CHARACTERISTICALLY, Deng Xiaoping, octogenarian leader of China's latest and most promising phase of modernization, made astute political use of his retirement. He dragged out with him almost half the members of the Communist Party's Central Committee and Politburo, most of them, like him, the heroes of the old guard, but most of them, unlike him, footdraggers on reform. He arranged to retain, for now, anyway, chairmanship of the party commission that oversees the military. And his prote'ge', Prime Minister Zhao Ziyang, takes over as party leader.

Not only has Mr. Deng survived revolution, war, purge and privation. He has also had the wit to see that China had to start matching the material standards and competition of the industrialized democracies and that it could do so only by embracing, selectively, their ways. Nine years ago he instituted a program of changes that in its conceptual boldness and actual achievement surpasses anything the cautious Soviets are now even contemplating.

Westerners note, with pride and a bit of smugness, that the Chinese are unbinding their economy from the rigidities of central planning and adopting certain aspects of a free market. The Chinese insist, however, that they are building a "primary state of socialism" in which escape from lingering "semifeudal" and "semicolonial" conditions and the clutches of the bureaucracy will take until the middle of the next century. Thus, though reform is hailed as China's liberation, it is to proceed at a very gradual pace -- a pace slow enough for the Communist Party, even while it loosens its grip at the local level on some activities, to retain monopoly control at the top -- or so it intends, anyway.

Mr. Deng realized that Mao's Cultural Revolution was strangling China as well as brutalizing its people and that reform could advance only when China had entry to the world economy and was no longer in a state of international siege. This dictated a foreign policy of general accommodation, especially with the West. It gives the United States a huge stake in the success of the great multidecade experiment that Mr. Deng is bequeathing, he hopes, to friendly heirs.