Perhaps the most fitting emblem of modern China is a 1997 sculpture by Chinese artist Sui Jianguo. It is a fiberglass cast of the top half of a Mao suit, the distinctive clothing popularized by longtime Chinese Communist Party Chairman Mao Zedong. The shape of Sui's sculpture is unmistakably the paunchy torso of Mao in his prime. But in Sui's rendering, the suit, like the ideology it came to represent, is empty.

With last week's agreement on terms for entering the World Trade Organization (WTO), China has taken another major step from Mao to market. The most important concession China's leaders made during the protracted talks was the implicit concession to themselves that the system Mao built--the communes, state enterprises, oppressive work units, central planning apparatus and politically subservient bureaucracies--had lost its flesh and blood.

With the vanishing of Mao's socialist vision in the economic sphere, all that remains of communism in China is the Communist Party. Its survival is evidence that the party was never strictly about the utopian economic vision of a communist future but rather was about power, pure and simple. While the party has lost its ideological center of gravity, it retains a sense of purpose: to perpetuate itself, jealously guard its political monopoly and squash potential rivals.

But the party realizes that its lack of an ideological core, or even a clear platform outlining its beliefs, makes it vulnerable to those driven by new passions, whether nationalist or religious or otherwise. That explains what might appear to be a rather strange juxtaposition over the past two weeks: While taking a historic step toward economic liberalization, the Chinese government was simultaneously maintaining its rigid stance on political dissent.

As China's trade negotiators solved the last details of the WTO accord, China's police were rounding up more members of Falun Gong, an organization whose followers are devoted to qigong, a system of breathing exercises with mystic overtones. This seemingly harmless group of navel gazers and slow-motion aerobic performers has unnerved the government by defying orders to disband.

During the 50 years since Mao's revolution, China's economic and political spheres have been inextricably linked. To assert control over a nation that had been wracked by warlords, Japanese occupiers and civil war for decades, Mao constructed a vertically integrated system of state enterprises that controlled every aspect of Chinese lives. The work unit was his most important tool; it was empowered to assign housing, jobs, schools and much more. Neighborhood committees of snitches and spies inspired fear among most Chinese, as the leadership launched one "movement" after another to weed out political critics. Even Zhu Rongji, the current premier and number-three party official, fell afoul of the political establishment in 1957 and was stripped of his party membership for two decades.

Under Mao, China became like other totalitarian states. Ruled by a single party, it sought not only to control people's actions, but their thoughts as well. Chinese grew cautious about voicing--even to themselves--any views that diverged from official wisdom.

The aftereffects of this climate persist today. Even after his selection as premier of China in 1998, Zhu declined to talk about the 1957 anti-rightist campaign and his own banishment when a foreign reporter raised the issue at a news conference. The usually blunt Zhu said it was too painful. And in many other respects, China's public dialogue about political issues remains stilted and ritualistic.

But, economically, the climate has changed. Under Chinese leader Deng Xiaoping, China's Communist Party has altered its approach, permitting more economic freedom while keeping political control. As a result, the party's rule has lost much of its totalitarian quality. It no longer seeks to occupy every nook and cranny of Chinese society. The work units have lost their vigor. Private housing, private enterprises and private schools have emerged. At the rare times that they could be seen at all when I was in China, the once-powerful neighborhood committees had turned into gaggles of mostly aging women who gossiped on street corners. Party meetings at the workplace level are rare, and many people join the party simply to make business connections. In the lingo of the East Europeans who created a civil society before the collapse of the Soviet Union, Chinese citizens now have more "space" for casual association, discourse and thought.

Criticism, even private ridicule, has become permissible as long as it doesn't violate (as Falun Gong has) the first commandment of Chinese politics: Thou shalt not form any organization, no matter how seemingly apolitical or benign, without approval from--and submission to--the Communist Party.

One former senior party member, expelled a decade ago, once described the party's position to me as an unspoken bargain: The party has agreed to let people get rich; the people have agreed to leave the party in power.

In contemplating the importance of the WTO agreement, it is important to remember that the Chinese Communist Party embarked on economic reform not because it wanted to relinquish power, but because it wanted to keep it. Initially, it didn't seek to scrap socialism so much as to tinker with it.

