EDITORIAL : CLINTON'S CHINA CLOUD FEINSTEIN COULD SERVE HER COUNTRY WELL BY URGING A THOROUGH INVESTIGATION OF FUND-RAISING IRREGULARITIES.

DEMOCRATIC Sen. Dianne Feinstein is in a unique position to lead at a critical time in U.S.-Chinese relations. She should seize the moment by adding her voice to a bipartisan push to name a special outside prosecutor to investigate the Clinton-China campaign fund-raising connection.

The Clinton administration's out-of-control lust for campaign money threatens to corrupt the nation's foreign policy. China's desire to assert itself as a world power perhaps led to its plan to funnel $1.8 million in campaign contributions to influence American policy.

Enter Feinstein. As a respected member of Congress, her call for an outside prosecutor would carry considerable weight.

First and foremost, she remains a credible Democrat. A Justice Department task force has found no evidence that Feinstein knowingly received illegal payment from the Beijing government, even though she was identified by the FBI as being targeted by China to receive illegal campaign contributions.

(Feinstein has been a long and ardent supporter of having the United States developing a strong and positive relationship with China. As mayor of San Francisco, Feinstein developed a friendship with the mayor of sister city Shanghai, Jiang Zemin, who is now the president of China. She has been visiting that country since 1979.)

When she went to the Senate, Feinstein made U.S.-China policy a priority. She sits on the East Asian and Pacific affairs subcommittee of the Foreign Relations Committee, which oversees U.S. relations with China.

As such, she understands China's importance as an emerging world player and America's eighth-largest trading partner. (The United States has a $50 billion annual trade relationship with China.)

Despite her support for healthy ties with China, Feinstein has not been shy about criticizing that country when the situation warranted. Just this week, she joined California's other Democratic senator - Barbara Boxer - in asking the Clinton administration to conduct a national security review of plans to lease part of the former Long Beach Naval Shipyard to a China-owned shipping company.

There is an urgent need for such a review. Congress must make it clear now that the federal government is not for sale to the highest bidder.

Moreover, it is becoming imperative that Attorney General Janet Reno request the appointment of an independent counsel to review a broad range of charges of illegal activity in campaign fund raising, including the Chinese connection.

Apart from trade, China is a force to be reckoned with. However, the death of Deng Xiaoping has created uncertainty about the path Beijing will take. Meanwhile, Hong Kong is preparing to revert to Chinese control - and dissidents are still beaten, jailed and silenced. The United States must take charge in asserting positive influence where possible with China.

But first we need to know whether U.S. policies are being shaped out of concern for its national interests - or the advancement of certain private interests. That is why an investigation is necessary to learn whether the Clinton administration is pursuing a hidden agenda with China - or Beijing has used, or tried to use, illegal means to influence the political process in the United States.