China gives US no sign it will halt missile sales to Gulf states. But on Cambodia issue, Peking shows more give

The United States has warned China that ballistic missiles Peking may be seeking to export to the Mideast have a ``destabilizing potential.'' Amid unconfirmed reports that Peking is attempting to export to that region the M-9, a medium-range rocket now under development, US Secretary of State George Shultz held lengthy discussions with China's leaders last week on the need to control the spread of the missile technology.

At a press conference Friday, Mr. Shultz said Chinese officials denied exporting ballistic missiles, except to Saudi Arabia, which purchased medium-range CSS-2 rockets from Peking in a secret deal disclosed this spring.

However, during their talks the Chinese left open the possibility of future ballistic missile sales. Shultz said that after discussing the problem ``at some length,'' he failed to reach an accord with Peking on preventing such weapons exports. ``We didn't come to any agreements about it, but I think it has been worthwhile to talk about it. And I'm sure that subject will continue to be an important one on our agenda,'' Shultz said.

Shultz repeated the US stand that there is a need for an international arms embargo against Iran and Iraq, but said Peking continues to reject the idea.

The US last October suspended a policy review aimed at relaxing controls on high- technology exports to China in retaliation for Peking's sale of Silkworm surface-to-surface missiles to Iran. Washington resumed the review this spring only after China pledged to prevent Silkworms from reaching Iran via the international arms market.

Despite evident tensions over the missile issue, Shultz said he had ``very fruitful'' talks with Chinese leaders on another topic of strategic concern: Ending the 10-year war in Cambodia.

In a potentially significant development, Shultz appeared to confirm recent indications that China is reconsidering its longstanding support for the most powerful and radical Cambodian resistance faction, the Khmer Rouge.

This would bring China, the main supplier of arms to the tripartite Cambodian faction including the Khmer Rouge, more into line with the US and the six-member Southeast Asian Association.

Led by Pol Pot, Khmer Rouge guerrillas terrorized Cambodia from 1975 until late 1978, causing the deaths of an estimated one million people before Vietnam invaded the country and installed a pro-Hanoi government in the capital, Phnom Penh. Vietnam has pledged to withdraw its estimated 100,000 to 140,000 troops from Cambodia by 1990. As this vow has gained international credibility, concerns have arisen over the ambitions of the dreaded communist Khmer Rouge.

Shultz, who is visiting Asia and the Pacific, said that the US and China both favor a government organized around Prince Norodom Sihanouk, a former Cambodian monarch, who is in exile.