WHEN is a heart ailment a cold? When the propaganda machinery says so. When Li Peng first complained about chest discomfort on April 24, the media functionaries and official spokesmen knew by reflex what they would tell the world should the premier fail to get well soon: a cold or influenza. The same formula has worked for leaders including Deng Xiaoping and Yang Shangkun. And for obvious reasons. Deng is already retired, and even though his long spells of absence might have to do with prostate cancer rather than a cold, everything is forgotten so long as, after two to three months, he gets enough energy from his qigong gurus to make a public appearance. The trompe l'oeil works even better with Yang. As Deng and Yang's other foes know very well, the former president has a knack for recovering from no matter what disease after a couple of days. When Li, who, at 65, is a boy by Chinese standards, failed to show up for more than three weeks, however, the spokesman of the Foreign Ministry, Wu Jianmin, knew the ''cold'' theory had become hogwash. Refusing to back track, he resorted to tough talk. When asked by foreign reporters why the Chinese Government did not publicise daily health bulletins about its sick leaders, Wu said: ''Different countries do things differently. There is no need to go out of one's way for uniformity. Just stop making speculations.'' Wu is, of course, recycling this familiar argument: do not impose ''Western ideas'' on a country that is pursuing ''socialism with Chinese characteristics''. Going by this logic, it seems characteristic of the Chinese not to want to know something so basic as what has contributed to the 25-day hospitalisation of their head of Government. Beijing's handling of the Li affair marks a disturbing retrogression of its policy towards information and the media. Commissars like Wu might recall that at its 13th Congress 51/2 years ago, the Chinese Communist Party (CCP) committed itself to ''letting people know important affairs of state''. China's media reforms were frozen the first two years after the June 4, 1989 killings. Since Deng kicked off his radical reforms in the spring of 1992, however, there have been some movements. By late last year, moderate cadres within the Propaganda Department and the Press and Publications Administration (PPA) were urging papers, radio and TV stations in the regions to treat their operations as enterprises - and news as commodities. So long as the editors refrain from party politics, they can print or show material that entices readers and audiences - and advertisers - in the process wiping out state subsidies. More important, media supervision was seen as a prerequisite to the success of the market economy. As leading legal journalist Wang Furu put it: ''Media and public-opinion supervision'' was essential to exposing the corruption and the illicit wheeling and dealing that come with an inchoate market. Whether motivated by profit or justice, a new breed of journalists and publishing moguls have exploited loopholes to get around the state monopoly of the media - and strict controls over the issue of new licences. For example, news entrepreneurs ''rent'' titles from the owners of the 4,000-odd newspapers and magazines that are registered. In ''cowboy'' cities along the coast and in Hainan island, de facto private papers and magazines have hit the streets. Even strait-laced party mouthpieces run thick ''weekend supplements'' that offer racy fare on business and entertainment. Stories that do particularly well include Hongkong singers and movie stars; how billion-yuan deals are being struck; how to go abroad; and untold nuggets from the lives of Mao Zedong, Zhou Enlai, and Deng Xiaoping. The crackdown came last March, after party chief Jiang Zemin had read samples of the several hundreds of newspapers, tabloids and magazines flooding Beijing's getihu (private household) news-stands. Jiang and other conservative leaders fear that the information explosion would soon undermine the party's monopoly of power. It is true that even the quasi-private magazines and tabloids have desisted from Hongkong-style reporting on Chinese politics. One thing, however, leads to another. Given the right spin, an apparently innocuous story about Mao's or Deng's exploits during the Cultural Revolution could challenge the party orthodoxy. And several avant-garde papers have given graphic accounts of embarrassing political events. Examples include how officially designated candidates were booted out during provincial elections in Guizhou and Zhejiang early this year; and how well-connected cadres have won legal cases as well as business deals thanks to their political clout. Last weekend, the PPA revoked the permit of Light Industry Herald of Jiangsu Province, which was accused of renting its licence to an unscrupulous publisher. Thirteen other newspapers, including the well-known Farmers Daily and China Sports Paper were given warnings for putting out risque ''weekend editions''. PPA cadre Liang Heng said: ''We must clarify who should run newspapers. There are trends indicating that the regulation that [only] the party can run papers are being breached''. With the CCP having consolidated its grip over organs as disparate as the army, the Government, and the legislature, Liang's statement about the party monopoly of the press comes as no surprise. With newsmen under the commissars' thumb, the media could, as they did last week, prolong the fiction about Li Peng's cold by churning out stories about congratulatory telegrams the convalescent had sent to myriad state functions. Last Saturday, the New China News Agency (NCNA) went so far as to indicate that Li, who could not make the welcoming ceremony for Jim Bolger, would meet the New Zealand premier during his Beijing stay. NCNA later corrected itself to say Li would meet thedignitary ''in the future''. And how about the NCNA dispatch last Wednesday on Li having chaired a work meeting on science and technology ''before'' a national conference on the same subject was held in Beijing, which the premier again missed. Citing a most unusual use of the preposition before, insiders said: Li did chair the work meeting prior to his sickness, but that was a long, long time before the national conference . was held.