THE new chairman of the National People's Congress, Mr Qiao Shi, has made a bold bid to expand the power of the legislature and promote ''socialist democracy''. Mr Qiao, ranked third in the Communist Party's politburo, vowed at the first session of the congress' standing committee yesterday that the parliament ''should, as an institution of national power, develop its supervisory role'' over the Government. The leader of the party's moderate faction also pledged to reactivate the old slogan of ''rendering decision-making democratic and scientific''. ''We must perfect the supervisory mechanism of the NPC Standing Committee,'' he said. ''We must do a good job of legal supervision, so as to guarantee the effective implementation of the constitution and the laws.'' Legal sources in China said not since Mr Peng Zhen, who was NPC chairman in the mid-1980s, had a head of the legislature put so much emphasis on the Chinese conception of the rule of law. They said Mr Qiao, a former head of the party's legal and security establishment, was highlighting the chronic phenomenon of party and government cadres disobeying the law. The legislative chief said supervisory functions were exercised by the congress on behalf of the people. ''Strengthening this supervision has a positive effect on correct decision-making [by the party and Government] and on lessening mistakes,'' he said. ''It is beneficial for the rational and efficient functioning of the state structure and for the prevention and abolition of corruption.'' Mr Qiao said a good legal system was necessary for the implementation of the socialist market economy. Adequate economic laws, he claimed, would guarantee fair competition, speed up the growth of markets, build up a market economic order, perfect macro-economic adjustment and control and protect the rights of citizens. The NPC chairman said he and fellow deputies would boldly borrow legislative experience in foreign countries. China analysts said it was significant that Mr Qiao had revived the key slogan on decision-making first raised by his immediate predecessor, Mr Wan Li, in the summer of 1986. He pledged that the work of the 134-member NPC Standing Committee - the nerve centre of the legislature - would be marked by the free exchange of views. ''We must fully develop democracy, so that everybody is free to air different views and the collective wisdom can be crystallised after sufficient discussion and interchange,'' Mr Qiao said. He added legislative procedures would be conducted according to democratic formats, processes and rules. Moreover, the chairman indicated, the NPC Standing Committee would ''accept the supervision of the broad masses'' and increase liaison and communication with the 2,978 NPC members as well as ordinary citizens. ''All kinds of work of the NPC Standing Committee have as their point of departure and goal the fundamental interests of the people and their common will,'' Mr Qiao said. Political analysts believed Mr Qiao was trying to establish the NPC as a ''third centre of power'' which could one day rival the authority of the Communist Party and the central government. ''If Qiao Shi can deliver his promises, the NPC could check and balance the powers of the party and the Government,'' a Chinese source said. ''And the Congress system could serve as an effective channel for airing the people's views without Beijing having to introduce Western-style political institutions.'' The source added that Mr Qiao was set to become the most powerful congress chairman since 1949. Moreover, the congress could become a base from which the relatively liberal cadre could mount a challenge against the leadership of party General Secretary Mr Jiang Zemin.