NEWS ANALYSIS : Another Battle With Congress Looms for Bush : China: Many wanted him to adopt a tougher trade policy to force improvement in Beijing’s human rights record.

By recommending an unconditional extension of China’s trade privileges, President Bush appears to be headed into yet another bruising battle with Congress this summer or fall over his policy toward the world’s most populous nation.

“I don’t know that there are going to be many people in Congress who will view the President’s approach as adequate,” observed one aide to a congressman who often supports Bush’s policies in Asia. “Many of them wanted something more. The White House still hasn’t started talking about some kind of conditional approach.”

Indeed, battles between the President and Congress over China policy are now becoming as frequent for the Bush Administration as were struggles over Nicaragua during the Reagan Administration. So far, the President has been able to defend the essentials of his policy of maintaining ties with China, but only by making concessions to Capitol Hill along the way.

Over the past few months, a consensus has been building in Congress to attach some new series of restrictions on the annual renewal of China’s most-favored-nation trading status.

The general approach would be to set a date by which China would lose its trade benefits in this country unless the regime in Beijing makes some improvements in its human rights record and limits its exports of missiles and other advanced weapons technology to Third World countries.

Two weeks ago, White House Press Secretary Marlin Fitzwater said Bush might seek to impose some new conditions on the renewal of China’s MFN trade benefits. Other Administration aides suggested the President might do this because he may lack the votes in Congress for an unconditional extension of China’s MFN benefits.

Such an action would probably have infuriated the Chinese leadership. This spring, Chinese officials have angrily denounced suggestions that their U.S. trade benefits should be made contingent on changes in their human rights policies. In their view, the human rights situation in China is a purely domestic affair in which foreigners should not interfere.

In the end, on Monday, only a week before the deadline for presidential action on a renewal of China’s MFN status, Bush decided to extend the benefits without imposing any new conditions concerning human rights or weapons proliferation.

Many members of Congress view a conditional extension of China’s trade benefits as a moderate approach or compromise, one that would permit Beijing to keep the benefits for now and give the Chinese regime at least some time to change its policies.

Among those who favor attaching new conditions to China’s trade benefits are Senate Majority Leader George J. Mitchell (D-Me.) and Rep. Nancy Pelosi (D-San Francisco), two of the leading congressional critics of the Administration’s approach toward Beijing.

A few congressmen have made it plain that they are willing to go much further. Sen. Daniel P. Moynihan (D-N.Y.) has introduced legislation that would revoke China’s trade benefits immediately, and Sen. Alan Cranston (D-Calif.) has said he, too, will support an outright revocation.

On Monday, Bush sought to mollify some of his congressional critics by coupling his extension of Beijing’s trade benefits with new curbs on high-tech exports from the United States to China. The Administration blocked the sale of high-speed computers to Beijing because of China’s recent export of missile technology to Pakistan.

However, one congressional source, a frequent critic of the effort at reconciliation with Beijing, termed the export restrictions Bush announced Monday to be “totally phony.”

He pointed out that Bush was doing no more than is required by law. Under the Defense Authorization Act enacted by Congress last year, Bush was required to cut off exports to anyone who is found to be improperly exporting missile technology.

Last month, this source said, a bipartisan group of senators sent a private letter to Bush, urging him to cut off U.S. transactions with the China Precision Machinery Import-Export Corp., the Chinese government-controlled entity involved in the sales to Pakistan.

Another congressional source, who is often sympathetic to the Bush Administration, said the restrictions on technology announced Monday do not amount to a new approach but rather are “similar to what they (Reagan and Bush Administration officials) have done in the past.”

In 1987, the Reagan Administration temporarily froze the process of liberalizing high-tech exports to China because of its irritation over China’s sale of Silkworm anti-ship missiles to Iran.

But this earlier technology curb was lifted again in less than six months, soon after then-Chinese Foreign Minister Wu Xueqian gave verbal assurances that China would stop its missile sales.

The sparring between Congress and the Bush Administration over China policy began soon after the Chinese regime used tanks to crush the series of demonstrations in Beijing in June, 1989.

In the first key test, Congress passed legislation guaranteeing Chinese students at American universities the right to remain in the United States. Bush vetoed the bill and won enough votes to avoid a congressional override, but only after he took an executive action giving Chinese students virtually the same legal protection that would have been granted by the legislation.

This spring, with a new battle brewing over China’s trade benefits, Bush sought to show his concern for human rights by inviting the Dalai Lama, the exiled Tibetan leader, to the White House.

Later this week, Congress will open hearings on China’s trade benefits. Among those scheduled to testify will be some of the best-known critics of the Chinese regime and of Administration’s policy, such as Chinese dissident Fang Lizhi and former U.S. Ambassador to China Winston Lord.

So rancorous is the climate now between the United States and China that even Bush’s efforts to justify to the American public his policy of preserving links to China may serve to foster new strains between Washington and Beijing.

On Monday, the President told his audience at Yale University that his aim is “to export the ideals of freedom and democracy to China.”

Those words may play into the hands of hard-liners in Beijing, who have been arguing for several years that the United States is plotting to undermine the rule of the Chinese Communist Party through a strategy the hard-liners term “peaceful evolution.”

Most-Favored-Nation Status

Most-favored-nation status (MFN) provides for normal, non-discriminatory trade. The United States extends MFN status to nearly every country.

Who gets MFN: In general, nearly 100 members of the General Agreement on Tariffs and Trade grant MFN to their trading partners. In doing so, they agree to accept each other’s exports at the lowest tariff rates--the rates that each charges its “most-favored nation.”

Communist countries: Under the Jackson-Vanik amendment to the 1974 Trade Act, the President can grant MFN status to a Communist country only as part of a commercial trade agreement--and only if he certifies that human rights conditions are improving within that country. The waiver must be renewed annually.

Congress: Lawmakers can reject the President’s waiver or certification by approving a joint resolution. The measure must be signed by the President or enacted over his veto.

China: It first received MFN status from the United States through a commercial trade agreement in 1980 after President Jimmy Carter waived Jackson-Vanik.

The Congressional Quarterly