Backed by the army and Deng Xiaoping, Beijing's hard-liners win the edge over moderates in a closed-door struggle for power

By John Elson

The first act of China's great political drama of 1989 was played out with the panoply and sweep of a revolutionary grand opera. While much of the world watched, for a time, via satellite TV transmission, hundreds of thousands of students and sympathizers filled Beijing's Tiananmen Square, demanding greater democratization and an end to nepotism and corruption. On Saturday, May 20, with the government and the Chinese capital paralyzed, the curtain rang down ominously on Act I: Premier Li Peng, a principal target of the demonstrators' wrath, and President Yang Shangkun imposed martial law; troops from the People's Liberation Army (P.L.A.) mustered to enter the city.

Last week's Act II, although no less intense, was a more intimate and beclouded production. The capital returned to a semblance of normality, even though some 250,000 troops were poised on the city's outskirts or headed for Beijing. The army, however, maintained an uneasy standoff with a reduced cadre of student protesters. The real drama took place in a walled enclave in the western hills outside Beijing, where members of the innermost circle of China's Communist Party met to resolve a bitter power struggle that had the capital aswirl with unfounded rumors and unanswered questions.

At last the curtain fell again, with the disturbing clang of a prison door closing. Li Peng appeared on television for the first time since martial law was declared, receiving -- as if to underscore his legitimacy -- a covey of newly arrived ambassadors. The Premier declared that the soldiers would move into Beijing as soon as the city's residents understood the need to restore order. From all available signs, Deng Xiaoping had cast his lot with the hard- line faction headed by Li. The losers were a more reformist group led by party chief Zhao Ziyang. Diplomatic sources said that Zhao had been stripped of his power, although perhaps not his title, and put under house arrest for daring to challenge the paramount authority of Deng. As for Deng, he is believed to be in the capital, personally directing troop movements by phone. Last week's power struggle raised questions of whether he might be turning his back on his own creation and whether modernization would outlast him.

Though the leaders of the P.L.A. initially seemed torn by the crisis, by week's end most active generals had sided with the hard-liners, out of personal loyalty to Deng and concern for the restoration of order. But a question arose: Could the troops impose martial law without spilling the blood of hundreds and perhaps thousands of fellow Chinese, thereby giving the lie to the army's proud claim to be one with the people?

Although George Bush's personal ties with China date back to his years as head of the U.S. liaison office in Beijing (1974-75), the President seemed as unsure of the situation as anyone. Bush met with an old tennis-playing crony from his Beijing days, Wan Li, chairman of the Standing Committee of the National People's Congress. Afterward, Bush issued a cautious statement that appeared both to back the students, by saying that the U.S. encouraged the worldwide growth of democracy, and to encourage the government, by vowing that he was committed "to expanding normal and constructive relations" with China.

Meanwhile, Wan, 73, cut short his visit to Washington (canceling a tennis match with the President), ostensibly for reasons of health, and headed home. But instead of returning to Beijing, he landed in Shanghai, where he was put up in a guesthouse outside the city -- possibly under house arrest. On Saturday a statement was read on Chinese television saying that Wan Li supported Li Peng -- dashing the hopes of protesters that Wan would convene an emergency session of the National People's Congress to consider Li's removal.

For most of the week, contradictory signals emanated from a country whose secretive rulers prize political stability above all else. Perhaps the most curious sign involved the army. On Monday seven retired generals, including former Defense Minister Zhang Aiping, signed a letter to the party leadership demanding that the P.L.A. not be used to quell the uprising. "The army must absolutely not shoot the people," it read. Two days later, the military's Liberation Army Daily quoted a letter from the P.L.A. general staff (also dated Monday) urging troops to study carefully a speech by Li Peng denouncing the uprising as a counterrevolutionary threat.

At considerable risk to their careers, 500 intellectuals, including Ba Jin, China's best-known writer, signed a letter denouncing Li and urging an end to press censorship. Until the hard-line faction emerged victorious, China's official press and television reported with neutral accuracy on the pro- democracy demonstrations. By contrast, last Friday's prime-time TV news was constricted to official statements of support for martial law.

