China Frees 2 Protest Leaders, Opens Oil Tracts : Asia: The actions serve as a coordinated bid for better Sino-U.S. ties. Foreign investment is sought for oil exploration.

In a coordinated bid for better Sino-U.S. ties, China on Wednesday released two key leaders of the 1989 pro-democracy movement and threw open large tracts of land to foreign oil exploration.

One of those released was Wang Dan, a former Beijing University student who headed a police “most-wanted” list after army troops crushed the Tian An Men Square protests. He returned to his parents’ home, where he spent the evening giving interviews to foreign reporters.

Wang said he hopes to resume his studies and that he wants to keep working for democratic change in China. He looked pale, and weaker than in 1989, but seemed in good health. He said he was “satisfied” with his treatment in prison.

Also released was student leader Guo Haifeng, the official New China News Agency reported. Wang, 23, and Guo, 27, were serving four-year terms. Wang would have completed his sentence on July 1, while Guo was due for release on June 3.

A new bid to draw foreign investment into China’s oil industry was announced at virtually the same time as the prisoner releases.

Wang Tao, president of the China National Petroleum Corp., told reporters at the Great Hall of the People that 12 promising areas with potential oil reserves of 8.2 billion tons will be opened to foreign oil exploration and development. The areas covering 161,000 square miles may also hold natural gas reserves of 2.5 trillion cubic meters, Wang said.

In a comment that stood out as an apparent gesture of friendship, recalling the early days of Sino-U.S. romance, Wang noted that “the United States is a country that was first in its willingness to share oil technology with us.”

Offshore and some less attractive lands have previously been opened to foreign companies.

The New China News Agency later reported that Premier Li Peng, in a meeting Wednesday with former Secretary of State Alexander M. Haig Jr., explicitly linked the new oil policy with hopes for closer American ties. Li noted that the newly opened areas include the Tarim Basin in China’s Far West, which could have vast potential.

“China welcomes U.S. oil companies to participate in the exploration and joint development,” Li told Haig, who was on a private visit, the official news agency said.

Kevin Rolens, vice president of Amoco Orient Petroleum Co., who was present for Wang’s announcement, said that more study will be needed before its importance can be fully assessed but that his company has been “looking forward to it a long time.”

The Tarim Basin area “is the size of the state of Texas, and that’s what gets people excited,” Rolens explained. “If there’s oil in it, it would be quite large. . . . The Chinese have had some early discoveries. But it’s a vast area, it’s under-explored and obviously will attract a lot of attention.”

Li was not quoted making specific reference to the prisoner releases. But the official news agency paraphrased him as declaring that “the maintenance and development of Sino-U.S. ties calls for joint efforts by the two countries, and all artificially imposed obstacles should be cleared away.”

The news agency also announced what it headlined as the “release” of Zhu Hongsheng, 76, a Catholic priest in Shanghai sentenced to a 15-year prison term. Zhu had been released on bail in 1988 for medical treatment, the report said, without making it clear whether he remained free on parole or was later imprisoned again. A Shanghai court Wednesday canceled the remaining years of his term “in view of his behavior,” it said.

Beijing is anxious to head off any possible decision by the Clinton Administration to link trade policy with human rights demands. It wants to promote the message that political repression is easing, while economic opportunities are growing.

The freeing of Wang and Guo, as well as the release in recent months of other political prisoners, are, in one sense, only tiny concessions by Beijing. Western human rights groups estimate that Chinese prisons still hold hundreds of participants in the 1989 protests, which erupted in cities and towns across China; thousands of other prisoners are being held for political or religious reasons.

The New China News Agency asserted Wednesday that the release of Wang and Guo means that all students imprisoned for the protests have now been freed; this is almost certainly false.

There has been no indication, for example, that Zhai Weimin, ranked No. 6 on the most-wanted list, has been released. Arrested in May, 1990, after nearly a year in hiding, he is believed to be serving a 3 1/2-year sentence. There are many other students known to have been imprisoned but whose release has never been announced.

Still, for a pro-democracy leader of Wang’s stature to meet openly with large numbers of foreign reporters in Beijing is an event not seen since the terrifying night of June 3-4, 1989, when soldiers shot their way into the city against crowds of citizens blocking their path. About 1,000 people were killed by the troops, according to Western intelligence estimates.

Wang appeared to be unintimidated, but he chose his words with care. He said he intends to write a book but that he needs more time to catch up with events of the past four years before he can make comments about some issues.

The New China News Agency offered no explanation for the early release of Wang and Guo other than to say they had “observed prison regulations.”

Wang had been the key organizer of what were called “democracy salons” on the Beijing University campus in the months leading up to the 1989 protests. The student-led movement developed in part from those informal gatherings. Guo played a key role in one of the most dramatic moments of the seven weeks of demonstrations--kneeling with two other students on the steps of the Great Hall of the People, offering a petition to the nation’s leaders assembled inside as thousands of demonstrators gathered in Tian An Men Square.

In the context of the political repression that engulfed Beijing after the 1989 crackdown--and which is only beginning to ease--Wang’s willingness to meet reporters Wednesday was an act of bravery.

There was no active police harassment of Wang or the correspondents who went to his home--not even an obvious police presence at the apartment building. But at an intersection 100 yards away, sitting in a car with darkened windows, a Chinese man was positioned to keep track of comings and goings.