China's Premier Zhao Ziyang today reaffirmed his country's commitment to economic changes but cautioned against any high expectations for greatly improved living standards.

In a major two-hour-long address at the opening of the National People's Congress on the nation's new five-year plan for 1986-1990, Zhao declared that China's current shortage of foreign exchange "will remain a prominent economic problem for a long time to come."

The new five-year plan reported by Premier Zhao is the first such plan to be made public from the start. The 1981-1985 plan was disclosed two years after it went into effect. Other plans have never been made public.

Zhao said that the draft five-year plan calls for industrial and agricultural output to increase by an average of 6.7 percent annually, much less than half of what it was last year. The gross national product is to rise at a rate of 7.5 percent a year, slightly lower than the rate achieved during the earlier five-year period, Zhao said.

"There is still a shortage of energy and of raw and semi-finished materials," said Zhao, addressing the delegates in the Great Hall of the People. "The capacity of transport is grossly inadequate."

Hours before Zhao spoke, Deng Xiaoping, the country's senior leader, made his first public appearance in the Chinese capital in three months and said the country's altered economic policies would continue after his retirement. Deng, 81, said he was now considering when to retire.

Deng, looking well, said he had purposefully disengaged himself from day-to-day affairs so that younger leaders could take on more responsibility.

"This is to show that the current policies in China do not hinge on myself alone," said Deng shortly before entering a meeting with Denmark's visiting Prime Minister Poul Schluter.

In January, speculation about Deng's health arose after he failed to make any public appearance for several weeks. In February, Chinese television showed him celebrating the lunar New Year in his home province of Sichuan. In March he was shown on television planting trees as part of a forestation campaign. But today's appearance was his first meeting with a foreigner in more than three months.

In his speech, Zhao said the net income of Chinese farmers will rise by 7 percent a year from 1986 to 1990 and wages of urban workers will rise by about 4 percent. The rapid growth of agriculture, the foundation of the economy, had created "very favorable conditions for the all-round, steady growth of the economy as a whole," he said.

But Zhao cautioned that "for a long time to come our production technology and labor productivity will remain at a relatively low level.

"For many years to come the diet of our people cannot improve too quickly, and there can be only a gradual increase in the consumption of meat, poultry and eggs," he said.

With respect to clothing, Zhao said the people "should be encouraged to wear more garments made of cotton, synthetics and blends while consumption of woolen fabrics and leather products can only be increased to a certain extent."

As for housing, the premier said that conditions should be steadily improved but that residential building standards "should not be too high and rooms should not be too large."

"In short, the state should use economic policies and levers and some administrative measures to guide the people toward rational consumption patterns," he said.