By Thomas W. Lippman
Washington Post Staff Writer
Saturday, January 31, 1998; Page A18

China emerged yesterday as the most improved country in the State Department's annual survey of human rights conditions around the world, a reflection of both modest changes in China and of the administration's determination to build more cordial relations with Beijing.

John Shattuck, the assistant secretary of state for human rights, said at a news briefing that "there has been no major change in China over the last year." But there has been major change in the way the life in China is depicted in the department's country-by-country assessment.

While noting that the Chinese government remains intolerant of political dissent, the report issued yesterday said, "Chinese society continued to become more open and to diversify at a rapid pace. New social groups with economic resources at their disposal have arisen and started to play a role in community life."

Overall, the report found, "Average citizens go about their daily lives with more personal freedom than ever before. They also continued to enjoy a higher disposable income, looser economic controls, greater freedom of movement, increased access to outside sources of information, greater room for individual choice and more diversity in cultural life."

A year ago, when U.S.-China relations were just beginning to emerge from a period of tension over Taiwan and other issues, the key passage in the annual rights survey said, "All public dissent against the [communist] party and government was effectively silenced by intimidation, exile, the imposition of prison terms, administrative detention or house arrest. No dissidents were known to be active at year's end."

During 1997, however, the Clinton administration labored on several fronts to improve its relations with Beijing, including President Clinton's reception of Chinese President Jiang Zemin on a state visit. The thaw continued yesterday with a rights report that emphasized reforms undertaken last year in Chinese criminal and penal systems and the increased access of China's people to external markets and information.

"I think the positive developments that I've noted are a reflection of, to a certain extent, the success of the [administration's] policy," Shattuck said. That policy stresses economic and strategic cooperation as a key to opening up Chinese society and eventually to greater personal and political freedoms.

China remains "an authoritarian state," the report said. But it added that "economic reforms are raising living standards for many, providing greater independence for entrepreneurs, diminishing state control over the economy and people's daily lives and creating new economic opportunities."

That assessment drew a mixed response from independent human rights observers.

"It's important to note positive developments, however small, and there have been some," said Steven Rickard, director of Amnesty International's Washington office. "But bottom line, we don't think there's enough evidence that we think we can spot a trend. The situation is actually much closer to last year's language than any claim of a new day."

"They're going out of their way to send positive signals to the Chinese," said George Black, a China specialist with the Lawyers Committee for Human Rights. Last year, he said, the State Department was "crucified by that one line about how all dissent had been suppressed. Now they have a very judicious formulation that overall accentuates the positive a little too much, but in general I think is fair."

The human rights report, issued every year since 1978, is a detailed analysis of personal, political, religious and legal rights and workplace conditions in virtually every country.

Most of it is dryly factual, documenting a wide range of abuses in such countries as Sudan, Burma, Vietnam and Nigeria, as well as continued U.S. distress over reported discrimination against the Church of Scientology in Germany. The report is not designed to be a political document, but Shattuck and Deputy Secretary of State Strobe Talbott used its release yesterday to argue on behalf of the administration's policies not just toward China but toward Bosnia, Iraq and the Asian economic crisis.

Talbott said the sudden collapse of banks and industrial operations across Asia holds the potential for a popular backlash against the region's democratic trends of the past decade.

For that reason, he said, "We have strongly supported the efforts of the IMF to assist the troubled economies of Asia in regaining their equilibrium and implementing essential reforms that will promote greater transparency and openness." Many members of Congress have said they oppose further U.S. funding for IMF programs in Asia as an unwarranted taxpayer bailout of bad business practices.

On Iraq, where, according to the report, security forces maintain absolute control in an "environment of intimidation and fear," Talbott said that "regimes that rule by repression and violence at home are more likely to threaten their neighbors and world peace as a whole. [President] Saddam Hussein is exhibit A."

The Clinton administration has been sending strong signals that it is preparing for a major military attack against Iraq because of Saddam Hussein's defiance of U.N. Security Council resolutions.

In Bosnia, where the administration is asking Congress to fund an indefinite extension of the U.S. troop presence, "history will mark 1997 as the turning point toward peace and justice," Shattuck said. "Of course, much more needs to be done. And this is why our continued engagement is essential. Bosnia marks the most significant and the most difficult human rights progress of 1997."

He cited the growing number of accused war criminals taken into custody, the holding of nationwide elections and the increasing isolation of the Bosnian Serb leaders he described as "the Pale war criminals and hard-liners."

But the text of the report documents at least as many setbacks as accomplishments for the NATO-led effort to implement the Dayton peace accords. These include systematic abuses by the police forces of all factions, routine coercion of judges and widespread mob violence.