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DIFFERENCES REMAIN, BUT HOPE IS BUILDING FOR U.S.-CHINA SUMMIT

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After two days of talks that left "fundamental differences" in Chinese-American relations unresolved, a senior State Department official said Sunday that China nonetheless wanted to proceed with preparations for a summit meeting between President Clinton and President Jiang Zemin in October.

The positive tone from the official, Undersecretary of State Peter Tarnoff, suggested that both Washington and Beijing were determined to build on the momentum created last week with the release of the Chinese-American human rights activist Harry Wu and the subsequent White House decision that Hillary Rodham Clinton would attend the U.N. Fourth World Conference on Women in Beijing in September.After a half-hour meeting with Foreign Minister Qian Qichen on Sunday and several hours of discussions with Qian's subordinates Saturday, Tarnoff said at a news conference: "While on substance the differences were not bridged, I think we did have a full airing of views. And there was a commitment on both sides that there are other aspects to the relationship we are determined to proceed to work on together, notably the upcoming meetings of our foreign ministers and presidents."

The importance of this restrained and generally positive outcome to the visit is that it may begin to stabilize the fragile Chinese-American relationship, which

erupted in May when Clinton decided to allow Taiwanese President Lee Teng-hui, to make a private visit to the United States in June.

A summit meeting is still anything but assured. Administration officials, however, have been saying for weeks that there is a tight "window" in which to try to prepare for a meeting between Clinton and Jiang during the 50th-anniversary celebrations for the United Nations.

It is thus necessary to press an American diplomatic effort, the officials said, if only to stop the deterioration in relations and the escalating demonstrations of military power that China, and now Taiwan, are planning in the East and South China Seas.

The additional significance of the positive tone emerging from the talks this weekend is that it signals an easing in the explosion of anger among China's military leaders over American policy toward Taiwan.

It may also signal that Qian, who has been the architect of China's recovery from the isolation that followed the 1989 Tiananmen massacre, has somewhat redeemed his influence in the management of foreign policy.

It is a policy that has been undermined this summer in internal factional struggles both with the military leadership, and with the State Security Ministry, which supervised the apprehension and handling of Wu, the human rights activist.

In his remarks to reporters, Tarnoff placed great emphasis on a reiteration that "far from seeking to isolate China, we desire to engage the People's Republic in a wide-ranging and constructive relationship with us and with the international community."

"The relationship is important to them, as it is to us," he said, "and in many respects that is the message that I brought here: that we want to continue to talk about things, that we have too much at stake."