By Steven Mufson
Washington Post Foreign Service
Thursday, June 4, 1998; Page A25

BEIJING, June 3—One evening about two weeks ago, the wife and mother of imprisoned dissident Liu Nianchun sat down outside the Great Hall of the People to protest conditions at his labor camp and the lack of medical care for him. After an hour, the women were removed by police, questioned and returned home.

Nine years ago, the scene in front of the Great Hall and across the street in Tiananmen Square was radically different. Hundreds of thousands of people took part in student-led democracy demonstrations that shook the Chinese government before an army crackdown on June 4, 1989, took the lives of hundreds of people. On the anniversary of that crackdown, the ruling Chinese Communist Party is braced, as it has been every year at this time, to block any repetition of 1989. Tonight, the square was quiet, as large numbers of policemen in rain slickers patrolled the area on foot and in vans.

Yet the government's moderate handling of the two women's protest underscores how much less anxious -- and more sophisticated -- it seems compared to earlier years. The government has scheduled a soccer match Thursday against a team from arch-rival South Korea. Other activities, including the All China Big Red Hawk Young Singers Competition and a televised National Basketball Association championship game beamed from the United States also will vie for public attention on the nation's most politically sensitive anniversary.

"They are dividing people's attention," said a former Tiananmen Square student leader. "The kind of people who like sports are very active; people who are interested in politics are also very active. I'm planning to watch [the game], and I'm one of the people most interested in June 4. I think it's symbolic of the current leadership."

Many Beijing intellectuals agree that despite the tight security in Tiananmen Square, the political atmosphere in China is more relaxed than it has been since the crackdown. Newspapers and journals are publishing articles about the need for political reform. Human rights speakers appear on college campuses. A Beijing University student has even taken some underground essays he had shared with friends and published them in a book called "Desk Drawer Letters." Moreover, an increasing number of Chinese are becoming more aware of their rights as citizens and are turning to the courts to protect them.

The two images of China today -- Liu's harsh labor camp internment versus a generally more liberal political atmosphere -- pose a problem for U.S. policymakers as they prepare for President Clinton's visit here, the first by an American president since the 1989 Tiananmen crackdown. Which is the real face of China? And if both are real, how should the United States deal with them?

In three weeks, at an official welcoming reception staged by his Chinese hosts, Clinton will stand in the same place that Liu's wife and mother sat, in plain view of highly symbolic Tiananmen Square and the enigmatic portrait of Chairman Mao Zedong that hangs over the maroon-colored gate of the ancient imperial palace grounds.

Should the United States keep applying pressure on the Chinese government and link trade or access to advanced U.S. technology to a more liberal Chinese approach to human rights? Or should the United States cultivate even broader engagement and nurture the few liberal seeds here by promoting the rule of law and freedom of the press?

"It's time to treat this country in a more nuanced way, to acknowledge that change is occurring here, though it is occurring in some very odd ways," said Michael Posner, executive director of the New York-based Lawyers Committee for Human Rights. He believes the United States should "target support for people and institutions within China who are working to promote internal reform and greater compliance with international legal standards."

The administration needs little persuading. This year, it dropped its support for a U.N. Human Rights Commission resolution condemning China. Instead, the State Department has worked closely with Yale Law School professor Paul Gerwitz to promote legal exchanges that could train Chinese judges, who are mostly retired military officers without any legal background.

Although many Chinese exiles, human rights groups and lawmakers disapprove of the administration's warmer stance toward Beijing, many liberal intellectuals inside China -- as well as government officials -- welcome the increased contacts with the United States and the reduction of bilateral tensions.

"Recently, the atmosphere here has relaxed," says Wang Ruoshui, a former deputy editor of the official People's Daily, who was expelled from the Communist Party in 1987 because of his moderate writings. Wang had been unable to publish his political views in China after the 1989 crackdown until recently, when two of his articles were accepted for publication.

"If the U.S. government strongly attacks China's government, then leftists here would react and launch an anti-American attitude, and they would win. Then the Chinese human rights situation would be worse," Wang said.

One indication of the changed atmosphere is a growing willingness of the government to allow a reexamination of China's recent history -- an attitude that has important policy implications. One of Wang's articles, for example, exposes the tense relationship between Communist Party Chairman Mao and Premier Zhou Enlai in 1972, then regarded as close colleagues. It is, Wang says, part of the "de-Maoization" of Chinese politics.

There is, however, one chapter of recent history that the ruling party remains unwilling to reopen -- the June 4 incident. Asked at a news conference about the crackdown, Premier Zhu Rongji said that the army acted correctly and the party remains unified in its view of the measures.

Yet the party's characterization of the Tiananmen demonstrations has changed from a "counterrevolutionary riot," to an "incident" to the current usage of a very mild version of the word "disturbance." In addition to changes in vocabulary, other fundamental changes in the relationship between Chinese citizens, the Communist Party and the government since 1989 have also affected human rights in a broad sense.

In the daily lives of individual Chinese, the government is less and less intrusive. New economic initiatives -- the promotion of private housing and the private business sector -- will further reduce the leverage the Communist Party has on people's lives. That leverage was once exercised largely through people's work units, but at least 25 percent of the economy is now in private hands.

Now that individuals possess property and savings, Chinese are eager to protect their hard-earned gains. Consumers demand consumer rights, and are suing stores and seeking refunds. Workers demand labor rights, frequently taking their case to mediation. Everyone is trying to protect his own economic interests, which some scholars predict will give rise to a demand for political rights among different interest groups.

Nonetheless, China has not yet turned irrevocably toward a liberal political approach. It maintains a massive state security apparatus, which monitors the private affairs of anyone it deems a threat to the Communist Party's monopoly on political power. The jails hold more than 2,000 political prisoners, including 150 or so arrested after the Tiananmen Square protests. Among the 200,000 other people in labor camps, at least some are political offenders.

Early this evening at the Beijing University bulletin board, which was a center of protest information in 1989, a woman read announcements of lectures on the environment and the Asian financial crisis. "Many of my friends think those students were foolish," she said. "I think they were very brave. I wish more people now had that much passion. Some people now have the same passion, but they know not to express it the same way."

Special correspondent Michael Laris contributed to this report.