China Sees Boost for Trade in U.S. Move : Reaction: Beijing expresses restrained satisfaction at Clinton's decision. Other Asian leaders also welcome policy shift.

TIMES STAFF WRITER

Chinese officials reacted with restrained satisfaction Friday to President Clinton's announcement that the United States will renew its favorable trade terms with China--and, more important, "de-link" trade from human rights issues.

"This decision will create favorable conditions for the further strengthening and expansion of trade and economic cooperation between the two sides," government spokesman Wu Jianmin announced at a news conference. "The Chinese government and people welcome this decision of President Clinton."

China had sought the removal of human rights conditions during a year of hard lobbying and diplomatic efforts.

On Thursday, a subdued Clinton granted the Chinese precisely what they wanted: the restoration of most-favored-nation trade status and the reversal of a U.S. policy linking MFN to human rights--a policy that has haunted Sino-American relations for the last five years.

But the Chinese held back from overt celebration over the diplomatic victory because Clinton also ordered a ban on the $100-million-a-year import of weapons and ammunition, and kept in effect some sanctions established by the George Bush Administration after the army crackdown on protesters in Tian An Men Square in 1989.

In what amounted to the only joke of the day, spokesman Wu said he heard about Clinton's decision by listening to the Voice of America. One of the conditions set by the Clinton Administration was that the Chinese stop jamming VOA broadcasts.

In Hong Kong, Shanghai and Beijing, American residents and business people, many of whom fought strenuously for renewal of MFN, lauded Clinton's decision.

"Overall, I think we can say we won," Frank Martin, the president of the U.S. Chamber of Commerce in Hong Kong, told the Associated Press.

Phil Carmichael, president of the American Chamber of Commerce in Beijing, said at a news conference that he was relieved that he would now have more time to spend on his business.

"It means I won't have to spend one-third to one-half of my time each year trying to get MFN renewed," he said.

Other Asian governments also welcomed Clinton's action.

"From the start, we had maintained that there should be no connection between trade and human rights issues," Malaysia's deputy prime minister, Anwar Ibrahim, said Friday.

Japanese Prime Minister Tsutomu Hata said renewal of China's trading benefits is very important for the economic development of the Asia-Pacific region.

Some observers said Clinton's about-face could have a severe impact on U.S. prestige.

"You could call it the Clinton Administration's declaration of defeat," Koji Igarashi, Washington correspondent for the influential Asahi newspaper, wrote in its evening edition Friday.

"It is a 180-degree change in direction from policy up until now and leaves the strong impression that (Clinton) gave in completely to China's demands."

In Washington, however, White House officials made an apparent effort to show how hard Clinton worked to try to achieve human rights progress in China. The officials disclosed that a Cabinet-level meeting in April led to a plan to send Michael H. Armacost, former U.S. ambassador to Japan, to China as a private emissary.

At the time of President Richard Nixon's funeral in Yorba Linda in April, three top Administration officials met with Chinese Vice Premier Zou Jiahua in a private room of the Nixon Library to tell of him of the emissary's plan to visit.

"Clearly, the feeling was that an additional channel was needed," one senior Administration official said Friday.

Times staff writer Jim Mann in Washington contributed to this report.

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