China's burgeoning film industry last year won 48 prizes at international movie festivals. Gradually liberated from decades of state controls, Chinese cinema has become a major force in modern culture--not only in Cannes and Berlin, apparently, but also at home. An editorial in the China Daily last month declared, "The main characters in many films are ignorant, barbarous and inhuman." Minister of Propaganda Ding Guan'gen exhorted China's filmmakers last March to emphasize "the lofty ideals and beliefs and excellent working style of the Communist Party."

That would be a fascinating challenge for a budding Sino-cineast, and the notion must bring cheer to competing auteurs hoping to take away next year's Golden Palm or Silver Bear. But for many of China's 1.2 billion citizens, such pronouncements from on high elicit familiar anxieties. The communist leaders of Beijing have vast power, relatively little accountability to the populace, and strong opinions about what is best for China--views that have rarely been unanimous in the 47-year history of the People's Republic. When the big shots start battling, the thunder comes down the mountain in lofty-sounding official declarations and freshly minted slogans. In few other countries are such exhortations used so frequently to signal coming political changes, possibly enormous ones, and the rumbling has been deep and steady for months.

The chief sloganmaker of the moment is President Jiang Zemin, 70, who is determined to succeed ailing leader Deng Xiaoping, 92. Lately, Jiang has been promoting the idea of a "spiritual civilization" for China--a direct attack on the moneymaking culture that Deng created with the economic reforms he kicked off in 1978. In May Jiang commanded Chinese to "talk politics." The meaning of that message: China must return to the days when policies were judged largely on their Marxist merits, as under Mao Zedong, and abandon Deng's ideologically color-blind emphasis on productivity, development and the need to build a strong Chinese economy in any way possible, no matter how many people get rich in the process.

On the rhetorical plane, Jiang appears to be calling for a virtual de-Dengification of China and a return to the ideology-driven ways of the Mao era, which led to such catastrophes as the Great Leap Forward and the Cultural Revolution. Fortunately, Jiang's slogans have been followed up with relatively minor countermeasures to Deng's reforms. The President has crusaded against foreign programs on television, encouraged journalists to act as "engineers of the people's minds," cracked down on separatism in Tibet, and launched an anticrime drive in which suspected criminals, including thieves, murderers and corrupt officials, have been arrested and, in at least 1,000 cases, executed.

As a general rule in China, however, the longer the rhetoric hangs in the air, the deeper the divisions among the leadership on how China should be governed. The Marxist hard-liners whom Deng tried to outwit for 18 years--not entirely successfully--are still around and capable of exerting significant power. Their support is crucial to Jiang if he wants to remain in power for more than a few months after Deng dies. A party plenum will be held sometime this month--the date is rarely announced in advance--and Jiang will try to woo the hard-liners with a draft document on Strengthening Spiritual Civilization, in which Jiang's philosophy is favorably compared with Mao's and Deng's. That meeting is a dry run for the crucial 15th party congress, scheduled for late next year, in which Jiang hopes to solidify his place at the top and fill lower slots with loyalists.

Spirituality may not be enough to satisfy the hard-liners, who include party stalwarts, the military and the six surviving members of the "eight immortals," veterans of the Long March who are technically retired but still wield influence. These figures have lost little of their commitment to strict socialism and Communist Party control of China. (On the latter point, Deng was in full agreement.) If anything, 18 years of reforms and the swift rise of an ebullient and chaotic market economy have given the veterans a profound scare.

Those fears are articulated in two lengthy documents that have unofficially been circulating throughout China for months. The first, whose author is unknown, states the hard-line case: economic reforms have weakened the state's control of the economy and created a capitalist class that numbered more than 5 million in 1994. "As soon as the time is ripe," the paper warns, "the capitalist class will 'root up' the entire Communist Party with the support and cooperation of the international bourgeoisie, directly and openly replacing proletarian dictatorship with capitalist dictatorship." The second document, written by Wu Yifeng, a professor at the People's University, concludes that the bourgeoisie have "wormed their way" into the Communist Party. Both texts are full of statistics--and some justifiable alarm. "The diagnosis is accurate," says Jiang Wenran, a China-born political scientist at Canada's University of Alberta. "The former Soviet Union [which collapsed in 1991] is brought up repeatedly as the possible outcome for the Chinese Communist Party. Thus these documents might have become a wake-up call for those on the top."

A reckoning is plainly inevitable for China, considering the gargantuan contradictions of Deng's vision. Deng inherited a poor land traumatized by 10 years of the Cultural Revolution, but one with virtually no class distinctions; he bequeaths to his successor a country in the throes of a capitalist revolution that has benefited millions while making many more, particularly in the still underdeveloped inland regions, dangerously disgruntled. China's "iron rice bowl," its system of lifetime job and income security, was provided by state-owned firms; under Deng's modernizations, those companies must reform or perish, and unemployment is already at least 5.3 million, or 3% of the work force--a relative high for China. The Communist Party believes it should control the major levers of society, including information, but it no longer does: the market has created a vast, quasi-underground publishing industry, for example, which has flooded China with pornography and steamy Danielle Steele novels. And the party's moral basis for rule, socialist egalitarianism, was virtually tossed out by Deng with the bath water of central planning.

