Shanghai stocks hit by fears for health of Deng

THE Chinese paramount leader, Mr Deng Xiaoping, who is at the centre of swirling rumours over the state of his health, sent a…

THE Chinese paramount leader, Mr Deng Xiaoping, who is at the centre of swirling rumours over the state of his health, sent a condolence message to the family of a former defence minister who died this month, Chinese television said yesterday.

The news report did not say when Mr Deng (92) sent the message to the family of Qin Qiwei, who died on February 2nd. It just read a long list of "personalities" who had sent a message to Qin's family "in the final phase of his illness or after his death".

Mr Deng's name was mentioned on the condolence list just after that of President Jiang Zemin and ahead of the Prime Minister, Mr Li Peng.

Qin (82), who still held the post of vice president of the National People's Congress, was cremated yesterday. The television showed pictures of China's senior leaders, except Mr Deng, at the funeral.

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China yesterday played down fears over Mr Deng's health. The fears had been fuelled after President Zemin cut short an out-of-town trip to visit the ailing patriarch.

One indication of Mr Deng's worsening state was that officials and family members have been reluctant to confirm that he would travel to Hong Kong to witness Beijing's resumption of rule over the British colony at midnight on June 30th.

Mr Deng, whose pragmatic policies transformed a backward Stalinist state into an economic powerhouse, lives in a tightly guarded central Beijing compound close to the Forbidden City, home for centuries to China's emperors.

A Hong Kong newspaper reported at the weekend that he was rushed to hospital last Thursday after a massive stroke that followed an earlier mild stroke.

Worries over Mr Deng's health helped to push shares on Shanghai and Shenzhen stock exchanges sharply lower by their close yesterday and also rocked share prices in Taiwan and Hong Kong.

Meanwhile in Beijing yesterday, the most senior leader to flee North Korea spent his seventh day at the centre of a diplomatic crisis despite an apparent softening in Pyongyang's stance on his defection.

South Korean officials said talks continued with Beijing over the fate of Mr Hwang Jang-yop, a top aide to supreme North Korean leader, Mr Kim Jong-il. Mr Hwang has been stranded in Seoul's Beijing embassy since he sought refuge there last Wednesday.

The official KCNA news agency said late on Monday that North Korea would take strong action if it turned out that Mr Hwang was kidnapped, but that he would be fired if he had sought asylum.

Pyongyang officials had previously been steadfast in their accusation that Seoul abducted the scholarly architect of North Korea's governing ideology of Juche, or strict self-reliance. South Korea has dismissed the charge as preposterous.

The new tone on Mr Hwang's departure appeared to be backed by comments by Mr Kim broadcast on state radio that those who lacked the grit to defend Pyongyang's fiery brand of communism should go their own way.

"As the revolutionary song goes: `Cowards, leave if you want to. We will defend the red flag to the bitter end. We will move forward by holding the Juche banner even higher'," a political essay broadcast by state radio quoted the North Korean leader as saying.