Return to Maoism will frustrate younger party leaders' march towards capitalism

FOR those who were expecting a radical reform similar to the ''shock therapy'' attempted in Poland and the former Soviet Union, the decision made by the Chinese Communist Party's Third Plenum will be a big disappointment.

There is no mention of privatisation of the state sector. No special role in China's economic reform accorded to foreign investment. And no abolition of remaining intervention of the government in economic management.

Instead the Plenum once again upheld the supremacy of ''the basic system of socialism'', and emphasised ''the principle of taking the state owned sector as the mainstay'' and that of ''to each according to his work'' (not according to his capital).

Moreover, the strengthening of government intervention through macro-economic controls and an increase in the central government's fiscal revenues - vis-a-vis those of local governments and of the nation's GDP as a whole - were taken as part of the reform, and are probably more important than the others.

Even the corporatisation of state-owned firms is not intended as an illicit way of privatisation through the back door.

On the contrary, the Plenum believed that ''in key enterprises in backbone and basic industries, the state should have controlling shares and at the same time bring in non-state capital, so as to expand the leading role and scope of influence of the state sector of the economy''.