT HIS VILLA IN BEIJING, DENG Xiaoping, 91, sits in a wheelchair unable to speak. Sometimes he is shown a document, specially printed in oversized characters. He nods, shakes his head or simply stares. One of his daughters then attempts to decipher his meaning. Years ago, Deng resigned from his official positions and tried to retire, but Chinese tradition and the ethos of the Communist Party conspire to force him to rule, or pretend to rule, until the moment he is pronounced dead. While he lingers, dozens of party elders, senior military leaders, provincial kingpins and Politburo members are maneuvering for influence, and the country and the world watch to see who will lead China’s 1.2 billion people.

At the moment, the man who has the inside track is President Jiang Zemin, who last week held a sort of mini-summit with President Bill Clinton in New York City. Clinton and Jiang talked for two hours at Lincoln Center without reaching any new agreements. But they were determined to demonstrate publicly that Sino-American relations, which have been strained and verging on bad, are starting to improve. White House spokesman Michael McCurry offered a painstaking formulation: Clinton was “confident that we have begun a process that will lead to a series of dialogues that will help improve the opportunity” for better relations.

For Jiang, the most important audience was back in Beijing. He is in day-to-day control of the government, he has accumulated all sorts of impressive titles, but many Chinese and China watchers consider him weak, and he is still looking for ways to present himself as a dominating figure. During the planning for his trip to the U.S. for last week’s 50th anniversary of the U.N., he tried to wangle an invitation for a full-scale state visit to Washington. But the Clinton Administration, mindful of how sour Congress’s attitude toward China had become, invited him to Washington only at the less imperial level of a “working visit.” Jiang balked and ended up settling for the rendezvous with Clinton in New York. Even then there was a last-minute hitch. The day before the meeting, China insisted that it be moved out of the New York Public Library because the building housed an exhibit that included material on the protests in Tiananmen Square in 1989.

State visit or not, Jiang seemed determined to wring all the advantage he could out of the occasion. He tried to put Clinton on the defensive, insisting he was still outraged that the U.S. had granted Taiwan’s President Lee Teng-hui a visa to travel to his alma mater, Cornell University, last June. A Chinese official claimed later that the U.S. “has made it clear to the Chinese side that it has drawn a lot of lessons from the damage it has wrought upon Sino-U.S. relations.”

In part, Jiang’s message was what it seemed: a demand that the U.S. stick to its official “one-China” policy and avoid giving any encouragement to Taiwanese independence. At the same time, Jiang’s denunciations served other purposes. He gained credit with hard-liners in Beijing, especially the military, for stoutly supporting China’s national interests and standing up to the U.S. superpower. More and more, the regime has exploited nationalism to shore up its legitimacy, and this emergence on the New York stage provided Jiang with a fine opportunity to appear as China’s advocate.

Still, it is not at all obvious that Jiang will ever demonstrate that he has the wisdom and strength to govern China under current conditions. The Communist Party has lost much of its authority among the people, who are convinced, as Deng told them, that “to get rich is glorious.” Yet the economy is uneven. It registered 11.8% real growth last year, but the inflation rate peaked above 25%, and more than 40 million people are unemployed, while 100 million others are underemployed. The Chinese feel alienated from the government because of pervasive official corruption and memories of the 1989 suppression of the pro-democracy movement. If the communists are to maintain stability after Deng dies–if they are to ride the tiger, as they put it–then the leadership must find a new way to inspire loyalty and cooperation from the mass of ordinary Chinese citizens.

To meet that challenge, a collective leadership has been formed, with Jiang as “the core,” as Deng himself put it. But once Deng is gone, rivals within the group can be expected to go gunning for Jiang, and he will have to fight to stay on top. Many China experts predict that Jiang will not prevail in an all-out test of strength. The affable apparatchik has been nicknamed Weather Vane because he tends to swing with the prevailing political wind.

Jiang joined the Communist Party in his teens. An electrical engineer, he worked as a factory administrator for 25 years. In the early 1970s he rose through the ranks in several economic agencies and headed the Ministry of the Electronics Industry before becoming mayor of Shanghai in 1985 and party chief in 1989. Last May he attended V-E day ceremonies with 50 other world leaders in Moscow and in July enjoyed a state visit to Germany. On such occasions he is an enthusiastic guest, smiling, shaking hands, chatting in one of his three foreign languages (Russian, Romanian and English), reciting T’ang-dynasty poetry and even quoting lines from the U.S. Declaration of Independence.

