PERSPECTIVE ON ASIA : Play Bridge, Not Poker on Taiwan : The U.S. and Japan must be prepared to use their trump card--economic leverage--to keep China in line.

When President Clinton and Japanese Prime Minister Hashimoto meet in Santa Monica on Saturday, they will have to confront how to respond to China’s bald-faced threats against Taiwan. The United States and Japan must stand shoulder to shoulder in using their economic leverage to place some limit on Chinese pugnacity in East Asia, the world’s most dynamic region.

The stakes are high. Taiwan is a successful market-based democracy, a cog in the global economy (with the world’s second-largest foreign currency holdings), an emblem of American values and a neighbor and partner of Japan.

American policymakers have wisely avoided the kind of public brinkmanship that might make it harder for Beijing to abandon its menacing policy. Privately, Washington surely will help China’s leaders understand that an attack on Taiwan would have dire consequences, including military confrontation with the United States. But this is not enough.

The present danger is not that China will launch an all-out invasion; its military lacks such capabilities. Instead, China can keep intimidating Taiwan with missile tests, amphibious maneuvers and similar thuggery below the threshold that would warrant American military intervention. Deterring a calculated Chinese strategy to frighten Taiwan is the immediate problem. It will require the United States and Japan to warn China of the costs of such a course. China’s rulers have come to believe that they can have it all: bountiful foreign trade and investment, dazzling economic growth, expansion of offensive military power and the freedom to bully their neighbors and trample their own citizens’ rights without serious opposition from the great democratic powers.

The spell cast by the vast Chinese market has kept the United States and others from challenging China’s troublesome policies. Washington’s decision in 1994 to delink China’s most-favored-nation trade status from its sorry human rights record helped convince the Chinese that it is they who have the leverage, or at least the nerve to use it. They may now believe that their trading partners have so much to lose from curtailing economic relations with China that Taiwan can be brought to heel--not by invasion but by intimidation--at little cost.

The task, then, is to convince the Chinese that their present course could jeopardize China’s access to markets, capital and technology. The United States cannot do this alone. With its huge economic interests in China--$50 billion in trade and $3 billion in investment annually-- Japan’s position is pivotal. Tokyo will not be eager to make the future of these economic interests contingent on China’s good behavior. But without its leverage, the United States will have none.

The Chinese are shrewd enough to know that the United States cannot play the economic card without a partner. They can easily expand economic cooperation with Japan to offset any U.S. sanctions. They probably could get the United States to soften a tough stance, since without Japan’s commitment it would only hurt American commercial interests. So in this crisis, we should play bridge, not poker, with Japan our partner and China in a crossruff. First, the United States will have to ask Japan to accept this responsibility and the sacrifice that could go with it. In light of the stakes--for Japan as much as anyone--it is not too much to ask.

During the Cold War, very little was asked of Japan. America fought wars in Korea and Vietnam, contained the Soviet threat, made China back down more than once and gave Japan enough protection that the Japanese could enjoy security and prosperity with virtually no defense burden. Even now, we don’t ask much: If another Korean War broke out, the most the United States could hope for is that Tokyo would not deny our forces the use of Japan’s airfields. But on the matter of Taiwan, we should insist that the Japanese join us in linking future economic cooperation to an end to China’s coercive campaign.

This week’s summit can lay the foundation for a common Japan-U.S. position: Further Chinese threats against Taiwan will trigger a joint review of all economic cooperation under the jurisdiction of the two partners’ governments, along with a joint call for a parallel review of the China programs in the World Bank and International Monetary Fund. The United States and Japan would of course reaffirm their acceptance of “one China,” while making clear that the use, or threat, of force to achieve it is unacceptable and would preclude Chinese integration in the world economy.

If Japan and the United States together send such a message, Beijing will get it.