PRESIDENT Jiang Zemin has been criticised for doing Shanghai too many favours. Sources in Beijing said the accusations that he was propagating a 'Shanghai Faction' had come from competitors at the top level of the Communist Party. Mr Jiang, who is also party General Secretary, has tried to parry the attack by saying patriarch Deng Xiaoping began the 'Shanghai first' policy. 'It was comrade Xiaoping who initiated the idea of making Shanghai the national pace-setter of reform,' Mr Jiang reportedly told his intimates. 'Deng said he regretted not having made Shanghai a Special Economic Zone [in the early 1980s] and that the central authorities must make up for lost time by giving Shanghai favourable policies.' However, Mr Jiang's foes, who include politicians both in Beijing and the regions, have claimed he is building up a Shanghai dynasty. This is a reference to the large number of Shanghai officials he has promoted to central party and government units since the early 1990s. By contrast, Vice-Premier Zhu Rongji, who, like Mr Jiang, is a former party boss and mayor of Shanghai, has been praised for not favouring his former associates. The same has been said of Liu Ruihuan, a member of the Politburo Standing Committee, for not promoting or doing special favours for associates in his former power base of Tianjin. There are indications, however, that Mr Jiang has at least superficially tried to deflect criticism. The President has reportedly scolded Shanghai's leaders for going beyond the authority granted the municipality for extending favourable treatment to foreign enterprises in areas including retailing and banking. Shanghai cadres have also incurred Mr Jiang's ire for their premature announcement of several autonomous powers given to them by Beijing. Mr Jiang spent two days consulting Shanghai officials upon his return from New York last month. Meanwhile, sources close to the Deng family have denied recent reports that the 91-year-old went to Shanghai last month. They said that while Mr Deng's health had stabilised, he was under intensive care in his ward-like house in the capital. Moreover, the number of doctors and nurses attending the patriarch had increased in late autumn by at least 50 per cent. Mr Deng's health usually takes a turn for the worse in the winter and his doctors have recommended that he spends it in Shanghai. However, Mr Deng is too frail to make the train ride of more than 12 hours to the East China metropolis as was the case last winter. Western diplomats in Beijing said stories about Mr Deng's 'recovery' had been floated by parties that stood to gain from the patriarch's longevity.