He operates without the sort of titles that sound impressive to westerners. He is neither a president nor a prime minister, nor is he the chairman of the ruling Communist Party.

But nearly everyone acknowledges that Deng Xiaoping, 81, is China's most powerful person.

Although he made only one speech during a recent special Communist Party conference that produced the most far-reaching leadership reshuffle in the post-Mao period, his influence over the leadership changes was undeniable.

At the end of a series of party meetings, Deng appeared to have secured most of what he wanted in having younger officials appointed to key party positions.

Although he is the chairman of two party advisory commissions, it is not Deng's formal titles or positions that secure his power. In the end, it is something more intangible -- his experience, his prestige, and his wide network of personal contacts and influence throughout the top levels of the Army, Communist Party and government bureaucracy. According to Chinese outside the government, it also helps that Deng's pragmatic approach to economics has produced results and generated popular support.

Many of Deng's actions seem to be in reaction to the governing style of the late chairman Mao Tse-tung, who accumulated power and created a personality cult to a degree considered both unparalleled and dangerous by Deng and his colleagues. Once there were portraits of Mao throughout China. Today, one cannot find portraits of Deng Xiaoping.

To prevent a return of "one-man rule," Deng is trying to build up a balance of power among men and institutions. But his means of achieving that goal are highly personalized because this is still a country that operates more on the basis of personal relations than on rules, laws, and formal titles.

Several years ago, Deng in effect traded in two of his titles, vice premier and party vice chairman, to pressure others in rival positions to resign. Deng dropped the titles without relinquishing real authority.

Deng formally derives power first from his position as the leading member of the five-man standing committee of the Politburo, the party's highest decision-making body.

He is also the chairman of the Central Advisory Commission, a consultative position that carries little real power, and chairman of the Communist Party's Central Military Affairs Commission, a position giving Deng command of the Army.

In his speech during the recent party conference, Deng appears to have made compromises with those who have pushed for a harder ideological line. He was unable or unwilling to fill all of the vacancies that he and his allies managed to open up in the Politburo.

But until now at least, Deng's ability to compromise has proven to be a strength rather than a weakness, according to observers here. His style over the years has been to push hard for what he wants and then to give a little. He seems to have learned from the mistakes of Mao, who pushed confrontations to the point where the country ran out of control.

Some diplomats argue that it is a sign of Deng's confidence that he allowed senior economic planner Chen Yun to air disagreements within the party over the pace of economic reform in a hard-hitting speech. Chen might act as a useful safety valve and a means of "keeping others honest," said one diplomat.

"One of Deng's greatest qualities lies in the fact that he is able to make a tactical retreat when necessary in order to keep the essence of his policies intact," said another experienced diplomat and China expert here.

Also, unlike Mao, Deng has learned to isolate his opponents and then ease them out of power without insulting or dishonoring them. This method has made it difficult to challenge Deng.

There appears to be no organized opposition to Deng and his two senior proteges, party general secretary Hu Yaobang, 70, and Premier Zhao Ziyang, 66.

But a latent oppositon does exist. At this point, Deng and the other reformers are encountering serious problems, including inflation, corruption, a sharp drop in foreign exchange reserves, and an excessively high economic growth rate.

A challenge could come from ideologues who still have a voice at high levels of the party, such as Politburo member Hu Qiaomu, an orthodox Marxist, or party Secretariat member Deng Liqun, who was ousted as head of the party's propaganda department in July.

More likely are challenges to Deng Xiaoping's successors once he passes from the scene, from officials who see their power diminished as a result of the reforms or from the military.

It is widely believed that Deng has not given up his chairmanship of the military commission because many military men are unlikely to accept the leadership of a man like Hu Yaobang, who has no major military credentials.

Deng's successors do not yet have full control of the Army. They have not yet been fully tested. Much of the economic reform program sponsored by Deng is still in a formative, experimental stage. And despite Deng's attempts to build up institutions and other leaders, he still provides the major element of stability.