US, China work to clear diplomatic air. Diplomats' ouster comes on top of trade, arms, human rights disputes

Peking and Washington have played down the ouster of two Chinese diplomats from the United States in an effort to prevent unprecedented tension from disrupting ties. The envoys' expulsion for activities ``incompatible with their diplomatic status,'' or spying, climaxed a year in which discord between the two nations reached a level unmatched since ties were established in 1979.

However, top Chinese and US diplomats have pledged to prevent continued wrangles over human rights, textile trade, and arms sales to third powers from damaging a relationship of strategic and commercial value.

Chinese Foreign Ministry spokesman Ma Yuzhen yesterday restated a Chinese protest of the ouster, calling it a ``frame-up.'' But he also said, ``I would like to stress that we are opposed to any action that may poison the atmosphere between China and the United States....''

US officials have handled the incident just as gingerly. The State Department did not announce the expulsions until a week after it asked for the diplomats' recall on Dec. 22 and declined to elaborate on the case.

``It's no secret we ran into a difficult period in the last couple of months,'' said a leading US Embassy official, who asked not to be identified. ``But the basic relationship is in sound shape.''

US-Chinese trade was expected to total a record $8 billion in 1987, with US direct investment in China reaching $2.7 billion. Both nations have gained significant strategic advantages from improved ties.

There are no signs the two have eliminated the causes of numerous diplomatic strains last year. Tensions continue over alleged Chinese arms shipments to Iran and congressional denunciations of China's human rights record in Tibet.

In the latest issue of the official Peking Review, Han Xu, China's US ambassador, denounced a reference to human rights in China in the foreign relations authorization bill passed last month by the US Congress as ``interference in China's internal affairs [that has] hurt the feelings of the Chinese people.''

The act urges the Reagan administration to encourage China to release political prisoners in Tibet.

The Chinese ambassador also chided Congress for urging the Asian Development Bank in a recent bill to reconsider designating Taiwan as the Republic of China. Peking bases normal Sino-US ties on the condition that Washington recognize Taiwan as part of China.

The two powers also have clashed over trade, with China resisting US restrictions on Chinese textile imports. After months of talks, China agreed last month to restrain annual growth of imports to 3 percent over each of the next four years, a sharp cut from the average 45 percent annual increase since 1980.

The US recently halted a review of technology suitable for export to China, alleging that China is shipping arms to Iran.