U.S. CANCELS CHINESE VISIT, FREEZES FINANCING.

Byline: Elaine Sciolino The New York Times

The Clinton administration signaled its displeasure with China on two fronts Friday, calling off a long-awaited visit to Washington by China's defense minister and informally extending the freeze on new financing of U.S. business deals in China.

The two actions are meant to signal Washington's displeasure over China's war games in the Strait of Taiwan, which the administration charges are intended to intimidate voters before the presidential election today.

On a broader scale, the measures against China are the latest manifestation of the downward spiral of relations between China and the United States over a range of issues, including pirating of American movies and music, Beijing's poor performance on human rights, and sales of cruise missiles to Iran and weapons technology to Pakistan.

Senior administration officials said Friday that the United States and China have failed to resolve the dispute over the sale of sensitive nuclear-related technology to Pakistan, which led to the freeze on U.S. financing.

Complicating the picture is the fact that China is surfacing as a campaign issue. Republicans, including Senate majority leader Bob Dole, are threatening to try to withhold China's most-favored-nation trading status this spring.

That would put Clinton, who charged President George Bush four years ago of "coddling" China, but who now favors renewing those benefits, into the embarrassing position of appearing to be soft on China.

Defense Secretary William Perry abruptly decided to cancel the visit of his Chinese counterpart, Chi Haotian, after China insisted Chi be given red-carpet treatment, including a meeting with Clinton at the White House.

"A large-scale official visit is not appropriate in the current climate," Perry said in a brief statement that did not refer directly to Taiwan.

In addition, a growing number of Republican lawmakers were critical of the invitation to Chi, who was a key general during the repression of the pro-democracy demonstrations in Tiananmen Square in 1989.

The trip, scheduled for the first week in April, had tentatively included a visit to Sandia National Laboratory in Albuquerque, N.M., where nuclear weapons research is conducted; the U.S. Space Command headquarters in Colorado; and an aircraft carrier at the Norfolk Naval Base. Perry had planned to escort Chi to the U.S. military installations.

Chi's trip was scheduled originally as a way to reciprocate for Perry's visit to China in 1994 and to deepen military ties between the two countries. It would have involved a 19-gun salute at the Pentagon, which some Republicans on Capitol Hill said would have made excellent television footage for use against Clinton in the campaign.

As the strains between the two countries deepened over China's military exercises in the Strait of Taiwan, it made no sense to go forward with the visit, a senior Pentagon official said in an interview Friday.

"We tried to feel out the Chinese about whether we could squeeze it down to a straight business trip," the official said. "They wanted it to look like visiting royalty."

James Sasser, the U.S. ambassador to China, asked the Chinese to consider a less formal meeting between Perry and Chi in Hawaii or some other location in the coming weeks.