PRESIDENT Jiang Zemin has probably been watching events in North Korea more closely than most over the last month. While there are obvious differences in the political situations of China and North Korea, there are nonetheless sufficient parallels for President Jiang to take more than a passing interest in how North Korea is coping with the death of the Great Leader, Kim Il-sung. In particular, Jiang will be anxious to see how well President Kim's designated successor, Kim Jong-il, consolidates his power and establishes himself as the new Great Leader. After all, it might not be too long before Jiang, as designated successor to the Patriarch, Deng Xiaoping, finds himself in the same position. Jiang Zemin and Kim Jong-il have a lot in common. Both are heirs to a revolutionary dynasty but have no military experience or revolutionary credentials to speak of and both are beset by factions looking to undermine their position. Both men have set about trying to bolster their position by cultivating ties with the military, an essential prerequisite to gaining and maintaining power in both China and North Korea, and by using the official media to present themselves as the natural heir and successor to their great patrons. While Jiang, in his capacity as chairman of the Central Military Commission, has appointed new generals and shuffled the top positions in China's military regions to prevent the build-up of local power bases, Kim has taken a more circuitous route and devoted himself to ingratiating himself with the old revolutionary leaders who fought alongside his father in the civil war. All the signs are that Kim Jong-il will eventually secure his position as the new Great Leader. This might appear to be good news for President Jiang but the ''core of the third generation of Chinese leaders'' still has a lot of work to do if he is to emulate Kim's initial success. Although President Jiang has seven years' experience as a member of the Communist Party's ruling politburo, he is still treated with a certain degree of suspicion by China's old revolutionary leaders and cannot be completely sure the political and military appointments he has made will remain loyal in a time of crisis. It is unlikely, for example, that octogenarian leaders such as Bo Yibo or Chen Yun would instruct their powerful princeling children to pledge allegiance to Jiang in any power struggling ensuing from the death of Deng Xiaoping. There have also been reports that Deng himself is unhappy with the performance of his hand-picked successor and may be willing to dump him should a more credible candidate come to the fore. So far, however, no obvious challenger has appeared and there is little evidence there is anyone with enough power and influence to mount an effective challenge. While many of Jiang's colleagues in the highest echelons of power might be considered more qualified for the post of supreme leader, there is no one individual with sufficient revolutionary kudos and political elan to take control of the party and government. Just about the only person in the politburo standing committee who could unseat Jiang is the chairman of the National People's Congress, Qiao Shi. Qiao, 70, is the only third generation leader who can claim to have any real revolutionary experience, having joined the Shanghai underground in the 30s. He is also believed to have the backing of party elders such as Chen Yun and former NPC chairman, Peng Zhen. Qiao also has the added advantage of having headed China's intelligence apparatus and has links to the military through the People's Armed Police. Until recently, it was assumed Qiao was happy to stay in the background and use his influence as a king maker rather than seek outright power for himself, but with his appointment as head of the NPC two years ago, he has adopted a much higher profile and has taken on new areas of responsibility in the administration. Last month, for example, Mr Qiao took the unprecedented step of summoning the leaders of Beijing's major newspapers and issuing instructions on how to report such sensitive matters as natural disasters, corruption and labour unrest. Mr Qiao's higher profile has been interpreted by some analysts as a sign the secret police chief is manoeuvring himself into a position where he could make a bid for the party leadership, but Mr Qiao is by nature a cautious politician who is unlikely to make any rash moves which could endanger his current position. With no obvious threat to President Jiang inside the current collective leadership at the moment, many political observers are looking to the fringes of power to find a possible challenger. The two most widely talked about candidates are former President Yang Shangkun and former Party General Secretary Zhao Ziyang, both purged by Deng for varying degrees of disloyalty. A sprightly 86-year-old, Yang has remained largely out of public view for the last few years but still maintains much of his old influence in the party and in particular the military. But although Yang can never be ruled out of the post-Deng equation, he is generally considered to be too old to make an outright bid for lasting power. Similarly, Zhao, who has been in the political wilderness for over five years since his ousting in June 1989, will be 75 this year and is believed to be in fairly poor health. Zhao has been described by some analysts as a ''defiant dark horse'' waiting in the wings for a chance to resume power, but others think of the former leader as more of an ''old grey horse,'' quite content to live out his life in quiet retirement. ''China has changed more in the last five years than it did in the 10 years Zhao was in charge. The economic and financial system is very different now and I do not think Zhao would be capable of handling the job,'' said a western diplomat in Beijing. ''People like Zhu Rongji, Li Peng and Li Lanqing are in a much better position to run the country than someone who has been under virtual house arrest for five years.'' The most likely scenario should Deng die tomorrow is that the collective leadership established at the 14th Party Congress in October 1992 will remain in place for at least another year and possibly right up to the 15th Party Congress in 1997. There is unlikely to be any rapid or dramatic changes in the leadership as this would not be conducive to stability. Rather there are expected to be more subtle movements in the power structure whereby some members of the collective leadership are gradually sidelined and others assume control. This process of realignment will almost certainly be accompanied by an increased devolution of power to the provinces as the economy moves towards a far more market-orientated system which would make Beijing's old-style command economics obsolete. However such devolution will not necessarily lead to the kind of regional warlordism that many doom merchants have predicted. There has been a tremendous resurgence of Chinese nationalism over the last three years and this is likely to provide a very strong glue with which to keep the country together. Moreover, powerful regional leaders, such as Guangdong Governor Zhu Senlin and Shanghai Party boss Wu Bangguo, are likely to be further co-opted into the central leadership so as to ensure some measure of control can still be exerted from Beijing. Gazing into the crystal ball, there are unlikely to be any complete unknowns in the post-Deng leadership although there is certainly no guarantee that all of those currently in power will still be there in two or three years' time. Mr Jiang, in particular, is unlikely to survive the realignment. By the time the 15th Congress comes around, we will probably still see many of the old faces but in different positions. Qiao Shi must be the favourite to take over as head of the Communist Party, Zhu Rongji is likely to succeed Li Peng as prime minister and rising star Chi Haotian is the most obvious candidate for Jiang's job as head of the Central Military Commission. Jiang might retain his largely ceremonial post as state president but should Zhao Ziyang be brought back to the fold, the presidency would be a very convenient place to slot him in.