CHINESE President Jiang Zemin has been gaining power and hogging the limelight as the position of Prime Minister Li Peng, his main competitor, has continued to weaken. Chinese and diplomatic sources have confirmed it is unlikely Mr Li will be able to take up his full responsibilities in the coming months. Political observers in Beijing said Mr Jiang's exposure could be compared with that of his mentor, patriarch Deng Xiaoping, at the height of his powers. His photograph appeared twice in the People's Daily yesterday - military-looking in one, wearing a tunic with Mao collar and surrounded by newly-promoted generals in the People's Liberation Army (PLA), and smiling in a business suit in the other, alongside visiting Croatian President Franjo Tudjman. The newspaper said Mr Jiang, 67, who is also Communist Party Secretary-General, reiterated party leadership over the PLA. Last week, Mr Jiang, who was making his first major speech since becoming President, called for speeded up reforms and a struggle against inflation and corruption, two key issues behind the popular discontent of 1989. ''His speeches, in which he sticks closely to the Deng line, allow him to show that he is in control of the state in Li Peng's absence,'' a diplomatic source said. Chinese sources said Mr Jiang had benefited from the absence of Mr Li, who out-ranked the former Shanghai mayor. The sources said Mr Li, who suffered a heart attack in April, had also had a minor stroke. They said Mr Li would have to significantly reduce his workload, even after a full recovery. The sources added the condition of Mr Li had become stable although he was still in a military hospital in the suburb of the Chinese capital. The Prime Minister is scheduled to play host during the visit of Malaysian Prime Minister Datuk Seri Dr Mahathir Mohamad, who arrives in Beijing on Sunday. A Malaysian Embassy official yesterday said the Government had indicated ''nothing to the contrary'' on Mr Li's appearance. Other sources in Beijing said Mr Li had resumed some of his work and was participating in meetings at which the Government was deciding how to cool down the economy. The sources said Mr Li had been ''weighing in'' at an important series of meetings being held by government leaders since last week at a state guesthouse in the western suburbs of Beijing. The meetings were to determine how China would put the brakes on an economy overheated by market reforms and break-neck growth. A mainland analyst said it was unlikely Mr Deng would tamper with the so-called ''Jiang-Li leadership axis'' in the short term, adding it was difficult to find a successor for the premier. He said Executive Vice-Premier Zhu Rongji had yet to win full support within the party and among the regions to take over as head of government. ''The regions might be happy to see a weak central government under Mr Li instead of a strong leadership under Mr Zhu. This will allow them greater power vis-a-vis the central government,'' he said.