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When Chinese leaders announced in late 1978 that China would \"open to the outside world,\" they embarked on a strategy for attracting private foreign capital to spur economic development. At the same time, they were concerned about possible negative repercussions of this policy. Margaret Pearson examines government efforts to control the terms of foreign investment between 1979 and 1988 and, more broadly, the abilities of socialist states in general to establish the terms of their own participation in the world economy. Drawing on interviews with Chinese and foreigners involved in joint ventures, Pearson focuses on the years from 1979 through 1988, but she also comments on the fate of the \"open\" policy following the economic retrenchment and political upheavals of the late 1980s. \"Since the policy of `opening' was launched in Beijing in 1979 some Chinese leaders have favoured foreign investment, while others have feared that it would carry ideas and institutions that would corrupt Chinese socialism. This study of Chinese policies toward foreign-invested enterprises (FIFs) during the 1980s broadly charts significant changes in the impact of these competing views on policy. . . . Pearson's overview and analysis provide thought-provoking perspectives. . . . Pearson furnishes excellent evidence that throughout the 1980s the pressure for reform was so great that the conservatives had to retreat repeatedly, despite their concerns about the decline of collectivist values and the Maoist dream.\"--Stanley Lubman, The China Quarterly

Queen Elizabeth II and Prince Philip will pay a state visit to China from Oct. 12 to 18...

He said the overwhelming majority of party officials were ''good, as well as loyal,'' but a few had been ''struck by the sugar-coated bullets of the bourgeoisie.''

LEAD: President Kim Il Sung waving to schoolchildren welcoming him to Beijing yesterday.

In Washington, the White House announced Mr. Li's visit in a brief statement. It said only that Mr. Li had accepted [Reagan]'s invitation and that the Chinese President would meet with Mr. Reagan at the White House on July 23. Mr. Li, whose age has been given officially as both 75 and 79, will lead a delegation including his wife, Lin Jiamei; Li Peng, Deputy Prime Minister, and Ji Pengfei, a State Councilor.

Li was one of eight veteran Communist revolutionaries who, directly and through proteges, played key roles in setting government policy. Li was the first of them to die. The others include senior leader Deng Xiaoping, 87.

[Li Xiannian] was a principal opponent in the ruling Communist party to efforts by senior leader Deng Xiaoping to push China in the direction of more openness and market reform. His death is a blow to the hardline camp.

In 1984, China and Britain agreed on the turnover of the British crown colony of Hong Kong to China when the British lease on it expires in 1997. The accord settled some historical disputes that have long marred Chinese-British ties and paved the way for the queen's visit.

President's agenda: Talks with political leaders and a visit to the world's tallest building.