China's soldiers, sailors and Air Force men began wearing new, more distinguished-looking uniforms today in a shift away from the baggy outfits that have been their trademark for more than two decades.

The new uniforms were seen as a morale-booster for the armed forces, which have been assigned a relatively low priority in the country's modernization plans. The move also was seen as a necessary step in restoring military ranks.

Designers have added epaulets to the new uniforms and replaced the army's rumpled-looking "Mao cap" with a peaked military hat of the type seen in some European nations. The old red star on the cap has been replaced with a more elaborate looking insignia and star. New buttons have been added to the uniforms of both officers and enlisted men.

The new uniforms were given front-page prominence in a report appearing today in one of Shanghai's leading newspapers, Liberation Daily. In a brief television address last night, the vice chief of the general staff of the armed forces, He Qizong, said the change in uniforms would improve the Army's discipline and appearance.

The trimmer, more distinguished-looking uniforms are in keeping with the aims of China's leader, Deng Xiaoping, who has been trying to create a leaner, more modern military force. In speeches delivered during the past decade, Deng sometimes has referred to China's defense establishment as "bloated" and in need of reform.

It is not always immediately possible for the inexperienced to distinguish between officers and enlisted men in the Chinese military because insignias of rank have not yet been restored. But officers usually have four pockets on their uniforms, while ordinary soldiers have only two. The uniforms of high-ranking military officers are made with material far superior to that of enlisted men's uniforms.

Army officers and ordinary soldiers interviewed in the streets of fashion-conscious Shanghai were unanimous in welcoming the improved uniforms. Some said it marked a return to the best traditions of the armed forces.

There was a time when China's leaders believed it best to have no differences in the appearance of officers and enlisted men, including signs of rank. Army officers complained privately, however, that the absence of rank created unnecessary confusion.

Introducing new uniforms has been one of the easiest steps for China's current leaders to take in changing the military. When ranks are reintroduced, it probably will mean the retirement of some of the senior officers who have resisted change.