The big question is whether that ultimate reckoning will come from the populace, as feared during the 1989 Tiananmen Square protests. (Today the students are largely quiet, but there are increasing incidences of peasant riots in rural China and wildcat labor strikes in the cities and towns.) Or alternatively, will the party attempt to roll back Deng's policies, often described these days by bureaucrats as "blind," to restore a semblance of communist order and stability? His son Deng Pufang, a paraplegic who is chairman of China's Federation of the Disabled, fears the latter. In a speech this summer, he charged that Beijing's current policies "wholly negate" his father's legacy. Others think that Deng's mere existence, however enfeebled, has kept the government from any significant change in course. "Deng has in fact already departed," says a Chinese political analyst in Beijing. "But with him around, everything seems on hold. Top leaders dare not make tough decisions. What we have is a fragile stability, an impasse."

If there is an issue that shows the leadership's bind--how to "talk politics" and still get growth from economic freedoms--it is the problem of the state-owned companies, which number more than 100,000 and employ at least 100 million citizens. Nearly half are in the red; losses last year totaled $10 billion. Deng was in favor of drastic action. In the mid-1980s, official thinking was that money-losing units should be allowed to go under, and in 1988 a bankruptcy law went on the books. Nearly 1,000 firms folded in the following five years, putting thousands of workers out of their jobs, company-provided homes and free health care in a country with no other safety net. Simultaneously, China was experiencing a worrying wave of migration to the cities by jobless rural workers, who numbered some 100 million. A new policy to reform the state units was shelved in 1995, and Deng's successors are now treading carefully. In the past year, a parade of national figures including Jiang, Premier Li Peng, Vice Premiers Zhu Rongji and Wu Bangguo, and the head of the National People's Congress, Qiao Shi, have embarked on highly publicized tours of Liaoning province, where state-run industry is concentrated. Shaken by what they saw, they decided to crack open the credit lines simply to keep the factories going and the workers employed.

Aside from such tangible effects as unemployment, the handling of state-run firms has become a burning ideological issue. "How can a society eliminate the system of exploitation and polarization and finally reach common prosperity," demands Wu Shuqing, a conservative economist and former president of Peking University, "if its economy is based on private ownership?" In the two lengthy circulars making the rounds in China, Deng's legacy is severely criticized on that basic issue. The initial screed, which was written in September 1995 in the form of a "10,000-character" letter to Jiang, reminds the President that the share of the state sector in industrial production dropped under Deng from 76% in 1980 to 48.3% in 1994, while the private sector mushroomed from 0.5% to 13.5%. (Collective and joint-venture enterprises make up the remaining 38%.) The letter charged that local capitalists and foreign investors would command a quarter of industrial production by 2000. The anonymous writer--rumored to be former Propaganda Minister Deng Liqun, although he denied authorship last month--concluded that the socialist hierarchy is unwittingly delivering the country to class enemies within the borders ("It won't take too long for these people to organize open bourgeois political parties") and abroad. Foreign investment, it argued, "will make it easier for China to come under foreign control ... when China and the countries of foreign investors become antagonistic."

Jiang's response, so far, has been to tout his own ideological correctness as encapsulated by the "spiritual civilization" campaign, which combines many familiar communist command marches of the past. Policies should be based on ideology, not effectiveness; vigilance is required against those two old shibboleths, "bourgeois liberalism" and "spiritual pollution" (which refer to such Western anathemas as free speech, nationwide elections, violent crime and the Baywatch television series). In addition, Jiang is beating the drum of self-reliance and Chinese nationalism, saying that only a strong China can overcome the humiliations of past centuries. He has also revived the practice of identifying proletarian heroes for the masses to emulate. One of these, Shanghai plumber Xu Hu, earned a meeting with the President last April in which he was honored for his unstinting devotion to repairing leaky toilets.

Whether these high-flying rhetorical gestures presage a reversal of Deng's policies depends on Jiang's ability to solidify his position. Until then they are slogans of a special Chinese kind, designed to make the populace believe that the Communist Party still stands on the scaffold of ideals that Deng did much to dismantle. "It's an attempt to recapture the ideological high ground, but without substance," concludes a Western diplomat.

Deng himself, for all his strengths, was also forced into similar displays whenever the hard-liners became overalarmed by his policies. In 1983, to combat Western influences pouring into a newly opened China, Deng waged a campaign against "spiritual pollution" in which many petty criminals were seized and executed. Student protests in Beijing in 1986 prompted another round of arrests, and after the Tiananmen Square protest, the first-year classes at several universities in Beijing and Shanghai were sent away to military camps for ideological training, a practice reminiscent of the Cultural Revolution. In 1992 disagreement was so deep on Deng's continuing liberalizations that the leader, then 88 and frail, decided to make a tour of the booming southern provinces to demonstrate that reforms should continue. Hard-liners were in charge of the official media, and Deng's momentous trip wasn't widely reported within China for a month. If Jiang inherits Deng's mantle, he will also inherit China's problems, leading him to a major decision: whether to accept his predecessor's policies or jettison them for his own future. It all depends on what will best deaden those rumbles from on high.

--Reported by Jaime A. FlorCruz and Mia Turner/Beijing