Senate Fails to Override China Policy Veto : Trade: Bush’s victory means Beijing will retain most-favored-nation benefits unconditionally for another year.

For President Bush and for the leadership in Beijing, the battles in Congress over U.S. policy toward China never seem to end. And on Capitol Hill, support for the Bush Administration’s approach continues to slip.

The President managed Wednesday to squeak by another year’s legislative skirmish with Congress over the continuation of China’s most-favored-nation trade benefits. Bush’s victory came when the Senate failed to override his veto of legislation making the renewal of the low-tariff benefits for another year--beginning next July--conditional on improvements in China’s human rights, arms export and foreign trade policies.

The Senate vote was 60 to 38 in favor of overriding the veto--six votes short of the two-thirds majority needed to enact the legislation over Bush’s opposition.

It was the closest vote yet on U.S.-China policy since the Beijing massacre of 1989. Last July, Bush’s opponents mustered 55 votes; in January they got 59. The House voted last week, by an overwhelming margin of 357 to 61, to override Bush’s veto.

More congressional battles may be only a few months away. Senate Democrats, led by Majority Leader George J. Mitchell (D-Me.), are talking about submitting a new bill that would make renewal of most-favored benefits conditional on China restricting its arms sales.

“I expect Mitchell to keep hammering away,” one Administration source said.

And the White House has only until June to recommend the extension of China’s trade status into next year, and there may be renewed efforts in Congress this summer to revoke or attach conditions to that status. As a Communist country, China is legally required to get an annual extension of its most-favored privileges.

Signs are mounting that Bush may not be able to hold the line much longer.

“The lobbyists for the White House have told (National Security Adviser Brent) Scowcroft they can’t carry this forever, that sooner or later the Democrats are going to win,” acknowledged one Republican congressional staffer. The prospect is not that Congress will revoke China’s trade benefits outright but that it may eventually impose a series of conditions on their renewal, conditions that China has said would be unacceptable.

“There could be some slippage among Bush supporters,” said Donald Anderson, president of the U.S.-China Business Council, a private group that represents American companies doing business in China. “We’re hearing there’s growing battle fatigue on the Republican side. People are saying to the Administration, ‘We’ve been with you for two years but maybe not much longer.’ ”

Some Administration officials hope the battles over China policy will go away, or that the Democrats will drop them after the November elections.

“Before the election, he (Bush) has got to be very careful, but if the President is reelected pretty soundly, he’ll be in the driver’s seat next year,” one official predicted.

For now, the continuing series of congressional votes means there is always a cloud, a threat of major policy change, looming over relations between the United States and China.

Some officials believe the repeated congressional tests have discouraged American companies from putting new money into China. Over the past year, in order to stave off defeat in Congress, Bush has been required to make significant policy concessions to win votes from “grain Democrats”--Democratic senators from those states that sell wheat to China. Those concessions, in turn, became new irritants in the eroding relations between Washington and Beijing.