BEIJING, SEPT. 7 -- China announced today that hard-line Premier Li Peng had been dismissed as head of a key economic-policy research commission.
Chinese economists and foreign diplomats said the changes were not a blow to Li because the commission had recently ceded its place as China's top economic advisory body. One Chinese economist said Li had stopped acting as its head about two months ago.
National radio said Chen Jinhua, 61, president of the China Petrochemical Corp., had replaced Li as head of the State Commission for the Restructuring of the Economy. Chen is a former vice mayor of Shanghai.
The standing committee of China's National Assembly decided to remove Li from his post as commission chairman, national radio said.
Diplomats said there had been no overt signs that Li's star was falling, although his popularity remained low among Beijing citizens who blame him for ordering the military crackdown on democracy demonstrations in June 1989.
Li had been instrumental in advocating a hard line against last year's democracy movement and became extremely unpopular with demonstrators, who repeatedly called for his ouster. Li was shown smiling this evening on television news broadcasts as he received Iraqi Deputy Prime Minister Taha Yassin Ramadan.
Chinese economists said the most powerful policy-research commission here is the State Council Development Research Center, which reports regularly to Li.
The influence of the State Commission for the Restructuring of the Economy has plummeted since the military crackdown and the downfall of former Communist Party chief Zhao Ziyang, who once headed the economic body and was Li's rival.
Diplomats said Li's exit from the post might be designed to shift him from the economic limelight at a time when China's financial and industrial outlook is grim.
An austerity program launched by Li in late 1988 managed to reduce inflation but drove industry to the brink of recession and forced many small factories to close.
The program attempted to return much of the economic decision-making power to the central government after a decade in which local and provincial goverments had gained a greater say in economic affairs.