Obstacles Seen Blocking Fang Deal : Beijing: The U.S. effort to get a Chinese dissident freed from the American Embassy could be scuttled.

The Bush Administration’s highly publicized effort to win the release of Chinese dissidents Fang Lizhi and Li Shuxian from the U.S. Embassy in Beijing has run into serious obstacles that could scuttle chances for a deal.

Since the mission to China last month by National Security Adviser Brent Scowcroft, the Administration has been exploring a deal with the Chinese regime that would enable Fang and Li, his wife, to go abroad. They have been confined inside the U.S. Embassy since last June, when Chinese troops crushed the pro-democracy movement at Tian An Men Square.

One proposal reportedly under discussion would allow Fang to settle in Australia and teach astrophysics at the Australian National University in Canberra. Fang, a scientist, is sometimes called “China’s Sakharov” because of his determined support for human rights and democratic changes that would end the Communist Party’s monopoly on power.

Fang’s release could prove helpful to President Bush in defusing the public and congressional criticism of his attempts to mend relations with the Chinese leadership of Deng Xiaoping. When Congress goes back to work later this month, it is expected to vote on a package of sanctions aimed at penalizing the Chinese leadership for its repression of dissent.

Over the last few weeks, the U.S. effort to negotiate Fang’s freedom appears to have run into several barriers:

--Fang’s family and friends are seeking to make sure that his son, Fang Zhi, who is now living in Beijing, will be able to leave the country along with his parents. Otherwise, they argue, the Chinese leadership will use Fang Zhi to deter Fang from criticizing or organizing opposition to the regime after he is abroad.

“I certainly hope that my brother will also be permitted to come (abroad),” Fang Ke, another son of the Chinese dissident, told The Times this week. Fang Ke came to the United States two years ago and is studying physics at a university in Michigan.

--Some of Fang’s own supporters in the United States have expressed strong reservations about a deal for his release, saying that it would give the American public the wrong impression that the political climate inside China has eased.

“Letting out Fang Lizhi would just be a symbolic act (for China),” says Merle Goldman, a Boston University professor. “The persecution of Chinese intellectuals will continue. In fact, this could make things worse for them.”

--Meanwhile, U.S. officials say, the Chinese leadership--or at least some faction within it--seems to be pressing for China to take a tough line in its dealings with the United States.

On Wednesday, the Chinese Foreign Ministry said in a written statement that “the only way out for Fang Lizhi and Li Shuxian is to plead guilty immediately and mend their ways,” apparently indicating for the first time that China would want Fang to make some sort of public confession before he is allowed to go abroad.

On the same day, the People’s Daily, the Communist Party organ, published a front-page story in which a leading Chinese education official lambasted the United States for allowing Chinese students to remain in this country.

“The United States has . . . grossly interfered in our internal affairs,” said Li Tieying, head of China’s State Education Commission.

This hostile rhetoric caused some U.S. officials in Washington to voice pessimism about the prospects for winning Fang’s release.

“The mood around here is not positive about the way things are going and the clock is ticking,” said one U.S. official. “I don’t like the signals coming out of there (China). . . . There’s not much more to negotiate. Scowcroft went over there and that was a signal. What more is there to negotiate? What more do they want? Do they want the President to go over there (to Beijing) next week?”

This official and others in the Bush Administration say that they believe the revolution in Romania and the execution of dictator Nicolae Ceausescu have created a “general state of unease” among Chinese leaders that may make it more difficult for them to reach agreement on the release of Fang.

“Romania seems to have caused a circle-the-wagons mentality (in China),” said one U.S. official. “The events in Romania may have cowed those Chinese leaders with some reformist instincts.”

Some Chinese students and exiles have said that they believe Fang’s release from his embassy confinement would enable him to help unify and energize the fledgling movement for democracy among Chinese living overseas--so long as he does not go abroad under conditions that would inhibit him from speaking his mind.

On the other hand, some of Fang’s friends and supporters here say they worry that Fang’s release could ease international pressure on China for changes in its human rights policies--and at the same time that it could damage Fang’s reputation inside China.

“In certain respects, it’s almost better that he (Fang) stay there (inside the U.S. Embassy),” says the American writer Orville Schell. “The harder a bargain he drives, the more credibility he acquires. . . . A key factor is his son (Fang Zhi). If he can’t get out (of China) together with his son, he’d be in a difficult position, and I’m not sure he’d come out.”

Schell said that he believes Fang is “a pawn in the game that Bush is playing with the Chinese leadership.”

In apparent recognition of the tricky political problems that have arisen, Bush Administration officials recently have begun to play down the significance of any possible deal with China to obtain the dissident’s freedom.

Fang “is one element of a much larger situation (between the United States and China),” one senior Administration official said Wednesday. “Even if this is settled, for sure it will not resolve everything.”