U.S. to Loosen China Sanctions : Diplomacy: Bush is expected to clear the way for the Chinese to launch American-made satellites.

In the wake of the mission to Beijing by President Bush’s national security adviser, the Administration is preparing to grant further concessions to China soon, easing the impact of some of the sanctions imposed last June.

According to knowledgeable U.S. officials and Washington diplomats, Bush is expected to clear the way within the next two weeks for satellites made by the Hughes Aircraft Co. to be launched in China. The export of the U.S.-made satellites would be the first to any Communist country.

One U.S. official said a decision on the export of the satellites is “imminent.” An Australian diplomat said he expects the Bush Administration to approve the exports to China by the end of this week.

Last June, after the Chinese army killed hundreds, perhaps thousands, of pro-democracy demonstrators in Beijing, Bush banned the sale or export to China of goods that have possible military uses. U.S. permission for the satellite deal has been held up since then.

U.S. sources say Bush may also give U.S. approval by early next year for a resumption of some World Bank loans to China and for a continuation of loans from the U.S. Export-Import Bank to China.

The Administration hopes that the Chinese leadership will reciprocate with concessions of its own, the sources said.

Brent Scowcroft, Bush’s national security adviser, and Deputy Secretary of State Lawrence S. Eagleburger “went over (to China) in the belief that steps by both sides have to be taken in parallel,” said one U.S. official. He acknowledged that “we may not know for a few weeks” how much the Chinese leadership is willing to change its own policies in the aftermath of the American officials’ visit.

In exchange for American concessions, U.S. officials say, the two Bush Administration officials sought an end to China’s anti-American propaganda and its jamming of the Voice of America, a continuation of student exchange programs between China and the United States and renewed pledges that China will not sell its M-9 short-range missiles in the Middle East.

In addition, these sources said, Scowcroft and Eagleburger sought an easing of the political climate inside China, such as a lifting of martial law in Beijing and a settlement of the dispute between China and the United States over Fang Lizhi, China’s leading dissident. Fang remains in the American Embassy in Beijing, where he was granted refuge after the Chinese army crushed pro-democracy demonstrations last June.

One knowledgeable U.S. official said the secretive mission to Beijing was motivated by the Administration’s general desire to mend fences with China.

“You know this White House and Scowcroft and the way they think of China’s strategic importance,” he said.

He rejected allegations that the timing of the trip was prompted by U.S. concerns over Chinese missile sales in the Middle East. In recent weeks, there have been reports that China may have concluded a deal to sell M-9 missiles to Syria.

“Scowcroft didn’t go because of missiles,” said this source. “In drawing up agendas, sure, we had missiles in there. But that was not what triggered the trip. What triggered the trip was the hope that we could reverse the momentum of the relationship. And the hope was that Malta was the logical time to do it.”

Bush Administration officials explained that one purpose of Scowcroft’s mission to Beijing was to brief Chinese officials on the talks in Malta between Bush and Soviet President Mikhail S. Gorbachev the previous weekend.

For six months, Los Angeles-based Hughes Aircraft has been seeking final approval from the Administration to sell two of its communications satellites, one to an Australian state-owned company called Aussat and the other to a Hong Kong consortium called Asiasat. Both of these satellites would then be launched on Chinese rockets in China’s Sichuan province.

The Hong Kong group’s satellite is supposed to be launched next April. Officials for Hughes and for the Australian government have been telling the Administration they must have a final decision this month on whether they will be able to go ahead with their satellite deal.

“We would like to know by Dec. 22 what we need to do when we come back to work after the first of next year,” a Hughes spokesman said Monday. “I would hope that a decision would be forthcoming in the not-too-distant future.”

The Australian government has been lobbying the Bush Administration to clear the way for the export of the satellites. Australian officials say their country will save about $200 million if the Aussat satellite is launched in China rather than another country.

“Indications have already been positive that the Administration appreciated the importance of the Aussat project to the Australian economy, and that when the domestic political atmosphere was such that the Bush Administration could move, it would,” said an Australian diplomat Monday. “I’m optimistic they’ll announce a decision to issue a license this week.”

Asked Monday whether Scowcroft had discussed the satellite deal last weekend in Beijing, the Australian diplomat replied: “I’d prefer not to comment.”

There have been signs that last year the Reagan Administration and Chinese leaders worked out a general deal in which the United States would allow the export of the satellites to China in exchange for China’s promises not to export M-9 missiles to the Middle East.

The Times reported in July, 1988, that China had concluded a deal to sell such missiles to Syria. Two months later, after a meeting with Chinese leader Deng Xiaoping, then-Secretary of Defense Frank C. Carlucci announced he had received “assurances” that China would act with restraint in its sales of weapons to other countries. The Reagan Administration gave the first, general U.S. approval for the satellite deal with China two days later.

This fall, after the Bush Administration held up final action on the export of the satellites, U.S. officials said there were new fears that China might be selling its M-9 missiles in the Middle East.

Bush hinted Monday that over the weekend, Chinese officials once again promised not to sell these short-range missiles.

“I was very pleased today, in the wake of Gen. Scowcroft’s visit, to notice that the Chinese Foreign Ministry stated that they would not sell missiles to any Middle East countries,” the President said. “That subject was raised by Gen. Scowcroft.”

One China specialist, Harry Harding of the Brookings Institution, said Monday that a renewed pledge by China not to sell missiles in the Middle East “is hardly a concession” because Chinese leaders have given the same promises in the past. “How many times do we get that concession?” Harding asked.