As Edward Steinfeld, assistant professor at MIT's Sloan School of Management, pointed out in a recent article in Current History magazine, "Since the late 1970s, Chinese policymakers had attempted to tweak the socialist system by gradually introducing market forces." The changes were to be mechanisms to improve the socialist economy's performance.

"The [WTO] concessions [earlier in 1999] represented a thorough reversal," wrote Steinfeld. "Instead of reform serving to sustain the core, the core itself would be destroyed to save reform along with the growth, prosperity and stability that reform has brought China. In the new view, instead of using market forces to save state socialism, state socialism would have to be sacrificed to preserve the market."

You can bet that news of the WTO agreement would have Mao spinning in his crystal sarcophagus in Tiananmen Square. He had withdrawn China from the WTO's predecessor organization, the General Agreement on Tariffs and Trade, calling it a capitalist club. Instead, Mao promoted a policy of self-reliance, isolating China's economy. With the WTO agreement, China's leaders have asserted an internationalist approach, contradicting both Mao and the neo-nationalists who penned the 1996 isolationist, anti-American tract "China Can Say 'No.' "

Mao glorified the "wisdom" of the peasant masses and distrusted urban intellectuals and experts. With the WTO agreement, China's leaders have removed important tariff protections for peasants in order to woo technology and experts from abroad in other areas.

Defying orthodox Marxists, who said a peasant country needed to pass through bourgeois capitalism, Mao had tried to vault China directly into socialism. But Deng, vilified as a "capitalist roader" during Mao's Cultural Revolution, took the driver's seat in 1978. Discarding Mao's communist rhetoric, Deng fostered new values of individual acquisitiveness by proclaiming that "to get rich is glorious" and "some must get rich first."

Under Deng, ideology became almost limitlessly malleable, and ultimately meaningless. By the 15th party congress, President and Communist Party chief Jiang Zemin said that the primary state of socialism, mixing private and public ownership, was likely to last for "tens of generations." A little arithmetic suggests that could mean at least 600 years.

Predicting democracy in China, however, is risky business. In 1979, the dissident Wei Jingsheng argued that Deng's "four modernizations" of the economy would inevitably fail without a "fifth modernization"--democracy. The Clinton administration, explaining its "engagement" policy, says economic rules can help establish a more respected "rule of law" in China.

Many China hands agree. "The rule of law has a long way to go in China, but a lot of progress has been made in the past 20 years and the great stimulus for it has been the desire to have a modern economy," says Jerry Cohen, a lawyer and a professor of Chinese law at New York University.

That desire grows out of the realization that, contrary to Mao's famous quotation, power does not spring forth solely from the barrel of a gun. If it did, the Soviet Union would still exist and Suharto would still rule Indonesia. The party has proven flexible, even bold at times, in an effort to keep the economy growing and improve people's lives.

Can the Chinese Communist Party continue to outlive communism? It has been effective at fostering growth and eliminating potential rivals. For all its weaknesses, the party remains the only truly national political organization. Deng himself once estimated that universal elections could not be held until 2050. More recently, one of Jiang's close advisers, Liu Ji, said even that target could slip if the Chinese people aren't "ready."

But the party can't overcome the fact that it suddenly doesn't stand for anything. Therefore a sense of foreboding remains, most of all within the party leadership itself, that some new idea could mobilize the Chinese people to bring down the government. Mao once said that the Chinese can be ignited like a prairie fire, and the party is on the lookout for stray matches.

That is why Jiang bends to the nationalist winds, as he has done by threatening Taiwan and countenancing, if not organizing, anti-American demonstrations after the erroneous bombing of China's embassy in Belgrade by U.S. warplanes. And that is why this party, with more than 60 million members and 2 million soldiers and lots of guns, rounds up small groups of democrats and gets spooked by the followers of a qigong expert who utters mumbo jumbo from his home in Queens, N.Y.

Steven Mufson, The Post's Beijing correspondent from 1994 to 1998, covers the State Department and diplomatic affairs.