U.S. Prepares Steps to Improve Ties With China : Diplomacy: Senior officials may go to Beijing. Economic curbs may be eased, military contacts restored.

WASHINGTON —  The Clinton Administration is preparing a series of new steps aimed at improving its rapidly deteriorating relations with China, including an eventual restoration of long-frozen U.S. contacts with the People’s Liberation Army.

As part of its fence-mending campaign, government sources said, the Administration is ready to send some senior officials to China, including Treasury Secretary Lloyd Bentsen, who would revive a bilateral Joint Economic Commission with China that has been suspended since the Tian An Men Square crackdown of 1989.

In addition, sources close to the policy-making process said, U.S. officials are considering some action by President Clinton to ease, or even waive entirely, the economic sanctions that the Administration imposed on Beijing in August. These sanctions bar U.S. firms from selling certain high-technology equipment to China.

The Administration’s broad new initiative was launched quietly last Saturday, when White House National Security Adviser Anthony Lake and Li Daoyu, the Chinese ambassador to the United States, met at the White House.

The Administration’s efforts are designed to try to reverse what some officials fear is a steady downward spiral in relations with China--and to avoid further drift toward an overtly hostile relationship in which Washington and Beijing view one another as long-term enemies, as they did in the 1950s and early 1960s.

Lurking behind the current disputes is the growing realization, by both U.S. and Chinese officials, that differences over human rights in particular may make it harder than ever for China to obtain a renewal of most-favored-nation trade benefits when they expire next summer.

These benefits, which permit China to export its goods to the United States under the same low tariffs enjoyed by most other nations, are the linchpin of all economic ties between the two countries.

Last spring, the Clinton Administration granted China a one-year extension of the benefits but said that further extensions after June, 1994, would be granted only if the Beijing government improves the human rights climate in China.

Military ties were broken off by the George Bush Administration the day after the Beijing crackdown.

Over the last two months, the United States and China have found themselves repeatedly at odds on a broad range of issues involving arms control, as well as human rights.

The Clinton Administration has been especially upset by China’s preparations, reported by U.S. intelligence agencies, to carry out an underground nuclear test.

U.S. officials also have been irritated by China’s continuing efforts to sell what Washington views as dangerous weapons technology in the Middle East. The Administration imposed the economic sanctions in August after U.S. intelligence agencies concluded that China had sold components of M-11 missiles to Pakistan after pledging to abide by an accord limiting the spread of missile technology.

For its part, Beijing was infuriated by a recent incident in which American planes and warships tracked a Chinese ship, the Yinhe. U.S. intelligence reported that the ship was carrying chemical ingredients for poison gases to Iran. After weeks of Chinese protests, the ship was inspected at a Saudi port, and none of the dangerous chemicals were found aboard.

In an address to the U.N. General Assembly on Tuesday, Chinese Foreign Minister Qian Qichen denounced the United States as a “self-styled world cop” for its conduct toward the Chinese ship. Qian is scheduled to meet with Secretary of State Warren Christopher today in what U.S. officials hope will be another step toward improving relations with China.

Some former U.S. officials who supported the Bush Administration’s more conciliatory policies toward Beijing are said to be pressing for Christopher to visit China, but sources said no such trip is planned soon. Clinton is expected to meet Chinese President Jiang Zemin in Seattle in November, however.

In the mid-1980s, when the United States and China were seeking to offset the military power of the Soviet Union, top American military leaders regularly visited Beijing, and their Chinese counterparts came to Washington for what Gen. John W. Vessey, then chairman of the Joint Chiefs of Staff, called “soldier-to-soldier” conversations.

The idea of restoring these military links has been endorsed by some prominent liberal Democrats, such as Rep. Patricia Schroeder (D-Colo.) of the House Armed Services Committee. This time, the aim would be not so much to work together as to ease tensions between the United States and China.

“We’d like to know what their intentions are, which way their guns are pointed, whether they have their own agenda,” Schroeder said of China’s military leaders earlier this year. “These are things we don’t pick up through satellites.”

In August, during a trip to Beijing, Undersecretary of State Lynn Davis reportedly proposed the restoration of military ties. But Chinese leaders insisted that the Clinton Administration should first lift the recently imposed economic sanctions.