Thousands of Chinese children are dying from medical neglect and starvation in state-run orphanages, according to a report by Human Rights Watch/Asia, a U.S.-based monitoring group.

The 331-page report charges that a majority of children admitted to a Shanghai orphanage in the late 1980s and early 1990s died within a year and that the high death rate is typical of China's orphanages. The report alleges that Shanghai orphanage officials carried out a policy known as "summary resolution" that singled out children for death by starvation to keep the orphanage population stable. To cover up those cases, orphanage staff falsified medical records to blame the deaths on "congenital malformation of the brain," the report says.

The New York-based Human Rights Watch describes itself as an independent watchdog group that was established in 1978 to monitor and promote human rights around the world. It is supported by private contributions and accepts no government funds. It is one of the leading human rights monitors in China and has been a vigorous critic of Chinese government policy.

The report relies heavily on material from Zhang Shuyun, a 53-year-old graduate of Beijing University of Medical Science who worked in the Shanghai Children's Welfare Institute from 1988 to 1993. Zhang left China last year with a large number of orphanage documents, medical records and internal government reports about conditions there. Ai Ming, a disabled orphan who grew up in the Shanghai orphanage and who left China last year, provided supporting testimony and photographs he took of dying children in 1992.

Separate death statistics come from a 1990 internal document printed by the Civil Affairs Ministry, which runs China's orphanage system. A Human Rights Watch researcher discovered the document recently in a major Asian library outside China. It says that the number of children who died at state-run orphanages that year equaled a third of the total orphanage population and more than half the number of newly admitted children.

The report was meant to be released Sunday, but a news service reported on the content Friday.

Chinese State Council's information department responded angrily to the report Friday, calling it "an attempt to influence public opinion and swindle the masses" and motivated by "hostility towards the Chinese people." The State Council office said that even though many of the children are seriously ill when they arrive at the orphanage, the mortality rate at the Shanghai Children's Welfare Institute was down to "around 4 percent." The Chinese government has invited foreign journalists to visit the Shanghai facility on Monday.

In an interview, Wang Jianqun, director of the Shanghai Children's Welfare Institute, called the report "completely false." Han Weicheng, who ran the Shanghai orphanage when Zhang worked there and who Zhang accused in the report of sexually abusing children and ordering the falsification of medical records, said in a separate interview that Zhang's accusations were "slanders" and "insults."

The Human Rights Watch/Asia report is the fourth major account of abuse and death of children at Chinese orphanages. In 1993, the South China Morning Post published photos and an account of "dying rooms" at an orphanage in Nanning in Guangxi Province. Staff members told the Hong Kong newspaper that 90 percent of the baby girls who arrived at the orphanage died there. The Morning Post said in a subsequent report that conditions had improved.

Last year, British documentary television crew obtained footage of orphanages they did not identify by posing as American charity fund-raisers. The crew broadcast pictures of infants suffering extreme malnutrition and of children tied down in chairs, soaked in their own urine.

An article last fall in the German magazine Der Spiegel based on an eyewitness account described similar conditions in a Harbin orphanage that the magazine called part of "the children's gulag."

In each case, the Chinese government denounced the reports.

The Human Rights Watch report gives an unusual amount of detail and quotes Chinese insiders on the record criticizing government practices. It also describes the struggle by those insiders to change conditions. Lawyers and officials from the Civil Affairs Ministry, the city government and the Shanghai General Labor Union all investigated. Human Rights Watch reprints a report by lawyers for the Labor Union that said the welfare institute "has serious problems. Disabled children are being abused and the number of children dying has increased each year."

In the end, their efforts had little effect. The director, Han, has been promoted. Zhang was criticized by her superiors. The report also alleges that the then-mayor of Shanghai, Wu Bangguo, took part in an effort to cover up conditions at the orphanage. Wu has since been promoted to one of China's vice premierships.

Zhang, who has been supporting herself in the United States by giving Chinese lessons, said in an interview Friday night from London that when she arrived at the Shanghai Children's Welfare Institute she noticed that the children there were "sacks of bones" and often tied to their beds. She said she saw several starve to death.

