BY deciding to host the Cambodian peace talks for the first time, China has raised hopes in Vietnam, its chief antagonist in the conflict, that it may be ready for a compromise.The next round of Cambodia talks is slated for mid-July in Beijing and will come less than a month after the last talks in the Thai resort of Pattaya, where key concessions were made by the China-backed coalition of three Cambodian guerrilla forces in favor of the Vietnam-backed regime in Phnom Penh. The anti-Hanoi guerrilla coalition, whose main fighting arm, the Khmer Rouge, was ousted from power by Vietnam's Army in 1978 for being too pro-Chinese, made the surprise concessions in Pattaya after nearly four years of largely fruitless negotiations. The coalition agreed to an unlimited cease-fire, a moratorium on receiving foreign military supplies, and the choice of Phnom Penh as headquarters for the Supreme National Council (SNC), a still-vague body formed last fall to govern all four Cambodian factions. Such steps have been promoted by Vietnam in recent months after China began to hint last year that it may drop the Cambodia issue as the main obstacle to normalization of ties with Hanoi. "We highly appreciate the Chinese contribution to the Pattaya agreement," said Nguyen Co Thach, Vietnam's outgoing foreign minister and Politburo member. Other Vietnamese officials say China may have decided to force the Khmer Rouge, its closest ally in the Cambodian coalition, to stop blocking the talks and to make concessions. Relations between Beijing and Hanoi have been icy ever since about 600,000 Chinese troops attacked northern Vietnam in early 1979. The 17-day war, which took a high toll on both sides, was aimed at teaching Hanoi "a lesson" for its invasion of Cambodia and for drawing too close to Moscow. But since 1989, when the last Vietnamese troops allegedly pulled out of Cambodia and when anti-Communist movements began to hit both eastern Europe and the Soviet Union, the hard-line Communist rulers in Hanoi and Beijing have been hunting for ways to change their relationship. Secret talks between top party officials were held last September in Chengdu, China, but Vietnamese leaders came away discouraged at the stiff conditions China imposed on issues other than Cambodia. If the Pattaya agreement on a cease-fire and an arms moratorium holds, it will help the pro-Hanoi regime in Phnom Penh further cement its military dom- inance of the country, say both Western and Vietnamese officials. "The Pattaya concessions only convince Hanoi that its patience and persistence have paid off on the Cambodian issue," says one Western diplomat in Bangkok. And despite a crippling economic embargo imposed against it by the West and Japan, Vietnam has ignored pressures for it to force the regime it helped set up in Phnom Penh to share power with the Cambodia resistance forces, led by former monarch Prince Norodom Sihanouk. The Pattaya agreement, especially the call to open the SNC headquarters by November, also helps Vietnam by possibly weakening an attempt by the five permanent members of the United Nations Security Council, including China, to impose a Cambodia peace plan proposed last fall. That plan calls for UN troops to control Cambodia temporarily while elections are held. Vietnam insists that the Cambodia factions settle their differences without foreign interference. The Pattaya agreement helps support Hanoi's policy. Even if China endorses a Cambodian settlement next week that further favors Phnom Penh and Vietnam, Hanoi officials say they still have many differences to overcome with Beijing. One clue came last year when retired Vietnamese war hero General Vo Nguyen Giap visited China and was greeted warmly by his once-close colleagues in the Chinese Army. But his visit reportedly irked the younger military brass in China. "Many of today's Chinese officers won their medals in the brief war with Vietnam," explains a Hanoi official, "and they don't want normalization to take away the honors they won in that war." Hanoi hopes, however, that changes made at the Seventh Congress of the Vietnam Communist Party in late June will please China. In particular, the party removed Mr. Thach from the Politburo and as foreign minister. Since the early 1980s, he has often cited China's "betrayal" of Vietnam's communist cause. Also removed from the Politburo were Interior Minister Mai Chi Tho and party organization chief Nguyen Duc Tam, both relatives of Le Duc Tho, a prominent party leader who died last year and was largely responsible for Vietnam's anti-Chinese policy moves, including the Cambodia invasion. Thach had been a protege of Mr. Tho. Perhaps in response to these Politburo changes, Jiang Zemin, general secretary of the Chinese Communist Party, sent a congratulatory note to the new Vietnamese party chief, Do Muoi, immediately after the congress. In late July, the party leader will select a new foreign minister. A leading candidate is new Politburo member Vu Oanh. He led Vietnam's first economic mission to China in January and is reported to have studied in Moscow with Chinese Premier Li Peng. But even if he is selected, it may not mean Vietnam will kow-tow to every Chinese demand. In particular, Hanoi officials resist Beijing's insistence that they recognize a Chinese claim over two sets of islands in the South China Sea, the Paracels and the Spratlys. The Chinese Navy forcibly took seven Spratly islands from Vietnam in 1988.