The Chinese government has arrested and interrogated Chinese representatives of a private American organization in Beijing in what some knowledgeable exiled Chinese sources say is an effort to link ousted General Secretary Zhao Ziyang to "foreign subversive forces." New York financier and philanthropist George Soros, who founded the Fund for the Reform and Opening of China (China Fund) in Beijing, said the Public Security Ministry has detained and interrogated his personal representative, Liang Congjie. Others connected to the fund have been charged with counter-revolutionary activities, he said. Zhao supporters in exile have expressed concern that the government is attempting to link the China Fund to the Central Intelligence Agency in an effort to stage a "secret show trial" showing that Zhao and his deputy, Bao Tong, colluded with foreign elements to mount a counter-revolutionary movement. If found guilty, Zhao and Bao could be executed. In a telephone interview, Soros denied CIA involvement in the China Fund. He said the organization's activities were sanctioned by the Chinese government and that he has sent a letter to China's senior leader, Deng Xiaoping, that was dated Aug. 2 and defended the integrity of the China Fund. In an effort to dispel suspicions, Soros said he offered Deng the opportunity to examine in detail the fund's operation. Soros, an Eastern European emigre who funds similar programs in Hungary, Poland and the Soviet Union, founded the China Fund in 1986 with Zhao's blessing. Soros gave the fund a $1 million endowment, which it used to promote cultural exchanges and sponsor research projects in conjunction with China's Institute for Economic Structural Reform, an influential liberal think tank supported by Zhao. The institute was headed by Chen Yizi, an adviser to Zhao who is believed to have escaped to the West. Chinese Communist Party hard-liners have long considered the institute a hotbed of "bourgeois liberalism" and, after Zhao's ouster, moved to dismantle it. At least 14 members of the Institute of Economic Structural Reform have been arrested, exiled Chinese sources said, in the government's effort to gather "evidence" against the China Fund. These sources said the accusation against the China Fund is contained in a confidential report by Wang Fang, director of the Public Security Ministry. The report has been circulating at the provincial and army level in China, the sources said. The allegation that the China Fund was a tool of the CIA first surfaced in 1987, sources said, in an attempt by Zhao's opponents in the Communist Party to discredit him. Zhao, 70, lost a power struggle with Li Peng in May and was stripped of all party posts in late June. The Chinese Communist Party Central Committee accused him of fomenting political turmoil and said his mistakes would be "further looked into." The allegation against the China Fund resurfaced at a meeting of the Standing Committee of the Politburo in late June, sources said, when Li Peng decided to use the charge against his fallen rival. On July 3, Public Security Minister Wang issued the confidential memorandum containing the accusation, the sources said. In a July speech reported on Beijing television, Wang urged public security departments across China to root out "domestic forces hostile to the government" and guard against "imperialists and various hostile forces abroad." He also called for a timely crackdown on conspiracy between the two groups. Chinese sources said Li Peng's government has set out to build a criminal case against Zhao and Bao in order to punish them harshly, to frighten their sympathizers within the party and in intellectual circles and to justify the severity of the army's crackdown in Tiananmen Square. The regime's official version of what led up to the June 4 massacre was clearly spelled out in an address June 30 by Beijing's mayor, Chen Xitong, to the Standing Committee of the National Party Congress. "There was a tiny handful of people both inside and outside the party who stubbornly clung to their position of bourgeois liberalization and went in for political conspiracy," Chen said. "Echoing the strategy of western countries, they colluded with foreign forces . . . to stir up turmoil in China, overthrow leadership by the Communist Party and subvert the socialist people's republic." Zhao supporters in the West said the former general secretary has been under house arrest in the Zhongnanhai Compound in Beijing and his deputy, Bao, was arrested May 28. Bao, formerly director of the Institute of Political Restructuring, a think tank advocating political reform, was considered by hard-liners opposed to change as the most dangerous of Zhao's advisers, Chinese sources said. The current government considers the two reformers guilty of promoting "bourgeois liberalization" and of disclosing state secrets. Zhao is accused of telling Soviet President Mikhail Gorbachev in a meeting May 16 that decisions of great import lie ultimately with Deng. Bao is accused of leaking to student protesters the government's decision to declare martial law. But exiled dissidents said they fear that Li Peng is bent on linking the two men with foreign anti-communist organizations in order to sentence them to death.