China flap: grist for Reagan foes

Ronald Reagan, to the delight of the Carter White House, is dipping into the turbulent waters of China policy and appears to find them too hot for comfort. Mr. Reagan's special envoy and vice-presidential running mate, George Bush, has left China with Peking's official words ringing in his ears: that Reagan has "insulted 1 billion Chinese people."

This was done, according to Chinese leaders, by Reagan's insistence that US-Taiwanese relations -- now conducted through nongovernmental institutes in Washington and Taipei -- be elevated to "official" status.

Such status was ruled out by the exchange of ambassadors between the US and mainland China, when the united States accepted the communist regime as the sole legitimate government of China and pledged to maintain only unofficial cultural, trade, and other relations with Taiwan.

Substantively, US-Taiwanese relations have fluorished since the diplomatic break, with Taipei boasting a $2.27 billion trade surplus with Americans last year.

"Buy American" missions from Taiwan scurry around the US, Trying to purchase enough American goods to somewhat redress the trade balance and deflect American ire over the flood of Taiwanese goods entering the US.

None of this disturbs Peking's leadership, which -- very unofficially -- sanctions a growing volume of trade between China itself and its offshore "province," Taiwan.

What does upset Chinese leaders is any suggestion by Reagan that, as president, he might undercut the agreed-upon basis on which Peking and Washington have knit their ties.

Like a stone cast into a pool, the Reagan-Taiwan issue is rippling out to wider ramifications:

* It drives a policy wedge between Reagan and Mr. Bush, who -- as chief American representative in Peking during the mid-1970s -- helped to pave the way for US-Chinese recognition.

Critical of Reagan's tax-cut policies until he was named vice-presidential running mate, Bush now has a foreign policy bone to pick with his chief.

Bush says he wants to minimize differences between him and Reagan. How far he can go without eroding the credibility of the Republican twosome is doubtful.

* The diplomatic hassle gives President Carter and his aides an opportunity to buttress their claim that Reagan is inexperienced and simplistic in foreign affairs.

Carter aides long have claimed that once Reagan began talking about, or was pinned down on, specific issues, he would make mistakes.

Observers agree that Reagan's chief foreign policy adviser, Richard V. Allen, is sophisticated in his understanding of the world and aware of booby traps studding the policy landscape.

One senior West German diplomat said privately that Mr. Allen had favorably impressed German officials during a recent visit to Bonn.

The question is: Will Reagan's advisers be able to change the candidate's old and familiar language, or will the former California governor stick to his script, despite problems this may bring?

Meanwhile, a central dilemma unfolds in Reagan rhetoric. He stresses the need for stronger US military forces, which would require greatly increased defense spending, plus other expensive programs, such as a rebuilt merchant marine.

This would impel higher overall government spending, unless a Reagan administration was ready -- and able -- to push through Congress corresponding cuts in nondefense programs.

The Republican standard bearer also calls for huge tax cuts, which -- according to Carter administration economists -- would deplete US Treasury receipts.

Defense spending and tax cuts of this magnitude, Carter claims, would force the dismantling of all of the rest of the federal government, including social programs.

The 1980 presidential campaign, meanwhile, features a unique juxtaposition -- three "born again" Christian candidates (Carter, Reagan, and John Anderson) and the newly emergent political voice of the Christian fundamentalists, thundering for a return of the US to a sounder moral base.

Although the movement, as such, is not organized to endorse a particular candidate, the views of its evangelistic spokesmen often coincide with the conservative policies of Mr. Reagan.

Indeed, speaking to such a group in Dallas, Reagan told the assembled faithful: "Though you cannot endorse me, I endorse you."