For a city theoretically under martial law, Beijing seemed amazingly lacking in tension throughout the week. "There is absolutely no sense of anarchy here," reported TIME correspondent Richard Hornik, who had returned to the capital for the first time since serving as the magazine's Beijing bureau chief from 1985 to 1987. "Buses are running again, and the streets are full of bicyclists. The markets are full of both shoppers and produce, and there have been only scattered reports of hoarding.

"By Thursday, Tiananmen Square contained hardly any more people than it would on a pleasant Sunday afternoon. The difference was that the 20,000 to 30,000 students still there were camped out on tarps covered by makeshift tents of clear plastic or by clusters of umbrellas, which made it look like a beach outing in places. But living on the square's paving stones was no day at the beach. Downwind, the aroma of urine was overwhelming.

"Health problems have become a major concern. Guo Changshou, a 23-year-old medical student, said that virtually all the protesters had some kind of illness: 'Most have colds or diarrhea, but we have had cases of hepatitis.' In fact, it is something of a miracle that there isn't an epidemic of the disease. Food donated to the students by factories and other work units was piled in the open. Nearby, garbage rotted in the morning sun, and by midafternoon, the temperature often topped 90 degrees F. City sanitation workers threaded their way through the clusters of protesters to pick up the bulk of the garbage, but a good bit got left behind."

The peaceful character of the sit-in was a tribute to the political skills of the student leaders. When three youths defaced a huge portrait of Mao in the square with blotches of red and black paint, students handed the vandals over to the People's Armed Police for punishment and replaced the portrait. The three best-known leaders of the protest, who proved to be almost as elusive as their political elders meeting in the western hills, are Guo Haifeng, 23, a graduate student in international politics at Peking University; Wang Dan, 20, a history major at Peking University; and Chai Ling, 23, a woman grad student in education at Beijing Normal University.

Fewer than 10,000 students remained in the square at week's end. Many of the original demonstrators had returned to campus, to be only partly replaced by students from outside the capital. With the protest fizzling, student leaders indicated that they would pull out by this Tuesday -- but vowed to stage a march through Beijing of 1 million people as a parting gesture.

Other factors contributed to the calm. When troops first appeared in Beijing's suburbs, they were met by crowds of citizens who peacefully blocked their path -- a Chinese version of "flower power." According to some Western analysts, the army leaders were made hesitant by the ambiguity of their situation. For example, the capital's hard-line mayor and party secretary passed on the martial-law order to the Beijing military command but without instructions as to when and how force was to be used.

Though the army turned out to hold the balance of power last week, its influence has fluctuated over the past four decades. For the first three years after the 1949 Communist seizure of the mainland, China for all practical ; purposes was run by the military. After the transition to civilian rule in 1954, the army played a subordinate role, even though it had enough seats on such institutions as the Politburo, the Central Committee and the National People's Congress to guarantee its power base within the party structure.

At the start of the Cultural Revolution in 1966, the P.L.A. initially stood aloof. As the Red Guards ran amuck, Mao Zedong urged the military to challenge them -- but with rhetoric, not guns and bayonets. Some officers rebelled against what they felt was the ambiguity of their position. In Wuhan district, the military commander, General Chen Zaidao, was ordered to support the local Red Guard faction. He refused and seized as hostages three party officials who were sent to confront him. Premier Zhou Enlai had to negotiate their release.

Mao's wife Jiang Qing used General Chen's mutiny as an excuse to unleash the Red Guards against "capitalist roaders" within the military. Commanders were dragged from their camps and publicly humiliated until Mao ordered a halt to the attacks. Belatedly, he realized that the army was the only stable institution in a nation threatened with anarchy.

When the Cultural Revolution subsided, so many political jobs had been left vacant as a result of the struggle that by 1969 military officers held 40% of the Communist Party's key posts. By this time, though, Mao had a new threat to contend with: the ambition of Defense Minister Lin Biao, then his designated successor. The impatient Lin laid plans to oust Mao via the euphemistically named "571 Engineering Project," but his coup plot was discovered, and Lin died when the plane in which he escaped from Beijing crashed in Mongolia. After Lin's death, that most deft of diplomats, Zhou Enlai, reduced the army's role in political affairs.

