Deng Resigns His Last Formal Post : China: The country’s senior leader is likely to remain the major voice in the party even though he has passed the position on to his chosen successor.

Deng Xiaoping, China’s senior leader, passed his last formal leadership post to his chosen successor today, and the Communist Party laid out an austere economic plan for the next two years.

Deng, 85, resigned as chairman of the party’s powerful Central Military Commission in favor of party chief Jiang Zemin. He still heads the State Military Commission, a virtual mirror of the party group, but said in a letter released today that he will also leave that job.

The move solidifies Jiang’s position and appears at least to suspend a reported power struggle between him and President Yang Shangkun. Jiang, 63, had not held a national post until his elevation to party leader after the pro-democracy movement was crushed in June.

Foreign diplomats and Chinese sources agree Deng is likely to remain the leading voice in party and government affairs, as he has been since leaving the Politburo and Central Committee in 1987.

Yang, an 82-year-old former general with strong army connections, was named vice chairman of the Central Military Commission, which sets military policy. He is reported to have sought the chairmanship to consolidate his power base.

In another concession to Yang, a mastermind of the June military crackdown, his younger brother Yang Baibing, an army political commissar, was appointed secretary-general of the commission.

Although Deng described Jiang, a former Shanghai party boss with a weak power base in Beijing, as the “nucleus” of the new leadership, many feel the party leader’s political fortunes are tied to Deng’s physical health.

The official New China News Agency quoted Deng’s resignation letter, dated Wednesday, as saying: “As early as 1980, I proposed reforming the leadership system of the party and state and abolishing the lifelong tenure of leading posts.

“I have insisted on not taking up day-to-day affairs and have been looking forward to completing the succession of the older generation by the younger generation as soon as possible and realizing my aspiration of completely retiring from the leading posts.”

The Central Committee praised Deng as the “chief architect in all aspects of the party’s and army’s works.”

It said economic reforms Deng began a decade ago will continue, but for at least two years the people must “lead a thrifty life” to fight inflation of nearly 20% annually, too-rapid growth and corruption.