Pressuring China first on free trade

UNITED States policymakers should drop the human rights conditions for China's most-favored-nation status and instead link MFN approval to the country's compliance with international trade rules.

This is the view of China scholar Nicholas Lardy, who explains the suggested change of tactics in a new study for the Institute of International Economics entitled ``China and the World Economy.'' Mr. Lardy says this revised approach would not only spur US exports to the world's fastest growing economy but also serve America's democracy and human rights goals. The history of other East Asian nations, he says, suggests liberalizing the economy encourages political pluralism and eventually democracy.

Lardy outlines three key steps the US should take:

* Support China's bid to enter the General Agreement on Tariffs and Trade by the end of 1994 and award permanent MFN status once it has met all the trade liberalization requirements.

* Increase government credits for American exports to China to the same level as Japan and European countries, so US companies can compete on the same basis as foreign counterparts.

* Multilateralize US controls on exports to China to capture billions of dollars of sales.