China battles Deng rumours

The Chinese Lunar New Year is traditionally a time for family celebrations. But with three weeks to go, the 1995 festival could have much greater portent. Will this be the first time for years that China's leader, Deng Xiaoping, fails to make an a nnual appearance on prime-time television?

For months, rumours have been swirling that 90-year-old Mr Deng is not long for this world. Yesterday, Japan's best-selling daily newspaper, the Yomiuri Shimbun, reported that the ailing patriarch was in hospital last month, too ill to see his heir apparent, President Jiang Zemin.

The newspaper added that, in contrast to previous years, Mr Deng would, therefore, not take top billing on the 7pm television news on this Lunar New Year's Eve - 30 January.

The Chinese Foreign Ministry yesterday dismissed the Japanese report. "Comrade Deng enjoys a good health. Those reports ...are groundless," a spokesman said. The Hong Kong stockmarket was not convinced, and fell 2 percentage points.

The last time Mr Deng was put on show for the Chinese population was on Lunar New Year's Eve in 1994. Pre-recorded film footage showed a feeble, semi-lucid elderly man, propped up by his daughters, who interpreted his mumbled words for the benefit of other listeners. Television audiences were shocked at his decline.

It is widely believed that Mr Deng has not recovered his vigour over the past year, despite the official reports that he is hale and hearty. With speculation rife about possible power struggles in the post-Deng era, the authorities appear to have a choice.

This Lunar New Year they can broadcast pictures of a yet more infirm figure, preparing people for his imminent demise and demonstrating their much-vaunted confidence that there will not be political instability after his death.

Alternatively - and the Japanese newspaper report may be part of this scenario - the authorities may have decided to brace the public for the fact he is not going to appear on television this Chinese New Year. The shockwaves will be felt in financial markets, too.