BEIJING, AUG. 5 -- Celebrating its 60th anniversary, China's Army dominated the news here this week, portraying itself as a modernizing force opening up to the outside world.

The Army, which has traditionally valued secrecy and viewed foreigners with mistrust, even announced that it would start sending promising young officers to study in foreign military academies.

But foreign military experts say the world's largest fighting force remains more than 20 years behind leading military powers in its weapons technology, top-heavy with officers who enjoy special privileges, and, in some units, plagued by poor morale.

Top Chinese military officials assert that they have succeeded in reducing the Army's ranks by 1 million men, or nearly one-fourth of the total, in an effort to make the Army leaner and more efficient.

But one foreign expert said it has apparently taken the leadership longer than was originally expected to reduce the Army's size because of resistance from officers who cherish their privileges and influence.

The Aug. 1 anniversary has produced a steady stream of television programs, books and newspaper articles describing the history of the Army and praising its heroes and efforts to modernize. The public image is one of an invulnerable, computerized fighting force moving inexorably forward.

But a careful reading of speeches by military leaders in recent days gives the impression that they are on the defensive.

Yang Shangkun, vice chairman of the Central Military Commission, said: "It is very dangerous to neglect the modernization of the military on the assumption that a large-scale war is not possible for a period of time." Yang, who is close to top leader Deng Xiaoping, warned against "a weakening concept of national defense and a slackening of vigilance." The veteran revolutionary said that "even people in the military" might not understand the need to strengthen the Army.

Some observers said Yang appeared to be fighting to maintain the Army's influence within the Communist Party as the party approaches a major congress this October. The congress is expected to produce major shifts in the party's senior leadership.

With party leaders emphasizing economic development over defense spending in recent years, the Army has suffered a number of blows to its power and prestige.

The percentage of the state budget devoted to military expenditures has dropped, according to Defense Minister Zhang Aiping. Deng and his allies have sharply reduced military representation in the party's powerful Politburo and Central Committee. Hundreds of defense factories have been diverted to civilian production.

For more than a decade, Deng has advocated the need to cut the size of the country's "bloated" army. One hidden aim of the troop cuts may be to eliminate older officers who oppose Deng's economic reforms.

In the meantime, Chinese defense officials maintain that the country still faces threats to its security.

In a recent interview with the official New China News Agency, Defense Minister Zhang said "the border areas of our country are still threatened." He accused Soviet-supported Vietnam of "making ceaseless efforts to invade us."

A foreign military attache said the morale of Chinese troops serving along the Vietnam border appears to be high, but that in some other units lacking a real mission, morale is low. Middle-aged officers in those units are unhappy with their low salaries but lack the skills needed to make a good living when they are retired from the Army, the attache said.

Poor peasants used to join the People's Liberation Army to train for better jobs, but because of prosperity in the countryside, many now prefer to stay on the farm.

A monthly magazine, "Life in the PLA," points to drunkenness and theft as problems that trouble some Army units. The magazine said members of one unit not only stole coal but also, upon demobilization, walked off with about 100 fur-lined coats. Another unit sold peasants everything from Army raincoats and desks to pots and pans.

Many Chinese resent the special privileges top Army officers enjoy, including chauffeur-driven Mercedes and much better food and housing than is available to the average Chinese.

To entice older officers to retire, Deng has had to guarantee a continuation of full pay and many of the same privileges.

Deng has made some headway, according to one American expert on China's military. June Teufel Dreyer, a professor at the University of Miami, describes the current demobilization effort as a "qualified success."

For one thing, she says, the median ages of Chinese military commanders have been lowered by eight years since 1985, with the newer people better educated than their predecessors.

Last Friday, a meeting of 4,000 people was held at the Great Hall of the People to mark the Army's 60th anniversary. Among those attending was Hu Yaobang, the former chief of the Communist Party who was forced from power earlier this year.

Senior military commanders are said to have disliked Hu, and some sources believe that this contributed to his downfall. Hu appeared at the meeting, it seems, to demonstrate unity within the Army and leadership.

But some Chinese were skeptical of all the publicity surrounding the Army.

"If the Army's prestige is so high, why do they have to keep telling us about it?" asked one Chinese journalist.