US and Chinese Leaders Hold High-Stakes Summit

SAVING trade relations - and face - are on the agenda for Friday's meeting between President Clinton and Chinese President Jiang Zemin.

In the first summit since the 1989 Tiananmen Square massacre, the two nations will be trying to preserve trade ties without appearing to retreat on principles, analysts say. The Clinton-Jiang summit will take place as Pacific Rim leaders meet in Seattle for the Asia-Pacific Economic Cooperation (APEC) forum.

In the stormy arena of United States and Chinese diplomacy, limited maneuvering room makes progress difficult.

In his 1992 campaign, Mr. Clinton stumped for getting tough on a Chinese regime that oppresses its people, flouts international arms controls, and restricts access to its market but enjoys a hefty trade surplus with the US. Clinton needs to satisfy a Congress strongly opposed to going easy on China.

Yet, amid sluggish economic growth at home and controversy over broadening US trade, Clinton also is under pressure from business to retain ties with the Chinese market, the fastest growing in the world. In some recent trade deals, China has courted American business as the strongest force for stability with Washington.

Mr. Jiang is in a similar squeeze. As perhaps the only immediate successor to ailing patriarch Deng Xiaoping, Jiang is putting his prestige on the line by meeting with Clinton, Chinese analysts say.

China desperately needs the US market that consumes 40 percent of its exports. But, as the likely center of the post-Deng leadership struggle, Jiang can ill-afford to alienate any party faction, especially the military and party hard-liners who smart at recent US humiliations.

Those include discredited US charges that a Chinese ship was carrying chemical weapons to Iran, trade sanctions for alleged Chinese missile sales to Pakistan, congressional opposition to Beijing's unsuccessful Olympic bid, arms sales to Taiwan, and what China sees as hectoring over human rights. Ending human rights abuses is a major condition Clinton has set for renewing China's most-favored-nation trading privileges next year.

``Very few Chinese can understand that human rights is the cornerstone of American foreign policy. They think economic issues are the real focus, while human rights is just used for intimidation,'' says a Chinese analyst of American foreign policy. ``APEC is a pressure on Jiang, because the Chinese leaders have very little or even no room for compromise,'' he adds. ``If Jiang made some important compromise, people would say, `Things in China are in good shape. Why should we be so lowly?' ''

Still, good will for the summit is building, although major breakthroughs are unlikely, diplomats say. Recently, China suggested it might allow prison inspections by the International Committee of the Red Cross, a nod to international human rights norms enthusiastically applauded by US officials.

Urging Beijing and Washington to let bygones be bygones at this ``crucial juncture,'' the Chinese leader yesterday urged the two countries to look together ``toward the 21st century and handle Sino-US relations from a long-term perspective, to put this relationship on a normal track and to have a new start.''

For his part, Clinton has launched a conciliatory drive by sending a stream of senior officials to ``engage'' Beijing in high-level talks and avert a showdown over trade. Recently, Washington has signaled a willingness to cancel the high-technology sanctions imposed after the reported missile sales if Beijing firmly promises to stop such exports, Western diplomats say. Some Chinese analysts say such a deal is a possibility.

WASHINGTON also seeks Beijing's cooperation to end an impasse on nuclear inspections in North Korea. So far, China opposes an embargo. If Beijing could be prodded into stepping up pressure and abstaining while the United Nations imposes sanctions, Western diplomats say, the deal could be a turning point in relations between the two rivals.

Other irritants remain. Trade ties are also under severe pressure from China's refusal to provide better market access and open its services market, especially for American strongholds such as insurance and telecommunications. More than $2 billion in illegal transshipments of Chinese textiles from other countries is another sticking point.

Chinese analysts also say the US must stop its lecturing on human rights. Chinese intellectuals, even those with American sympathies, were offended by US domineering on the Olympic bid and alleged chemical weapons shipments, Western diplomats admit.

Without public badgering from the US, progress in human rights is possible, Chinese observers say. But that could only come in a private understanding between the two leaders since Jiang ``will never do anything at the meeting that would make him look like a traitor,'' a Chinese intellectual says.

Threatening to withdraw trading privileges unless its human rights record improves ``is like reprimanding a child,'' he says. ``Chinese will never take such a dressing down.''