China stalks foreign partners and cash. But Chinese zest for joint ventures is not yet matched by business sense

The wish lists for foreign investment partners have been pouring in from all over China. The city of Dalian wants to renovate its peanut-butter factory. Zhanjiang is looking for a foreign partner to buy a deep-sea fishing fleet. Nantong hopes to build an optical-fiber plant.

Enterprises in Shanghai want to make more bathtubs and vacuum cleaners; in Qingdao more baby carriages and chocolate; on Hainan Island more rubber boots and canned pineapple.

Provinces and cities throughout the country have identified thousands of industries they would like to modernize and expand with the help of foreign capital and technology. The provinces of Hubei, Shaanxi, Ningxia, Guangdong, Zhejiang, Liaoning, and others have submitted project lists to potential foreign investors. The lists cover a wide range of light industry, including food processing and the manufacture of popular consumer goods such as television sets and refrigerators, and industrial products.

These items were among some 400 projects proposed at an investment conference in Hong Kong last month for China's 14 coastal cities and special economic zones that have been set up to absorb foreign investment.

At two other investment conferences in Shanghai and Dalian last month, several thousand projects were hawked by Chinese officials and factory managers to top Western and Japanese businessmen.

Whatever interest foreign investors may have in China, the enthusiasm of local Chinese officials and entrepreneurs for foreign business partners has been aroused by government policies that have decentralized economic decisionmaking and liberalized investment rules. To some observers, the scene is chaotic.

''Everybody is trying to do the same thing - all cities and localities want foreign investment and joint ventures,'' says one United States business representative with several years of investment experience in China.

He notes that the criterion applied to foreign investment several years ago - that it bring with it some badly needed advanced technology - no longer seems so important. The Chinese now see that, if the foreign firm is a worthy partner, it will provide its best technology with the capital. Now they are mainly after investment dollars, he says.

The burst of investment proposals for light industries reflects pent up consumer demand, says a top foreign investment banker in Peking, who asked not to be named.

''There is no way domestic industries can meet the demand for consumer products,'' he says.

In the past year, many more consumer goods have been brought in from outside China, often circumventing customs and in violation of the law, he notes. Enterprises are now giving high priority to meeting local demand for such goods and to make higher-quality consumer goods.

''Eighteen months ago you couldn't buy a refrigerator here,'' he says. There were very few on the market and there was little demand. Now they are in high demand, are overpriced, and sell out almost as soon as they arrive in the store.

The possibilities for foreign investment in light industry were increased earlier this year when the 14 coastal cities were authorized to offer preferential treatment to investors.

''The general idea is to let the 14 cities develop quickly,'' says Huang Wenjun, spokesman for the Ministry of Foreign Economic Relations and Trade.

''By importing modern equipment for the product lines for small and medium-sized industries, they can quickly increase their efficiency and their output and offer a quick return on investment,'' he says.

Other cities and provinces have developed packages of investment incentives. But the enthusiasm such policies have stirred up among local entrepreneurs is not backed by good business sense, says the Peking-based investment banker.

A further difficulty is that provinces and cities compete among themselves for investment capital. And there is often redundancy in their proposals.

''Investment in such projects may take a long time,'' the investment banker says.

''Detailed information is slow in coming, and investors have to go to the local area for a look. The project proposals themselves often reflect a lack of experience. Local managers may know what they want, but they aren't familiar with good business practices,'' he notes.

''A lot of these projects will fall by the wayside,'' says another investment banker.

Even so, the reported recent relaxation of rules for domestic sales by joint ventures between foreign and Chinese partners appears to have stimulated foreign investors' interest in such projects. The new proposals would permit a larger proportion of goods produced by joint ventures to be sold in the domestic Chinese market. This could bring the higher level of foreign-investment activity the government has been seeking for several years.

The investment conference in Hong Kong netted almost 200 contracts and agreements worth $200 million. The Dalian and Shanghai conferences were more notable for yielding letters of intent - nonbinding agreements to hold further talks - than for producing firm contracts.

In the first half of 1984, 172 joint ventures worth $210 million were finalized. In the four years prior to that, 189 joint ventures worth $320 million were launched.