INCREASINGLY frustrated by China's penchant for selling lethal weapons abroad, the Bush administration and Congress remain deadlocked over what to do next.
Playing the "good cop" is President Bush, who says that the only way to convince Chinese leaders to curb arms sales and human rights violations is through a policy of quiet persuasion.
Playing the "bad cop" is Congress, which is determined to use the leverage provided by a huge US trade deficit to force China to make reforms.
As in past years, the battle has been joined again over the question of whether to put conditions on the extension of China's most-favored-nation (MFN) trading privileges with the United States.
"Placing conditions on MFN is another shot across the bow. It will be a prod to keep the Chinese moving ahead," says American Enterprise Institute China scholar Thomas Robinson. "But conditioning MFN is too blunt an instrument to bring about the changes we need."
But US Rep. Nancy Pelosi (D) of California, one of the chief architects of a House-Senate conference report that imposes conditions on the renewal of MFN, says: "We need to use our leverage with China to make the political climate safer, trade fairer, and the world safer."
"The choices are not between isolating or kowtowing to China," adds Representative Pelosi. "No one is talking about cutting off ties with China; we're talking about using leverage."
The conference report was passed in the House last November by a sweeping 409-21 majority. The Senate approved it Tuesday by a 59 to 39 vote, short of two-thirds majority needed to override an expected presidential veto.
Congress and the Bush administration have been more divided on China than any other foreign policy issue. The divisions have sent mixed signals to a Beijing government that, apparently unmoved by US concerns over its alleged human rights violations, jailed seven more political dissidents on the eve of the Senate vote.
Revocation of MFN could cost China privileges that last year contributed to a $12.7 billion trade surplus with the US, up from $6 billion in 1989. Trade with the US is now one of China's main sources of hard currency.
Under the terms of the conference report, MFN would not be renewed unless, by June, China demonstrated "substantial progress" on trade, weapons proliferation, and human rights issues. The bill also requires China to lift restrictions on US imports and to release pro-democracy demonstrators arrested in 1989 in Beijing's Tiananmen Square.
The controversy over China policy was intensified last week when the administration announced that it was lifting a ban on the sale of high-tech items to two Chinese firms implicated in the sale of missile technology to Pakistan.
The sanctions were lifted after China, confirming an oral promise made to Secretary of State James Baker III during a trip to Beijing last November, pledged in writing to adhere to the Missile Technology Control Regime (MTCR) that bars the export of missile technology.
But, in closed session Tuesday, CIA officials told the US Senate that during the past year China has sold $250 million in weapons and nuclear and missile technology to several militant Arab states, including Syria and Iran, with another $1 billion in future sales planned.
Bush administration officials say the Chinese are just completing deliveries of items already paid for. Lawmakers opposed to Mr. Bush's policy of extending the carrot say the stick of US sanctions is needed all the same.
"We need to force China's leaders to choose between a weapons market worth hundreds of millions of dollars and an American consumer market in which China enjoys a $12.7 billion annual surplus," says Sen. Joseph Biden (D) of Delaware, a leading proponent of conditioning China's MFN trade status.
The US has also objected to China's human-rights practices, which a recent State Department report described as "repressive" and as falling "far short of internationally accepted norms."
Baker obtained no concessions on human-rights issues in November. The US was rebuffed on the subject again in January when, in a meeting with Mr. Bush in New York, Chinese premier Li Peng said human rights concerns were being used as an excuse by outsiders to meddle in China's internal affairs.
Bush administration spokesmen insist that the fruits of the Baker visit have justified the administration's policy of engagement with China.
China agreed to curb exports to the United States of products made with prison labor and to protect American intellectual property. Moreover, a few Tiananmen prisoners have been quietly released since November.
Many China experts agree with the administration that there is no alternative to engagement, since isolating China and denying MFN would only penalize the country's small but growing entrepreneurial class which is the engine of the very economic and political reforms the US is seeking.
"Our interest is to help develop China and its economy rapidly," says Dr. Robinson. "Economic development means marketization, and marketization will work in favor of democracy."
Pelosi says the more important task is to send the right signal to the younger generation of Chinese politicians who will soon take the reigns of power from the country's aging leaders.
"Unless we weigh in," she says, "the new leaders may have positions like those of the old leaders. We're talking about strengthening the hand of the reformers in China."