Critics inside China have attacked a recent massive readjustment and slowing of the economy as a backward step, according to a People's Daily commentary and the full text of a speech by Communist Party Chairman Hua Guofeng released last night.

Hua, speaking June 18 in his capacity as premier, said, "The view that this policy of reajustment is a negative retreat and the view that its implementation will lead to termination of the importation of advanced technology are both wrong through and through."

The National People's Congress, China's parliament, today heard former Peking Mayor Peng Zhen explain proposed laws reviving some Western notions of due process and order in treatment of people accused of crimes.

The remarks in Hua's report on government work indicated that criticism of the retrenchment plan, which will slow steel and grain production but also bring some inflation, occured at a high party level and could hinder its implementation.

"Why do some peole consider it to be a backward step?" the People's Daily commentary distributed by the New China News Agency said. "The most important reason is that they view the lively and flourishing situation in a biased way."

The full text released today by the New China News Agency mostly followed earlier reports of Hua's remarks, including the call for increases in both prices and wages and an endorsement of more experimentation with elections of local officials.

It also disclosed that:

China will seek to cut its population growth rate by 1985 to one-half of 1 percent, one of the lowest rates in the world. Peking now claims a growth rate of 1.2 percent, with a population of about 970 million people.

Management of factories that failed to make a profit would be due for a "shake-up".

Prices of grain and edible oil will be kept artifically low depsite increases in prices paid to farmers, but other food prices would rise and require similar rises in worker salaries. No one's living standard would be hurt except families with more than the usual number of "mouths to feed," Hua said.

Despite his acknowledgment of opposition to the plan, Hua himself appeared to support almost completely the vast changes in Chinese economic and political policy conceived by influential Vice Chairman Deng Ziaoping.

Although Hua still paid his respects to the late party chairman Mao Tsetung in the speech, at some points he appeared to refer to Mao as a co-equal with the late premier Chou En-lai, a more moderate figure who was Deng's mentor.

One People's Daily article seemeed to revive the occasional veiled attacks on Mao, describing the Cultural Revolution Mao began in 1966 as a "10 year disaster."

Hua spoke in great detail on the need to overcome the damage to the system done by dogmatists during the Cultural Revolution through increased democracy and tough measures against arrogant and incompetent officials.

He called for a gradual increase in the number of local officials directly elected in communes and factories.

"In instituations where it is inadvisable to institute elections, opinion polls may be tried out at regular intervals, say, at the end of each year, as a method of mass assessment and examination of the work of leading officials," Hua said.

He said the readjustment would continue until 1981, when a new five-year plan would be announced.

Yet Peng said: "Evidence, investigation and study should be the basis of reaching a decision in any particular cases, and confessions by the accused should be viewed with caution."

The speech on legal procedures by Peng Zhen, Peking's former mayor, at today's session appeared to limit some of the basic methods of law enforcement in China - particularly the pressure placed on anyone who is arrested to immediately confess.

Chinese police and prosecutors have depended heavily on offers of leniency to those who confess.

Peng said the proposed law also ruled out extreme forms of the "struggle sessions," mass accusation meetings that were used against Peng himself when he was temporarily purged during the Cultural Revolution.

Peng said the death penalty would not be abolished but should be used sparingly. A two-year reprieve would be given with possibility of commutation of sentence where "immediate execution is not absolutely necessary." Capital crimes would include murder, rape, robbery, arson, dike-breaching any discharging of explosives or poisoning "that causes serious consequences."