The process has continued during Deng Xiaoping's decade of pragmatic reform. In 1981 all P.L.A. members were required to take a special pledge of loyalty to the party, the government and Deng's modernization program. To save money and to lessen tensions with the Soviet Union, the P.L.A. was trimmed from a peak strength of 4.5 million to its present level of 3.2 million. The increasing prosperity of farm life means that the army has been forced to enlist more urban youth, who are more inclined to question orders. Despite such lures as family benefits and monthly bonuses, local officials often find it difficult to produce their annual quota of recruits. As a result, some | communities have begun to impose fines on youths who refuse to enlist. "Recruitment is even harder than family planning," a military officer complained. "You can drag a person to the hospital ((for an abortion)), but you can't drag one into the army."

Except for the top veteran commanders, for whom having a peasant background is a badge of honor, officers are mostly urbanites, educated at one of the army's 25 technical academies. Their pay has not kept up with China's inflationary pace. A major earns about 250 yuan a month (roughly $67), while a hard-working Shanghai taxi driver can clear 2,000 yuan ($537). Such perks as free housing and food allowances, however, compensate somewhat for the income differential. Deng, moreover, has worked to maintain ties with the leadership by insisting on faster promotions based on skill rather than seniority. Nonetheless, promotion to the top ranks, particularly the political commissars, is still made on the basis of personal and political loyalties.

According to some reports, Deng last week traveled to Wuhan and Shanghai to rally the support of the generals. There is little doubt that his survival depends on the good offices of the P.L.A. To the rebellious students and their supporters, Deng, the progenitor of reform, is now viewed as an autocratic and imperious obstacle to it. It must have been particularly galling that many of the demonstrators' abusive slogans echoed his own words. WHO SAYS YOU CAN'T RETIRE? read one sign in the square, reflecting Deng's frequent statement that he cannot step down because the country needs him.

One problem is that Deng conceived of China's modernization almost exclusively in economic terms. His reforms unleashed long-suppressed entrepreneurial energies but at a cost of soaring inflation (30% annually) and unemployment. Meanwhile, some party officials began to talk of the unthinkable: political reform that would eradicate China's endemic corruption and loosen party strictures on freedom of speech and the press. Those nascent views were given their fullest expression in the slogans of the student protesters in Tiananmen Square. Some demonstrators even suggested that China should have a multiparty system.

The apparent triumph of the hard-liners reduces those goals to impossible dreams. But it does not by any means solve Deng's political problems. On the contrary, Li Peng is widely regarded as a drab mediocrity -- and a potential scapegoat for having allowed so much popular discontent to surface. Deng might | try to push him aside once order has been restored. And what price have the hard-liners had to pay to guarantee the military's allegiance? "The party must control the guns," Mao wrote. "The guns must not control the party." But in China's postwar history, the military has frequently filled political vacuums. Could that happen again if a hard-line victory leads to a purge of reformers?

Much has been made of the differences between Mao and Deng. Mao was massive; Deng is diminutive. Mao was an ideologue; Deng is a pragmatist. But they have had one shared frustration: arranging an orderly succession. First Liu Shaoqi and then Lin Biao disappointed Mao; Hua Guofeng, his last designated successor, held power after the Chairman's death, from 1976 to 1978. In 1980 Deng put his approved team in place -- Hu Yaobang as party General Secretary and Zhao Ziyang as Premier. Seven years later, Hu was forced from power as a deviationist. Now Deng is purging Zhao and other liberals who were the true believers in his reform program. And this, for China, could be the tragic Act III of its great political drama: by siding with Li's hard-liners, Deng is effectively repudiating his great dreams for the country, tarnishing his own reputation in the process.

With reporting by Sandra Burton and Jaime A. FlorCruz/Beijing and Christopher Ogden/Washington