When powerful men fly too close to the sun, two things can happen: they veer away in time, or they come crashing down. China's most daring high-flyer, Premier Zhu Rongji, has come very close. He likes the altitude--it energizes him--and over the last five years he seemed to defy gravity as he pushed his country's economic reforms further and faster than anyone thought possible. To his many admirers at home and overseas he was the enlightened mandarin who could single-handedly break through the red tape and propel China's economy into the next century. Even the regional economic crisis didn't seem to faze Zhu, as he laid out in March an ambitious program to make state-owned firms profitable, restructure the debt-ridden banking system, halve the bureaucracy and privatize the housing market--all by the year 2000.

But six months later "Zhu-phoria" has virtually disappeared, and there is an unmistakable smell of scorched feathers in Beijing. Zhu has hit his ceiling.

With the negative g-force of some 200 million urban and rural unemployed pulling at him, a sharp decline in exports and foreign investment, a change-resistant culture of corruption and an unfriendly economic environment in the rest of Asia, Zhu has been forced to reverse or put on hold all his key reform policies from March. Mounting reports of labor unrest around the country terrified his comrades in the leadership, whose fear of luan--chaos--approaches the phobic. "With no functioning social welfare net," argues a Chinese economist, Zhu's reforms were "suicidal."

There has been no open criticism of the man known simply as "the Boss." Sometimes silence is more ominous. At a meeting of the Communist Party leadership two weeks ago, the official topic for discussion was improving farmers' welfare--the issue of preventing state industry and the entire banking system from disappearing into a black hole was not even mentioned in the final communique. But everyone knows where the buck stops in China's economy--not least Zhu himself, who coined his own version of Harry Truman's motto before he became Premier in March: "I have 100 coffins: 99 for corrupt bureaucrats and one for myself."

The first hint of backtracking came in July, when the government officially denounced "the wrong trend of selling small state-owned enterprises," because too many workers were being laid off by the new private owners. Instead, banks were told to continue "policy loans" to some loss-making factories just to keep people at work. So much for bank reform. Then it became clear that the lifting of state-subsidized rents (the average Chinese family pays $12 a month for housing) would have to be postponed because free-market house prices were unrealistic. In September minimum selling prices were imposed on a wide range of products, from cars to sugar, in an attempt to stop factories from dumping excess inventory at below cost (the controls are unenforceable, according to economists). The backtracking received an official stamp on Oct. 19 when authorities released a speech President Jiang Zemin gave over the summer on the need to stop widespread sell-offs of state-owned firms. "When faced with uncertainty they hunker down," says David Shambaugh, a China expert at George Washington University and the Brookings Institution. "Central planning, price controls--that's what they know. It is safer than the unknown."

The steely hand of control is also reaching out into the political arena: the upbeat talk of new openness during U.S. President Bill Clinton's visit in June isn't heard much anymore. Surveillance of dissidents has continued, and in September police detained activists in four provinces for attempting legally to register the China Democratic Party, which would have been the country's first opposition political group. Two weeks ago Jiang issued a call for greater political control at the village level--a far cry from the rural elections China holds and sometimes hints are the first step toward democracy.

If this summer's Great Leap Backward has forced Zhu to eat humble pie, few are gloating. In the long run it is simply too important for China and the world at large that the reforms succeed and the country remain stable. With economic recovery in the rest of Asia still tentative at best, any sign of a crash in China could plunge the whole region into worse chaos. Although the yen's recent rise has quieted talk of a renminbi devaluation for the time being, economists say that a continued drop in China's exports could force Beijing's hand anyway. This would not only represent a great loss of face for Zhu personally, but would probably cause havoc in regional currency markets as well.

Nobody is arguing that the country is poised to return to central planning reminiscent of Mao's era. Nor, even if things go badly, is Zhu likely to be airbrushed out of the official line-up, as regularly happened in times past. "Most people give Zhu the benefit of the doubt," says a Beijing official close to Zhu's advisers. "They know he faces severe difficulties and are willing to give him time to reach his goals."

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R E L A T E D S T O R I E S : ANGRY SCRIBE A writer rails against corruption