CHINA is one step closer to setting up a civil service system - but it will be a far cry from the original idea of disgraced Communist Party chief, Mr Zhao Ziyang. Sources said yesterday that the Provisional Civil Servant Regulation had been submitted to the premier, Mr Li Peng, for final approval. The new law is part of the Beijing leadership drive to revamp its bloated and inefficient bureaucracy. Under the final draft of the regulation, the 26th, the ruling party retains strong control over the recruitment and dismissal of cadres. Mr Xu Songtao, head of the policy and regulation bureau of the Ministry of Personnel, talked in length at a meeting on the distinction between China's civil service and those in Western democracies. The regulation insists that the socialist country's civil service ''is a constituent part of the Communist Party's management and control of cadres''. Both ''political attitude and merit'' are held to be major criteria in the recruitment and assessment scheme for civil servants. Political attitude is seen as more important than capability, the source said. Conservative ideologues emphasised the importance of the ''redness'' of cadres in the Government, referring to their loyalty to the dogma and ideology of the ruling party. The source said there was no clear distinction between political and administrative officials in the final draft regulations. Mr Zhao, who fell from power after the June 4 crackdown, proposed at the 13th Congress in 1987 that civil servants should be categorised as ''political officials'' and ''administrative officials''. That was in line with Western democracies' separation between political appointees and career government officials. Mr Zhao's package was seen as a step towards the separation of the party and the Government. ''What has emerged under the present regulation could be seen as a token measure to have a system of cadre management,'' the source said. For instance, the management of cadres in state enterprises would be different to that of civil servants in the state's administrative organisations, he said. That would help trim the size of the administrative structure. Under the draft regulation, the wages for cadres in administrative organs would be ''on the whole, equal'' to those in enterprises. It is estimated that cadres in administrative organs earn about 30 per cent less than those in economic enterprises. Mr Xu, however, was cautious about the implications of a sharp increase in wages for state cadres. It is likely that some cadres, anticipating a higher income in the future, would prefer not to be transferred out of the state administrative system, he admitted. That would create difficulties in cutting back the bloated staffing of government departments, the official said. One feature of the civil service system would be the introduction of a grading system. The premier would hold the first grade.