The report adds that Zhang performed medical checkups on the children only once a month. She cited as an example the case of a 1-year-old girl named Sun Zhu. Zhang examined Sun on June 7, 1989, one day after the child was admitted. Zhang said that Sun appeared dehydrated, perhaps from a bout of diarrhea, but otherwise in reasonable condition. A month later, the baby was emaciated. On the third exam Aug. 12, the baby was so hungry that she tried to chew Zhang's hand. She died later that day. The cause of death entered in the medical record was "congenital malformation of brain."

The report cites medical records Zhang took as showing that 153 children died at the orphanage in a 13-month period beginning December 1988, shortly after her arrival. Most were less than 2 months old at the time of admission. During a second period, from November 1991 through October 1992, the report says that 207 children died. Over 80 percent died within a year of admission, the report says.

The State Council denied the report's charges Friday. It did not give figures for that period, but it said that the Shanghai orphanage had 402 residents in 1994 and released 183 for adoption, family reunion, employment in the community or transfer to other institutions. The government said that in 1995, there were 512 residents and 166 were released, including 139 who were adopted.

Countering an image of medical neglect, the government said that 87 children were operated on for congenital heart defects, clubfoot and other diseases.

Former orphanage director Han said: "There are some problems that aren't curable. You should understand that I'm innocent, and some deaths I'm not responsible for."

But the Human Rights Watch report says that many deaths were attributed to diseases or conditions that should be easily treatable. In the 1988-89 period, the leading cause of death was cited as "congenital maldevelopment of brain." In the 1991-92 period, it was "malnutrition." Other causes of death cited included "mental deficiency" and cerebral palsy.

Zhang said that the orphanage staff frequently gave children sleeping pills, especially when the children were suffering from hunger. She said that one child overdosed on the pills.

Children who complained about abuses or were accused of misbehavior were falsely diagnosed as "mentally ill" and transferred to psychiatric hospitals.

Foreigners and Chinese people who have visited Chinese orphanages have said that certain wards are closed off, allegedly because the children in those wards are sick. Many suspect those rooms are closed to conceal evidence of abusive treatment.

Some Chinese officials who have visited orphanages acknowledge that conditions are often inadequate. Funding and staff training are often insufficient, especially in rural areas, some officials say. But they add that orphans compete for resources in a country where about 80 million people live in abject poverty and where child mortality rates run as high as 70 out of 1,000 in some rural areas.

Moreover, the children given up by Chinese parents are usually sick or disabled. Because of China's efforts to impose a one-child policy, few parents are willing to part with healthy children. Foreign experts estimate that 80 percent of the orphanage residents are disabled in some way. Most of the healthy orphans tend to be girls, who are not valued as much as males in China's tradition.

Only a small fraction of China's orphans live in the country's roughly 90 orphanages, called children's welfare institutes. Far more live in the approximately 1,100 welfare institutions that also serve the elderly and mentally disabled. Most of those institutions are poorly staffed or ill-equipped to deal with physical and emotional needs of young orphans. Altogether, welfare institutions of all sorts hold about 20,000 of the 100,000 orphans China says it has. The report calls the rest "missing" but international experts say that other orphans stay in informal settings arranged by local officials depending on local resources and inclinations.

UNICEF is trying to negotiate a program with Chinese officials to train orphanage staff members, but talks were postponed earlier this year after the British Channel 4 documentary was rebroadcast. Several foreign volunteer groups are working in Chinese orphanages, including Shanghai.

Fear of reprisal prevents the people with the most access to Chinese orphanages from discussing conditions. Many are working for adoption agencies or are parents of adopted children who fear that speaking out about orphanage conditions will endanger adoption programs. About 5,000 Chinese children were adopted by foreigners last year; the vast majority went to the United States. Canada was the next-largest destination.

The Shanghai Children's Welfare Institute has been used as a showcase orphanage for foreigners since 1993 to raise money through adoptions, the Human Rights Watch report says. An American must pay about $3,000 in China to adopt a child. The money is supposed to go the orphans, but the report says that Han had a large personal checking account. Human Rights Watch says that the changes at the Shanghai orphanage were "cosmetic." CAPTION: HUMAN RIGHTS WATCH This boy at the Shanghai orphanage died 10 days after being photographed in July 1992. Human Rights Watch said the cause of death was not given.ec