In China, Meese offers counsel. US attorney general urges modifying legal system to draw foreign business

China should let foreign lawyers practice their profession in that country and should apply Chinese laws more fairly to foreign businesses. This message from United States Attorney General Edwin Meese III was part of an effort this week by American lawyers to offer their counsel on China's legal development.

``We can already see evidence that China's legal response to new patterns of economic activity is generally in the direction of flexibility and accommodation, rather than toward rigid, stultifying centralism and overregulation,'' Mr. Meese told 1,500 Chinese and American legal experts yesterday.

The attorney general added, however, that by Western standards, ``the degree of government regulation of the economic and commerical transactions in China remains relatively high.''

The shortcomings of China's legal system have had a unfavorable effect on the investment climate, Western businessmen in Peking say.

The government has affirmed that it is working toward a legal system that meets internationally accepted standards for fairness, consistency, and predictability. Many obstacles remain, especially in the areas of human rights and criminal law, and with a judicial system controlled by the government and the Communist Party.

There has been notable progress in economic law, however, and this was the focus of the three-day seminar attended by Meese and some 600 other American legal specialists. The seminar was sponsored by People-to-People International in order to strengthen cooperation in legal affairs between China and the US, especially relating to trade and investment.

The meetings gave both sides an opportunity to air their concerns.

Chinese Minister of Justice Zhang Jinfu told the Americans Monday that the US should even further reduce the restrictions on technology transfer to China. He also urged more favorable treatment of Chinese textile exports to the US.

``An increase in Chinese textile exports to the US will not cause any competition with US-made textiles,'' Mr. Zhang said, according to the China Daily. ``The competition will only be between China's textiles and those imported from other countries.''

The two sides are now negotiating a new textile quota agreement, and Chinese sources say that so far some 40 categories of goods have been agreed upon.

Meese noted there was a severe shortage of lawyers in China, estimating about 30,000 lawyers compared with almost 700,000 in the US - which has one-fourth of China's population.

In view of China's need for legal expertise, he said he hoped it would welcome an expanded presence of US law firms in the country. Four US law firms have offices in Peking, but they are not allowed to offer services to local clients.

Meese also reiterated the Reagan administration's opposition to protectionism, an important issue for Chinese exporters, who are the largest source of imported textiles for the US.

As with every previous Cabinet member who has visited Peking in recent years, the attorney general underscored yet again the Reagan administration's promise to continue reviewing rules on export licenses ``to be sure they are only as extensive as is necessary to protect vital US interests.''

Other points discussed, according to Meese, were the need for protection of intellectual property rights, which would make it easier for American companies to offer more technologies to China. He also urged the opening of China's domestic markets to foreign goods and services.