Thick black clouds of smoke hung in the humid dawn air above the shadowy hulls of freighters in Shanghai's Huangpo River. The assorted wastes from dozens of smokestacks of steel mills, petrochemical plants and other heavy industries that are the pride of China's modernization effort dissolved into the ugly haze of a July morning.

During the last two decades, lung cancer rates in Shanghai have risen dramatically, Chinese health officials concede, and they warn that as the Chinese modernization campaign accelerates under the new, technocratic, post-Mao leadership, the problem of cancer causing substances in the environment will grow far worse.

The clouds of pollution above the Huangpo River are only the most visible evidence of a fundamental change in Chinese public health picture. As China advances into the industrialized world, it is developing dramatic new public health problems, much like those of the industrialized Western democracies.

Chinese propaganda campaigns and mass mobilizqtion for public hygiene have achieved widely acclaimed success in slashing the incidence of infectious disease, the major health woe in China and other developing countries until very recently.

Chinese health officials concede, however, that they have encountered the same new difficulties in coping with the new illnesses of industrialization -- hypertension, heart diseases, and cancer -- as have their capitalist colleagues in the West.

Reliable and comprehensive nationwide statistics on disease prevalence are not collected or made available by China's decentralized health care system. But at Peking's Fuwai Hospital and Cardiovascular Institute, the nation's chief source of epidemiological information, doctors reported new findings in July which document the country's fast-changing public health picture.

In an occupationally diverse western Peking suburb, annual deaths from infectious diseases plunged from 112.9 per 100,000 people during the years 1955-59 to 17.4 per 100,000 during 1974-78. Fuwai doctors told representatives of a national delegation of American medical students. Cancer mortality soared during the same period, however, from 25.6 per 100,000 to 67.6 per 100,000 and cardiovascular deaths jumped from 116.9 to 215.7 per 100,000.

Senior officials of the Ministry of Public Health agree with China's leading environmental health experts that mounting levels of industrial pollution are probably the main cause of the sharp rise in cancer deaths, as well as a surge in the incidence of chronic bronchitis and other respiratory ailments. Even Chinese Communist Party Chairman Hua Guofeng has called for a war upon the "three wastes" -- air, water and solid waste pollution.

"With industrial development, the environmental pollution problem will become very serious," said Dr. Zheng Geru, deputy director of the Ministry of Public Health's bureau of foreign affairs, in a recent interview in Peking. "We must do something to prevent it from getting worse."

According to Dr. Yang Mingding, chairman of the faculty of public health at Shanghai First Medical College and China's leading authority on environmental health, industries are now dumping raw, untreated wastes into the air and into the waters of the Yangtze and Huangpo rivers in Shanghai unfettered by any environmental protection regulation.

Efforts to enforce a code of pollution regulations and to encourage factories to install dust scrubbers in smokestacks ended in 1966 with the start of the Cultural Revolution, he said. Yang blamed this on the Gang of Four, a group of leading radicals purged by moderate forces in 1976 and now officially blamed for the excesses of the Cultural Revolution.

"The Gang of Four cut off work to treat the three wastes," said Yang. "In Shanghai, before the Cultural Revolution started, there was a mass movement to take out dust from smoke in factories. Scrubbers were installed in 3,000 of 6,000 smokestacks. Fifty percent didn't put out black smoke. Then the Gang of Four ordered them removed.

"They wanted to tear down the old system," Yang declared. "After 1966, regulation stopped."

At the national level, the picture was similar, according to Cheng. "Before 1966, we had standards for carbon monoxide, sulfur dioxide, and other gases," he said. "Now we have to do it again from scratch."

But while the moderate leadership which succeeded Mao Tse-tung in 1976 generally has backed a new assult upon "the three wastes," Ministry of Public Health officials admit they face two serious obstacles to their efforts, one political and the other technical.

First, there is vigorous resistance from industrial interests and, second, insufficient scientific understanding of the threats posed to man and the environment by the myriad chemicals being released into Chinese air, water and landfill sites.

Official admission that a growing conflict exists between health and industrial leaders over environmental pollution standards is considered remarkable in Communist countries, which usually deny the existence of conflict between economic special interests. Yet Zheng was willing to acknowledge such a conflict in China.