JIANG WATCHERS IN BEIJING GIVE him more credit for resourcefulness than many foreigners do. “He has had more than five years to build a power base and has done that methodically,” says a Chinese official. Jiang has advanced his supporters from Shanghai inside the central and regional leaderships and has reshuffled the hierarchies of several provinces to replace old-timers with his own people. He has put close military and police associates into key positions, visited army bases around the country and promoted 19 new generals. He makes so many public appearances that he seems to be campaigning for the jobs he already holds.

If there is one likely future challenger to Jiang it is Qiao Shi, 71, chairman of the National People’s Congress and a member of the Politburo’s inner standing committee. Though the Congress has always been a rubber stamp for the party, Qiao is making a serious effort to turn it into a functioning legislature–and in the process use it as a power base. Some experts believe Qiao has liberalizing tendencies.

Another potential leader is Deputy Premier Zhu Rongji, 67, the country’s top economic official. Tough and able, Zhu is, like Jiang, a former mayor of Shanghai. He is generally popular with the rising class of entrepreneurs, but rampant inflation and the credit-squeezing policies he has used to tame it have created resentment across the country. Premier Li Peng, though he is still a major figure, is a widely disliked hard-liner and one considered unlikely to succeed. But there are other senior officials who might challenge Jiang, and secrecy in Beijing is so thick that some unheralded candidate could easily emerge.

To the outside world, which can do little but observe and speculate, the most important question is not who comes out on top in Beijing but what the winner stands for. All the potential leaders speak up for the continuation of Deng’s reforms and the creation of a “socialist market economy.” But there are differences among them–so far only hinted at–on how fast the country can be freed from the bonds of central planning, how much authority should be devolved to the regions, and how much pain and dislocation the society can take in the process.

All the rivals are preoccupied with the economy. They know their political future depends on sustaining growth and delivering prosperity, but they do not know how to achieve that without overheating the system and shaking up the society. At a party plenum that approved a new five-year economic plan in late September, Jiang seemed to be placing stability ahead of growth, saying, “Without a stable political and social environment, nothing can be done.” He clings to price controls, and he allows banks to discriminate against private enterprises to favor state firms when providing credit.

He has also backed away from his announced intention to close or sell off China’s 100,000 mammoth state-owned enterprises. Half are losing money, and many are unable to pay their workers, who have staged violent as well as peaceful protests in major industrial centers. The problem, a familiar socialist hangover, is that these factories employ about 109 million people and sustain what are essentially company towns, providing housing, education and medical care to their workers.

Instability on the largest scale could arise in the countryside, away from the booming cities and coastal provinces. The 800 million peasants who live in the hinterland enjoy ample food and decent housing but have little cash in a society that is increasingly based on money and consumption. Li Zenghua, an orange farmer in central Hunan province, scrapes by on $20 a month. Rich entrepreneurs, he complains, “spend the equivalent of my annual income in one night at the karaoke bar.”

Frustrated on the land, peasants are doing what they have always done in industrializing countries–moving to the cities. So far, 100 million people have pushed into the coastal cities from the interior to chase the style of living they see on television. Beijing alone shelters more than 3 million people who drift from job to job and feed on their discontent. The national total for this “floating population” is expected to rise to 200 million over the next five years. Add millions of newly unemployed state-enterprise workers to the mix, and the results could be disastrous.

Like Deng, who was hounded into exile by rampaging Red Guard demonstrators at the start of the Cultural Revolution in 1966, Jiang believes only a strong hand can stave off chaos in China. Yet time may be running out on that formula. Even now, says Mineo Nakajima, a Sinologist at the Tokyo University of Foreign Studies, “Jiang is using the police and security forces to control social unrest, but he will have difficulty if it continues to escalate.” The country’s volatile economic situation and its corruption accentuate the widespread sense of unfairness, feeding the “red-eye disease”–envy of those who are getting more, faster. And while China’s masses are more interested in a higher standard of living than in profound political reform, Tiananmen and the forces that produced it still have a hold on the public’s imagination.

The luster of the revolution and of the fighters who won it nearly a half-century ago is fading away, so the claimants to power in China need a new source of legitimacy. That makes a strong economy absolutely essential. But how can the market freedoms that are the basis for prosperity be reconciled with central political control? A search is beginning for a process in which China’s people can have some say in public affairs and see some evidence that their leaders respect them. It is a commonplace that all-powerful, charismatic Mao and Deng were in the tradition of China’s Emperors. Jiang Zemin and his rivals are mere politicians. They must be responsive ones, or the tiger will toss them off its back.

–Reported by Sandra Burton/Washington and Jaime A. FlorCruz and Mia Turner/Beijing