A chill wind blew from the Great Hall of the People last week as China's leaders cooled capitalist-style economic initiatives and increased reliance on government central planning.

The new policy was a bitter defeat for senior leader Deng Xiaoping, who led the campaign to open the nation's doors to the West after Mao Tse-tung's death in 1977.But it was a triumph for Communist Party conservatives, eager to preserve the principles of socialism and regain control over a runaway economy with increasingly Western features.

The second plenary of the 7th National People's Congress is almost certain to be recorded as another turning point in China's history, which since 1949 has been studded with great leaps forward followed by large steps back into austerity and retrenchment.

The 3,000 delegates to the congress were told to support a moratorium on the free-market practices begun a decade ago. Deng himself said it could take "two, three, even four years" for China to overcome the setbacks caused by what he called "minor mistakes."

In this way, the party hierarchy hoped to cool down not only an overheated economy but also the entrepreneurial zest and inflation-fueled burst of consumerism among the 1.1 billion Chinese. A resigned Deng urged them to go back "to hard work and plain living."

Many diplomats in Beijing feel this congress could be the last for the visionary Deng, 84, who bounced back after surviving two purges under Mao.

The return to central planning will provide the party with a potent weapon that had been blunted by free-enterprise euphoria, during which regional cliques established their own economic fiefdoms and ignored Beijing's directives.

In a burst of self-criticism, a Chinese tradition after an error, Deng said his greatest mistake since becoming senior leader was "insufficient attention to moral education."

In the rush to develop the economy, Deng said, the state gave inadequate instructions to party members and citizens, a veiled reference to the mismanagement and corruption that accompanied China's economic boom.

Some veteran observers said the climate beneath the crystal chandeliers and along the vast marble halls of the Great Hall reminded them of the days when congress delegates simply rubber-stamped party policies.

Last year, delegates were encouraged to voice criticism openly and propose ideas, and Chinese journalists asked leaders embarrassing questions at press conferences. This year, some of the delegates recited poetry at committee meetings and journalists' questions had to be cleared by their editors.

The official party line - to demonstrate unity and show no sign of dissent - held firm. Party officials, ranked on the neon-lit dais according to their importance, listened impassively to policy speeches and delegates applauded puppetlike at key points.

Political analysts described the congress as a well-orchestrated performance, the main purpose of which was to heal, at least for public consumption, the rift between hard-liners and reformists through a unanimously accepted new policy.

Communist Party General Secretary Zhao Zhiyang, in his introduction of Prime Minister Li Peng, made a veiled reference to the strategy when he inquired: "So today you are going to play the role of the Red Maid?" That famous character in Chinese literature acts as a matchmaker between a wealthy aristocrat and a poor commoner.

Li Peng promptly promised: "We won't return to the old economic model marked by overcentralized, excessive and rigid control. But China will not adopt private ownership nor will it forsake the socialist system."

With the economy galloping along at a 20 percent growth rate, state economists say it has outrun supplies of raw materials. This in turn triggered price hikes and inflation that officials feared could spill over into social unrest.