So begins what is supposed to be an optimistic new chapter in the world’s most important East-West drama. For the first time since the Tiananmen crackdown of 1989, the United States is eager to patch up relations and welcome Beijing to the table of global powers that cooperate with each other. Bill Clinton came into office denouncing the ““tyrants of Beijing.’’ But he would like to go out as the architect of a major new strategic understanding. A State Department spokesman predicted that 1997 will be the most active year for U.S.-China relations of his administration. But the problem, as always, will be to find something the two sides can agree on.

Clinton’s sunny state visit to Australia last week, filled with golf and snorkeling, teed up a series of exchanges with Asian leaders over such difficult issues as growing strains between North and South Korea and human-rights abuses in Indonesia. But no issue was so tough, or so fraught with promise, as the relationship with China. And all the new hopes and old doubts about China were on display as U.S. Secretary of State Warren Christopher visited Beijing and Shanghai last week. His task was to lay the groundwork for Clinton’s meeting with President Jiang Zemin in Manila, during a meeting this week of the Asia-Pacific Economic Cooperation (APEC) forum. Christopher gave none of the lectures on human rights that so infuriated the Chinese during his 1994 visit to Beijing. And he offered his hosts the full-dress summit that Beijing has sought, and Clinton has resisted, since the start of his administration. All the same, there was no sense of any real breakthrough in the air. At the end of the tour, Christopher was scheduled to deliver a major speech on ““A New Partnership.’’ At the last minute–after a draft had been distributed–he notched the title down to ““A New Era of Cooperation.’’ The idea of a U.S.-China ““partnership,’’ suggested one of his aides, wouldn’t ““pass the laugh test’’ right now.

Beijing’s leaders were not laughing. Jiang set a positive tone, telling Christopher that despite ““some twists and turns,’’ bilateral ties have improved in the Clinton years. On issues of substance, however, Jiang’s lieutenants offered little or nothing. Even as China’s Foreign Minister Qian Qichen wined and dined Christopher, he sharply criticized U.S. arms sales to Taiwan, which China considers a renegade province. And although Christopher declared both sides ““pleased with the recent progress,’’ China’s state-run media denounced America for ““meddling’’ in Hong Kong and ““blocking’’ Beijing’s membership in the World Trade Organization. So much for the declarations of good will. ““The problem is that it’s all a house of cards,’’ says a Western diplomat who has dealt with China since 1979. ““Sooner or later both sides will see that they disagree on everything.''

Power struggle: China seems to assume that, with an annual average growth rate of 10 percent, it will soon be too big to exclude from the clubs of the elite nations. Its approach to joining the World Trade Organization is a case in point. Beijing has demanded special concessions, including protections for its ailing state industries and the right to ease trade restrictions after joining the WTO, not before. The United States has insisted that China must first institute a host of trade reforms, just like other applicants. But Chinese concessions are unlikely, says one Western trade expert, because ““nobody in the government would dare put them forward.’’ The men at the top can’t afford to look soft during the power struggle over who will succeed the ailing Deng Xiaoping.

““We’re not prepared to have a detailed debate about what concessions we can make, even internally,’’ said a senior Chinese foreign-policy adviser. ““They’re probing the limits of what they can gain unilaterally,’’ says one Western diplomat in Beijing.

China’s party line toward the United States began to harden after the missile crisis this March, when Clinton sent two aircraft-carrier battle groups to signal support for Taiwan. Before that, mainland officials had argued that one possible U.S. strategy for dealing with China was to try to ““contain’’ its rise. Now they argue almost unanimously that containment is indeed U.S. policy, despite American assurances to the contrary. Published earlier this year, the popular conservative screed ““China Can Say No’’ has already spawned two sequels and a shelf full of hot-selling anti-American books. While American and other foreign investors were until recently hailed as auguries of a rich future, they are now routinely criticized for exploiting labor and importing decadence. Just last week rumors of a major new Kodak investment prompted accusations from state-run TV that the American film giant is trying to drive Chinese firms out of business. Even the Clinton administration’s promises to ““engage’’ China in wide-ranging discussions have been interpreted as a threat to engage it in battle. Since America is unwilling to accept ““China’s rise onto the world stage,’’ writes political scientist Jiang Lingfei of the National Defense University in Beijing, ““there will inevitably be a test of strength.''

This doomsday vision of a fierce struggle isn’t merely propaganda; senior policy advisers have bought into it. One of them compares the new mood to the Mao years–when Chinese were indoctrinated to believe a cataclysmic war with the capitalist world was coming. ““If you’re always saying “China Can Say No,’ what do you expect Jiang to say to Clinton?’’ asks the adviser. ““This is not the moment for Jiang to make concessions.’’ Many Beijing hard-liners still expect to forge better relations with the United States without giving ground themselves. They see Clinton’s 1994 decision to shelve the threat of economic sanctions against China for its human-rights violations as a sign of weakness–and of more American concessions to come.

Real leverage: They may be in for a surprise. The Clinton trade team is alarmed that the U.S. trade deficit with China approached $5 billion in September, surpassing even the U.S. imbalance with Japan. And pressure from Congress to balance the budget will push Clinton to seek economic growth through trade agreements, reinforcing hawkish instincts he acquired while trying to open Japan to Arkansas rice and poultry in the 1980s. Acting U.S. Trade Representative Charlene Barshefsky is likely to get the job permanently, and she is every bit as combative as predecessors like Mickey Kantor, who ruffled Asian allies during Clinton’s first term. Clinton recently joked to aides that Barshefsky is tough enough to ““bring tears to a dead man’s eyes.’’ In China, Barshefsky was instrumental in cutting a landmark deal designed to stem the pilfering of American CDs, software and other forms of intellectual property. The next task is to enforce the deal, says a senior administration official. ““We have to get the Chinese to play.''

Clinton still has real leverage. Chinese negotiators are especially eager for Washington to allow American atomic-energy companies to build nuclear plants in China–a move that U.S. administrations resisted out of concern that Beijing was passing nuclear technology to U.S. adversaries like Iraq. Last week Christopher announced that Washington would allow such investment under limited conditions, because China had agreed to track exports of nuclear material and technology. In fact, China had made the same promise last November.

China will have plenty of chances to continue lobbying. Relations have recovered from the lows of the Taiwan crisis in March. Washington sees the potential for cooperation in several key areas, from nuclear nonproliferation to the effort to defang the military threat from North Korea. China’s Defense Minister Chi Haotian is expected to visit Washington in the coming weeks to help revive military-to-military contacts that faltered after Tiananmen. The Clinton administration plans to send Vice President Al Gore to China, possibly by next March.

If all goes well, Clinton might host Jiang on his state visit to Washington sometime next year. The high-profile diplomacy would boost Jiang’s effort to consolidate his political power at home. The Chinese leaders also seem convinced that they will be able to do business with Clinton during his second term. ““You get to know your opponent best after an argument,’’ Prime Minister Li Peng told Christopher last week. That’s step one toward improving U.S.-Chinese relations. But the opponents won’t become partners as long as Washington regards the Beijing leadership as a bunch of cheaters–and as long as Beijing regards the Clinton administration as its special patsy.