China Sanctions Put Off, U.S. Officials Say : Asia: Beijing could still be penalized for technology sales to Iran and Pakistan.

The Clinton Administration has decided to refrain for now from imposing sanctions against China for selling missile technology to Iran and Pakistan, senior Administration officials say.

The decision, which permits billions of dollars in U.S. exports of high-technology goods to continue flowing to China, was reached in recent top-level meetings in Washington on what to do about the United States’ strained relations with Beijing. The Administration is getting ready for a meeting between Secretary of State Warren Christopher and Chinese Foreign Minister Qian Qichen in Brunei next week.

As part of their effort to improve ties with China, Administration officials are preparing to invite Chinese President Jiang Zemin for a summit with President Clinton in the United States this fall, sources say. The invitation would be passed on during Christopher’s session with Qian.

But with only a few days before Tuesday’s meeting, U.S. officials still haven’t worked out what conditions, if any, would be included in a summit invitation--or whether the meeting would be in Washington or at the United Nations in New York. And they emphasize there is little chance for a summit until Beijing releases Harry Wu, the Chinese American activist recently detained while trying to sneak into China.

Although the intelligence community has come up with considerable information that China has exported missile technology, Administration officials maintain that the evidence is inconclusive.

The decision to hold off on sanctions is “not a political decision; it’s a legal decision,” insisted one Administration official. “The intelligence community has not yet reached a judgment on [Chinese sales to] Pakistan or Iran that would justify imposing sanctions.” The official acknowledged that the serious political and commercial implications of imposing sanctions against China make it all the more important to have conclusive evidence of the technology sales.

Another senior Administration official acknowledged that the Administration decided it was “just prudent” to refrain from imposing new sanctions, because relations between the two countries are at their lowest point in years.

China has reacted with outrage to the Administration’s decision to let Taiwanese President Lee Teng-hui attend a reunion last month at Cornell University in Upstate New York. It was the first visit to the United States made by any leader of Taiwan. In response, China recalled its ambassador and canceled high-level visits and exchanges between the two countries.

Tuesday’s session between Christopher and the Chinese foreign minister will be the first top-level meeting between the two governments since the furor over Taiwan.

Over the past two weeks, China has been building up the importance of the meeting. Chinese Foreign Ministry spokesman Shen Guofang said the session between Qian and Christopher will determine whether there can be a “turning point” in Sino-American relations.

But American officials maintain that the Christopher-Qian meeting isn’t as important as the Chinese say. One U.S. official said Chinese officials “are pumping up the meeting because they think they have us over a barrel. They think we owe them, that we have to be more forthcoming in order to ‘save the relationship.’ ”

“We shouldn’t put too much weight on any one meeting,” said one Administration source who has participated in internal reviews of China policy. “You can’t put it in the apocalyptic terms that they [the Chinese] have been putting it into. We’re going to make an effort [to improve relations], but they’re going to have to make an effort too.”

A law passed in 1990 requires the United States to impose sanctions on any country that knowingly exports technology that helps another nation to acquire, design or produce missiles in violation of the international agreement aimed at curbing the spread of missiles. Vice President Al Gore was among the original sponsors of the legislation.

The United States has twice imposed sanctions on China for violating this law. The George Bush Administration imposed restrictions on sales of satellite technology and high-speed computers in 1991 but lifted the prohibitions a year later. “We held back the satellites and the Cray [supercomputer], and it seemed to have some effect on them [China],” said Bush’s ambassador to Beijing, James R. Lilley. “But then they started cheating again.”

In late 1992, The Times reported that U.S. intelligence agents had found evidence that Chinese M-11 missiles had just arrived in Pakistan. For nearly half a year, the outgoing Bush Administration and incoming Clinton Administration did not act. But in the summer of 1993, the United States again imposed restrictions on high-tech sales to China.

U.S. exporters complained that the sanctions were hurting American business more than they were harming China. And over the next year, this second set of sanctions was eased.

This spring, U.S. officials turned up evidence that China had exported technology to Iran that can be used for missile development. And they found signs that China had sent more missile technology to Pakistan since 1992.