CLINTON REBUKES CHINA ON FREEDOMS; HEATED EXCHANGE FOLLOWS AGREEMENTS.

Byline: Jodi Enda and Peter Slevin Knight-Ridder Tribune News Wire

In a startling display of the fundamental differences between their nations, President Clinton and Chinese President Jiang Zemin clashed over human rights and religious freedom Wednesday while signaling a cooperative era in U.S.-China relations.

With Jiang standing a few feet away, Clinton criticized the Chinese government massacre of peaceful protesters eight years ago in Tiananmen Square, saying China is ``on the wrong side of history.''

Jiang forcefully defended his government's actions as necessary for stability and insisted countries should not interfere in each other's affairs.

The sharp exchange followed nearly two hours of businesslike talks that produced promising results, most notably in Chinese efforts to acquire billions of dollars of American nuclear energy technology.

China will stop providing nuclear assistance to Iran, Jiang pledged, and will increase its efforts to prevent exports of equipment and know-how to dangerous buyers. In return, Clinton will permit U.S. companies to begin bidding on $60 billion in Chinese energy contracts.

Clinton also announced China's largest purchase of airplanes ever, a $3 billion contract to be signed today with Boeing Co., the first of several deals the Chinese plan to sign during Jiang's eight-day visit to the United States. The Chinese also agreed to reduce tariffs on $1.2 billion of U.S. computers and telecommunications equipment.

On a day of pomp and protest, the combination of agreement and dispute accurately reflected U.S.-China relations. Despite the smiles and flourishes of a Chinese leader's first state visit to the United States since 1985, the countries are neither enemies nor full partners.

Both sides hope, however, that partnership is closer to the truth.

After a rocky stretch that followed the events of Tiananmen, U.S. and Chinese leaders have agreed to disagree, publicly if necessary, while searching for common ground.

Addressing reporters, Clinton and Jiang took turns standing by diplomatically as the other discussed issues most important to him.

Pointing to ``steep differences'' on human rights, Clinton started the volley by saying, ``I am convinced the best way to address them is directly and personally, as we did yesterday and today, and as we will continue to do until this issue is no longer before us, when there is full room for debate, dissent and freedom to worship as part of the fabric of a truly free Chinese society.''

He then launched into a bit of a history lesson on democracy, saying he was pleased Jiang was heading to Philadelphia today to view two of democracy's greatest symbols: Independence Hall and the Liberty Bell.

Clinton refused to say whether, in his private meetings with Jiang, he had raised questions about specific dissidents in Chinese jails. But he said he had discussed ``every aspect'' of human rights with his Chinese counterpart.

The Chinese leader will leave Washington today without a prize he coveted. The two sides remain far apart in their efforts to negotiate China's membership in the World Trade Organization, which would increase China's access to world markets on favorable terms while requiring the Chinese to play by international rules of commerce it now flouts.

Clinton made clear that China's expectations are unrealistic and that the United States expects China to open its markets wider to American goods. The U.S. trade deficit with China topped $5 billion in August alone, thanks largely to inexpensive toys, clothes and electronics. It is expected to exceed $40 billion this year.

The nuclear power agreement is a breakthrough, however. U.S. power companies believe China will spend as much as $60 billion on new nuclear reactors in the next 25 years. Russian, French and Canadian companies already are selling nuclear technology to China, but a 1985 law prohibits U.S. investment unless the president can certify to Congress that China is not dealing nuclear technology to rogue countries.

By establishing tighter export controls, signing international agreements and promising not to trade with such countries as Pakistan and Iran, the Beijing government sets the stage for Clinton to make the long-sought decision. Congress will have 30 legislative days to overrule the president, but analysts believe the deals will go forward.

In his public remarks, intended in large part for domestic Chinese consumption, Jiang identified Taiwan as the most important aspect of U.S.-China relations. Beijing considers Taiwan a renegade province despite its current autonomy.

Clinton reiterated U.S. recognition of the People's Republic of China - the so-called ``one China policy'' - and said Taiwan's future is an internal matter. He called for more cooperation across the Taiwan Strait that divides them and would not be drawn into debate.

AT A GLANCE

President Clinton and Chinese President Jiang Zemin issued a joint statement Wednesday, declaring closer U.S.-Chinese ties:

``The two presidents are determined to build toward a constructive strategic partnership between the United States and China through increasing cooperation to meet international challenges and promote peace and development in the world,'' the statement said in part. Among agreements the two sides reached:

NUCLEAR: Implement the 1985 U.S.-Chinese Nuclear Cooperation Accord. Clinton will certify to Congress that China is no longer selling or transferring nuclear technology to other countries for weapons development, particularly Iran. This would allow the U.S. nuclear industry to export multibillion-dollar reactors and technology to China.

RELATIONSHIP: Hold regular strategic meetings between the two governments at every level, including annual meetings between the two heads of state.

HOT LINE: Establish a direct and secure communications link between the presidents, a symbolic gesture.

MISSILES: Build on a 1994 Joint Statement on Missile Nonproliferation, reaffirming commitments to halt transfers of ballistic and cruise missiles to Iran, Iraq, Pakistan, Libya, North Korea and others.

TAIWAN: Reiterate that U.S.-Chinese ties are governed by three joint communiques signed in 1972, 1979 and 1982, establishing a ``one-China'' policy in which America recognizes Beijing over Taipei as the government.

TRADE: Sign a deal Thursday between the Chinese and Boeing Co. to buy 50 airplanes for $3 billion, partly to assuage U.S. concerns about the growing trade deficit, expected to reach $44 billion this year. China indicated its intention to remove high-tech trade tariffs by participating as soon as possible in the Information Technology Agreement.

HUMAN RIGHTS: Open a dialogue on human rights, the biggest area of disagreement between the two nations.

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BOX: AT A GLANCE (see text)