by Lorien Holland

BEIJING, Feb 26 (AFP) - China surfaced into the post-Deng Xiaoping world Wednesday to be hit by serious Moslem unrest on its western frontier and international concern over its future stability.

Pro-independence terrorists shattered any semblance of mourning in the northwest region of Xinjiang by detonating a bomb on a public bus in the regional capital Urumqi that killed at least three and sprinkled fear through the population.

In Beijing, China's leadership was faced with the choice of standing firmly behind Deng's annointed heir, President Jiang Zemin, or backing an alternative candidate.

"Jiang is being buffered by both wings of the party," said a secret CIA report published in the Washington Times after Deng's death.

"His inability to consolidate power means he will remain focused on domestic issues and is unlikely to initiate any steps to improve relations with the US or Taiwan that could spark internal criticism," the report said.

The bomb in Urumqi late Tuesday came after a massive government crackdown on the Moslem border town of Yining where anti-Chinese riots left at least 10 dead.

According to exiled separatists in Kazakhstan, their "freedom fighters" have stepped up efforts to wrench Xinjiang from Chinese control.

More than 2,000 ethnic Chinese have been forced to flee from their homes in Yining, escorted back to Urumqi in a convoy of 120 trucks and buses, the exiles said.

The heady unrest comes after a series of strong earthquakes, which superstitious Xinjiang residents linked to Deng's death and an imminent political change which could return them to the state of East Turkestan which emerged in the forties only to be crushed when the Communists came to power.

Deng, who died on February 19 aged 92, is widely credited with leading China into the modern world, and keeping its territorial unity by ensuring the return of Hong Kong on July 1 and condoning often repressive policies in Xinjiang and neighbouring Tibet.

While ethnic Chinese give credence to the idea of physical disasters portending the end of a dynasty, it is not the Communist Party in Beijing which is under threat but the makeup of its leadership.

The US credit rating agency Standard and Poor and the US investment bank Salomon Brothers concluded in post-Deng reports that Jiang would be vulnerable in the mid-term, but the entire leadership was committed to stability.

"Although it is widely believed that the current administration will keep a firm hold on power, the upcoming reguar National People's Congress which begins on March 1 is likely to discuss a number of senior personnel reshuffles," said US investment bank Salomon Brothers in its China forecast.

"Perceived political risk is likely to rise in the next few months as the death of Deng may add uncertainty," its report said.

China's economy, despite undergoing sharp growth, is faced with growing unemployment as the crumbling state sector is dismantled and the wealth gap between east and west widens.

On the international front, Taiwan, the Chinese island that refuses to be drawn back to the motherland, remains at the top of the list, along with the United States, which continues to support Taiwan with weapons sales but recognises Beijing.

"Deng's death should provoke a variety of changes in China," said Japan's Economic Planning Agency director, Taro Aso, who spoke in his personal capacity.

"A year from now, I'm not sure how many newspapers will be able to write that the current open-door policy is being maintained," he said.