CHINA'S leaders have learned the lessons of the recent past in deciding to act to try to rein in inflation before it runs out of control. After the sobering experience of 1988 - when austerity measures introduced to control an overheated economy sparked panic buying and ultimately led to the social unrest underlying the democracy movement of 1989 - Beijing is taking early steps aimed at preventing the same thing happening again. It is worrying that Beijing needs to act but reassuring that it is doing so. The approach has been two-pronged. On the one hand, Vice-Premier Mr Zhu Rongji has talked calmly and soothingly to Western business leaders, explaining that China can handle a certain level of inflation as easily as Hongkong and reassuring them it remains a safe place to invest. But it will remain a secure home for investment capital only if China takes action to justify his words. So the President, Mr Jiang Zemin, has been warning senior cadres about how easily the situation could deteriorate unless inflation and a runaway money supply are brought under control. Mr Jiang is keenly aware that Beijing's writ runs only lightly in the richer coastal provinces where the growth is fastest and strongest. To reinforce a message that might otherwise be taken less seriously than it deserves to be, he has invoked the name of Mr Deng Xiaoping and dispatched economic work groups to provinces and big cities to impose discipline. Since the patriarch had been thought to have stood in the way of any slowdown of the growth programme he launched in Shenzhen last year, the provincesmay take notice. The measures Mr Jiang is demanding are specifically aimed at high-risk practices rather than at a blanket curb on growth but the success of the venture depends on the willingness of provincial governments to follow his advice. Reminding them of 1988 and 1989 is therefore particularly important. While provinces such as Guangdong got off lightly last time, the large number of unemployed in southern cities searching for jobs are a potential source of serious unrest should drasticaction be needed to stop inflation, thus bringing on a recession. Getting the south to bite the bullet now, before tougher action becomes necessary, is sensible politically as well as economically. For the sake of stability in China and its continued growth, it is critical that provincial leaders remember that it takes more than luck to avoid a bust coming after a boom.