Bill in a China Shop

While the Clinton family vacations on Martha's Vineyard, the president's arrangers have been preparing for one of the fall's big events: an October summit meeting in Washington with China's President Jiang Zemin. That's to be followed by a return state visit of Mr. Clinton to Beijing in 1998.

Much is being said and written urging Bill Clinton to bluntly use his summit leverage to press China's new leader (1) to end repression of dissidence and independent religious practice, and (2) to curtail nuclear-related shipments to Iran and Pakistan.

The White House team has realistically chosen a shrewder course. Instead of assuming that Jiang needs American cachet to cement his new hold on power, US national security adviser Sandy Berger has rightly judged that Jiang has already consolidated his leadership position. In Beijing last week, Berger quietly discussed with Jiang steps he could take to assure the American Congress and people that his regime is ready to begin extending its economic modernization into the political sphere. Gestures Berger suggested would showcase that change might include release of top dissidents and an invitation to religious leaders to visit congregations in China.

On the weapons front, the Clinton administration's late but welcome about-face on its fruitless policy of isolating Iran should help to make bargaining on Beijing's nuclear aid to that nation more fruitful. So should the patently sincere peace talks between demi-nuclear powers Pakistan and India. In short, the less Iran and Pakistan feel at bay the less they will press China for weapons export chicanery.

Mr. Jiang is not without challenges to his authority. He must deal with potentially vast labor unrest that will accompany the laying off of hundreds of thousands of workers from overstaffed, money-losing state industries. The welcome side of that problem is that it provides a very strong incentive for Jiang and modernizers within the Communist Party leadership to keep the job-producing cornucopia of new capitalist businesses flourishing. And that, in turn, means Beijing leaders have a continuing incentive to keep foreign investment flowing to China's new businesses. Where does the bulk of that investment come from? "Overseas" Chinese in Taiwan; ASEAN nations such as Indonesia, Thailand, and Malaysia; special-status Hong Kong; and, the US, Japan, and Europe.

In other words, Beijing can best pull off its privatization of the huge work force downsized out of state factories if it keeps peace with its neighbors and the West, who provide the capital to produce new jobs.

Mr. Jiang also must keep his armed forces happy. That means adequate pay in the face of inflation, and (again) jobs for downsized soldiers. It's a sign of his government's control in this area that officials in Taiwan are somewhat less fearful of a repeat of Chinese provocations off their coast. Mr. Clinton should reiterate his pleasure about this when the two men meet.

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