Some vital economic policies of China's most influential leader, Deng Xiaoping, have apparently begun to flounder because of official resistance and mistakes by subordinates that threaten the orderly transfer of power in China, diplomatic and Chinese sources here say.
Publicly and privately, Chinese officials are reporting resistance to new experiments in automony for local factories and provincial governments, a key decentralization policy closely identified with the man Deng wants to be china's next premier.
Some officials say the Foreign Trade Ministry has been particularly successful in slowing efforts to allow direct trade by factories, leaving in doubt Deng's efforts to bring in more foreign exchange.
One source said Deng's critics in the party had been circulating stories about serious mismanagement of funds by some of his provincial proteges. The mayor of Peking, Lin Hujia, was said by these critics to be responsible for the misuse of $47 million but was not disciplined because of his links to Deng.
The criticism of Deng's subordinates points to a major difficulty for Deng, who is 75, as he attempts to install younger leaders and new policies which can survive him. In a remarkable public statement, Deng appeared to signal his desire that China's nominal top leader, Hua Guofeng, be replaced as premier by Vice Premier Shao Ziyang. The remark seemed to some characteristic of the impetuosity that has troubled Deng's fluctuating political career in the past.
Since the removal of four former adversaries from the ruling Politburo in February, Deng's influence has apparently become stronger than ever. Yet, sources here say, this has not ended resistance to his economic plan from hard-liners whose preference for orthodox Stalinist central control is so deeply ingrained in Peking's ministries that Chinese officials expect great difficulties when Zhao and others no longer have Deng to fight their bureaucratic battles for them.
Zhao identified the problem in a speech prominently displayed on the front page of the People's Daily shortly after Deng announced that his protege had assumed control of "day-to-day work" of the government.
"Contradictions have arisen between that part of the economic structure where initial reforms have been made and the structure as a whole, which remains unreformed, in the wake of increased independence by enterprises and the use of the market economy," Zhao said. "Some illegal activities have emerged, such as speculation and profiteering, shoddy work and the use of inferior materials, at the expense of the interests of the state and other enterprises."
Local party organizations have complained bitterly in recent weeks of factionalism, a sign of continued footdragging and resistance to policy orders from Deng supporters. Army headquarters for the Kunming region said the malcontents "though small in number, would not hesitate to act if the climate seemed right."
The People's Daily said this group "bore savage hatred of the party's present policies."
The latest edition of the Communist party's theoretical journal, Red Flag, also reveals resistance to Deng's success at rehabilitating the good name of the late Liu Shaoqi, China's former president who was purged together with Deng during the late 1960s Cultural Revolution. The rehabilitation of Liu has, in the opinion of some younger party members, "harmed the prestige and greatness of the party," the magazine said.
In a recent interview with Associated Press correspondent John Roderick, Deng went out of his way to criticize a recent speech by Qinghua University vice president Zhang Guangdou. The speech had sharply criticized the United States as an unredeemingly capitalist power and called into question the future of Sino-American relations, a policy closely identified with Deng since his trip to the United States in 1979. Deng said Zhang had "gone haywire." He did not explain how Zhang's remarks could have been printed had distributed to Communist Youth League members throughout Peking without support from important elements in the party.
The political maneuveringover Deng's successor is expected to reach some kind of climax at the meeting of China's parliament, the National People's Congress, in August. The Congress would be a convenient time for the announcement of Hua's retirement as premier, ostensibly to concentrate on his duties as party chairman and perhaps to take up the ceremonial post of China's president.
That would also be the time when Deng might be expected to relinquish his title as vice premier to make room for younger men, while still maintaining a seat on the real policy-making body, th Politburo of the party Central Committee.
Deng has already relinquished his post as Army chief of staff, a move that does not seem to diminish his influence but raises some questions about support for him among the second tier of top party leaders. The new chief of staff, Lorean war hero Yang Dezhi, criticized Deng by name in 1976 and his loyalties are uncertain.
There are other men in the party leadership, such as Chen Yun and Li Xiannian, whose experience and seniority rival Deng's and who have subordinates counting on them for political advancement. Deng apparently must deal with them and find suitable positions for their proteges in any successor government, which further limits his ability to make decisions on his own or ensure the survival of his pet policies.
The leading group appear very slow, for instance, in providing a final verdict on the history of the Cultural Revolution and in organizing a promised trial for their defeated political adversaries, the pro-Mao Tse-tung "Gang of Four" who have been in detention since late 1976.