IN visiting India this week, Chinese Premier Li Peng is trying to deter unrest in Tibet and bolster its diplomatic position in the face of the growing global power of capitalist countries, diplomats say.The Chinese premier hopes that by fully normalizing relations with India, China will strengthen its leverage in South Asia, Western and Asian diplomats say. Sino-Indian relations have gradually improved in recent years after more than two decades of tension following a 1962 border war. Mr. Li is the first Chinese premier to visit India in 31 years. Li's trip reflects anxiety among China's leadership that it might face the same wave of ethnic unrest and anticommunism that is sweeping across the former Soviet Union and parts of Eastern Europe, the diplomats say. "China wants to build a buffer of friendly states around it" to protect it against external threats and discourage aid to separatists at home, says an Asian diplomat. Officials of the world's largest remaining communist state are fearful of what they see as formidable ideological foes inside and outside Asia. They say that capitalist countries have conspired to promote a "peaceful evolution" in China toward democracy and a market economy. Li is also expected during his five-day visit ending Sunday to urge New Delhi to restrict the activities of the Tibetan government in exile in India. About 110,000 Tibetans live in India, many of whom fled their country after rising up against China's occupation in 1959. China has violently suppressed protests in Lhasa, Tibet, by Tibetan nationalists since 1987. New Delhi has already obliged China on one of its security concerns. Police have arrested more than 300 Tibetans and Indians opposed to China's rule of Tibet since Dec. 8, according to reports by the Associated Press in New Delhi. The police have rounded up suspected protest leaders and sealed off Tibetan refugee camps. The exiles have labeled the period of Li's visit "black week" and pledged to stage nonviolent demonstrations. The office of the Dalai Lama, Tibet's exiled theocrat, has condemned the detentions while welcoming the normalization of relations between the world's most populous countries. The Sino-Indian rapprochement "should not be made at the expense of the basic human rights and freedoms of the Tibetan people," the office of the Dalai Lama said in a statement. Although recognizing China's claim to Tibet, India says it will continue to grant sanctuary to the Dalai Lama because of his high position in Tibetan Buddhism. China and India plan to sign protocols concerning trade, cooperation in space research, and the opening of consulates in Bombay and Shanghai, Indian officials say. The two countries agreed to improve relations while maintaining conflicting border claims. Beijing says India occupies 34,700 square miles of its territory on the eastern portion of the border; New Delhi says China holds 14,500 square miles of its land in the west.