"Or course the Ministry of Health wants high standards and the Ministry of Industry, low standards," he said tersely. "You can spend less money on low standards."

Zheng then appeared to draw back from his words, aware of their ideological implications. He distinguished between this conflict in China and the struggle between industrial and environmental interests in the United States.

"In a capitalist society, there's an economic interest," he said. "With socialism, we've wiped that out. But ideological resistance -- habit -- is still there.

"Suppose you are the manager of a factory," he added. "I want you to implement pollution standards that would require some sacrifice. You will say, 'I've been doing things well the past few years. Why should I change?' "

Last June, according to Zheng and Yang, representatives of the ministries of health and industry met under pressure from Chinese leaders and negotiated a tenuous agreement on guidelines for a new set of tough pollution standards.

"The standards will be established jointly by the Ministry of Health and other industries," Zheng said. Technical experts from both sides will sit down together to write a new set of regulations. Yang said, based on data from stepped-up environmental research on toxic substances information shared by scientists from the United States and other industrialized nations.

But the June agreement, Health Ministry officials admitted, will not end the battle over standards. They predicted the fight will grow as industrialization speeds up and the experts focus on the technical specifics for hundreds of different pollutants.

Dr Zhen Haifeng, director of the Health Ministry's bureau of science and technology, concluded, "Conflicts were resolved into one opinion [last June], but there will be many more conflicts."

Potential dangers from low levels of ionizing radiation from medical X-rays, atomic weapons testing and other sources have also aroused concern among Chinese health officials, although they seem reluctant to discuss the the subject. Their concern has led to reevaluation and revision of existing medical radiation standards, which were copied largely from the United States.

"We are developing new standards from research," Zhen said. "The standards for radiation will be higher. There will be more strict requirements, though we are still in the process of revision."

In addition, according to Zheng Geru, the Ministry of Public Health conducts medical checkups on those living near the sites of atmospheric atomic bomb tests. Cheng and other officials insisted that medical workers have not found elevated body radiation levels in those living nearby.

"Up to this moment, I'm not aware of any cases where this nuclear pollution has done any serious damage to the people's health," he said.

But when prodded by the mention of reports of radioactive iodine in cow milk in some localities in the United States in the wake of a few Chinese nuclear weapons tests, Cheng conceded that so-called "hot spots" -- areas where precipitation brings dangerous levels of radioactivity to the ground hundreds of thousands of miles from a test site -- have not been investigated by the ministry. The problem is "inevitable," he said, "but I do not know whether any other research organizations" have looked into it.

Basic radiation biology research to back up the revision of dose standards is underway at several institutions. At the Peking Institute of Biophysics, according to an unpublished paper by U.S. Nobel laureate H. M. Temin, scientists are studying the effects of long-term low-level external radiation on rats and monkeys. The effects of radiation used for medical diagnosis are also being studied.

Meanwhile, at the Shanghai First Medical College, Yang Mingding is coordinating a national effort to support the new environmental protection movement with an adequate toxic chemicals research foundation.

Yang and others on his research team freely admit that their efforts are hampered by technological backwardness.

In studies on substances or disease that cause mutations and malformation of fetuses and in examining potential chromosome aberrations, a key indicator of cancer causing potential, "we are 10 to 20 years behind the Western world," a researcher in Yang's laboratory said.

Citing the U.S. controversy over the dumping of PCBs (polychlorinated biphenyls) into rivers, Yang said that these and other water pollutants already may have had a toxic impact upon many Chinese, but that "we don't have the techniques to measure them."

To overcome this lack, Yang is hoping for aid, in the form of equipment and know-how, from the U.S. as part of the biomedical research cooperation deal signed by former secretary of health, education and welfare Joseph Califano in Peking last month. One of the seven areas of cooperation outlined in the agreement is public health, and Yang is China's coordinator for joint work in this area.

"Pollution is the most important priority -- the effects of pollution on adults and children," he said.

Yet even if U.S. toxicology know how becomes freely available, severe financial limits are likely to continue to hold back China's war on "the three wastes."