U.S. Mulls Limited China Trade Curbs : Commerce: New restrictions might be imposed on army-made products. Guns would be among those easy to target, officials say.

With President Clinton approaching the final days of decision about the renewal of China’s trade benefits, the Administration is looking closely at the idea of imposing some limited sanctions on goods produced by the Chinese People’s Liberation Army.

Over the weekend, sources said, Administration officials asked for memos about how such sanctions would be enforced.

“The question now is whether there will be some sanctions against the PLA or not,” one Washington-based diplomat said Monday. “I’ve heard that these sanctions would be very limited, in the tens of millions of dollars--so low I can hardly believe it.”

Over the last few years, Chinese military units have branched out into a wide range of economic activities, manufacturing not just arms but machine tools, toys and many other products.

Any new U.S. restrictions on PLA-made goods would be especially welcomed by the AFL-CIO, which has been arguing that these Chinese products, produced by inexpensive labor and often disguised as to their origins, have been flooding American markets. However, sanctions against PLA products probably would be opposed by the Pentagon, which has been trying to revive American contacts and dialogue with the Chinese military.

There is one specific category of PLA-made products that U.S. officials say will be politically easy to restrict: Chinese-made semiautomatic guns and other assault weapons, whose importation into this country is in the process of being curbed anyway.

But those who favor curbs on China’s trade benefits are calling for much more extensive trade sanctions against PLA-made goods.

“It can’t just be guns,” said an aide to Rep. Nancy Pelosi (D-San Francisco), who is among the congressional leaders of the effort to link trade with China and human rights.

Clinton must decide by June 3 whether to renew China’s most-favored-nation trade benefits, which permit Chinese goods to be brought into the United States under the same low tariffs enjoyed by most other countries. A year ago, the President adopted an executive order calling on Beijing to make progress on human rights if it wants its trade benefits renewed beyond July.

Over the past few months, the American business community and economic officials within the Clinton Administration have complained that the Administration’s China policy could force Clinton to impose sanctions--and that the Beijing regime would retaliate against U.S. companies.

Clinton met at the White House early Monday with Secretary of State Warren Christopher, National Security Adviser Anthony Lake and other top officials. Afterward, Administration officials said that the participants had discussed ideas but not reached any decisions.

China exported more than $31 billion in goods to this country last year, while American companies sold more than $8 billion in products to China. There are no reliable estimates as to the dollar value of goods made by the PLA.

As Clinton nears his decision, one of the unsettled questions is whether he will win the support of Senate Majority Leader George J. Mitchell (D-Me.). Since 1990, Mitchell has been one of the leading proponents of using the annual renewal of China’s trade benefits as a tool to help bring about improvements in its human rights policies.

It is possible that the decision will be made in the same way it was last year, when Clinton Administration officials negotiated directly with Mitchell and Pelosi before announcing their policy.

“My guess is there are going to be round-the-clock negotiations between now and around Wednesday,” one congressional source said Monday.

Mitchell has suggested that he may introduce his own legislation, imposing some form of restrictions on China’s future trade benefits, if he thinks Clinton’s actions toward China are too weak. Administration officials would like to have Mitchell’s support for their China policy.

Times staff writers William J. Eaton and James Gerstenzang contributed to this report.