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CHINA WARNS U.S. AGAINST IMPROVED TAIWAN RELATIONS

China issued a harshly worded protest Saturday against a recent upgrading of Washington's relations with Taiwan, warning of "grave consequences" from the new U.S. policy.

Vice Foreign Minister Liu Huaqiu, in a statement reported by the official New China News Agency, also implicitly renewed a longstanding Chinese threat to take military action against Taiwan if it ever formally declares independence.Liu threatened that U.S.-China relations will face new "difficulties and crises" as a result of the U.S. policy, announced Wednesday, which provides for slightly freer public contact between U.S. and Taiwanese officials and clearer identification of Taiwan's representative offices in the United States.

In a "strong protest" delivered to U.S. Ambassador J. Stapleton Roy, Liu charged that the United States has adopted a policy of creating "two Chinas" or "one China, one Taiwan." The question of Taiwan will become an "explosive issue" if not handled properly, Liu declared.

The U.S. Embassy had no immediate comment on the Chinese protest.

Taiwan, which officially calls itself the Republic of China, is governed by the Nationalist Party, which fled to the island after its 1949 defeat by the Communists in China's civil war. Until a few years ago, Taipei and Beijing agreed that Taiwan is part of China but argued over which government was the legitimate ruler of the entire nation.

Now, Taiwan is seeking greater international recognition as a separate political entity in which the Taipei government claims to govern only Taiwan. Taipei argues that China is a single nation with two governments, much like Germany before its reunification, and it has expressed interest in joining the United Nations on that basis.

In recent months the Clinton administration has taken far more dramatic measures to improve relations with Beijing. In May, President Clinton severed the link between human rights and trade. And two weeks ago, Commerce Secretary Ron Brown led a sales mission to China in which he avoided public criticism of Beijing's human rights record.

Liu specifically warned Saturday, however, that China will not show greater flexibility on the issue of Taiwan in response to these gestures.

"We will never sit idle if the Taiwan authorities go in for Taiwan independence with support from foreign forces and turbulence breaks out in Taiwan as a result," he added. Statements of this nature, which Beijing has made before, are generally interpreted as threats to invade or otherwise take military action.