More than 3,000 disgruntled former soldiers staged a violent uprising in southern China last July, seizing local Communist officials, ransacking government offices and beating up police, according to a usually reliable Hong Kong magazine.

At least 30 persons were injured and a small town was thrown into chaos with shops and factories shut for three days before the group calling itself the Disillusioned Brigade was repulsed, reported Zheng Ming, a leftist journal with good mainland Chinese contacts.

A spokesman for the Chinese Foreign Ministry, asked to respond to the article published in Zheng Ming's December editions, branded it "a sheer fabrication" and declined further comment.

Diplomatic sources in Peking were unable to confirm the incident, but they said they have heard reports of other disturbances of a smaller magnitude inspired by disaffected veterans.

The magazine said that the recently demobilized soldiers resorted to violence after returning to their villages and finding themselves unable to land a job, spurned by local women and victimized by new national policies that seem to reward those who remain on the farm and avoid military service.

The incident reportedly coincided with the 60th anniversary of the Chinese Communist Party, which was July 1. It is the largest reported case of civil disorder since political factions fought throughout China during the bloody Cultural Revolution of the 1960s and 70s.

Although an Army career once assured a fast route to power, prestige and privilege in China, military life has lost its luster since the pragmatic leaders now running the nation have slashed the defense budget to beef up civilian sector spending.

Deep budget cuts during the past two years have forced the 4-million-strong Army to demobilize an estimated 400,000 troops, mostly from the rural rear guards. The dismissed soldiers return to their villages with little hope of a job in China's depressed economy.

Back on the farm, the former soldier learns that his relatives not only failed to receive subsidies once allotted all Army families, but they were penalized by his absence. New agricultural policies allow families to keep everything they produce above a certain quota, rewarding groups with the largest number of hands and strong backs.

Zheng Ming emphasized the frustration of veterans in describing the background of the July revolt in Wuchuan (formerly Meilu), a poor coastal town of 40,000 in Guangdong Province less than 300 miles west of Hong Kong.

Thousands of young peasants cast their fortunes with the Army only to have landed back in the impoverished area and discovered that their families have lost money through their absence, village girls pursue prosperous peasants and good jobs are not to be had, said Zheng Ming.

With a mixed sense of desperation and depression, 6,000 veterans from the surrounding area banded together in 1980 to organize petition campaigns to persuade the government to give them jobs, according to the magazine.

When their lobbying failed, said Zheng Ming, the former soldiers formed what they called the Disillusioned Brigade and drew up an elaborate plan named Operation Dagger, which included an armed uprising among its options.

Finally on July 1 while the Communist Party was celebrating its 60th anniversary, more than 3,000 members of the brigade stormed Wuchuan, smashing file cabinets and document drawers in government offices.

Breaking into an anniversary celebration, the rebels "kidnaped" the local party secretary and top governing official. When police from the county public security bureau tried to repress the attack, the brigade fought back and wounded more than 30 police officers, according to Zheng Ming.

After three days of disorder, the article said, the provincial party committee mobilized a large enough force to put down the Disillusioned Brigade.

The brigade leaders surrendered after a prefectural official issued a radio broadcast labeling the incident "counterrevolutionary," a serious crime.

The article fails to describe how the attackers were armed or how many provincial forces were required to quell the uprising. Details of the alleged kidnapings, ransacking and clashes were also not given.

The magazine said it learned of the incident when its reporter visited Meilu recently and discovered several street posters announcing that 27 leaders of the brigade had surrendered to police.