By Steven Mufson and Paul Blustein
Washington Post Staff Writers
Friday, April 9, 1999; Page A01

A summit meeting between President Clinton and Chinese Premier Zhu Rongji ended yesterday without an agreement for U.S. support for Chinese entry into the World Trade Organization and Zhu pointedly blamed the failure on the "political atmosphere" in Washington.

Zhu and Clinton said they were committed to working out a final agreement on China's entry to the WTO, important to China's stature in the international arena and to American companies seeking greater access to the Chinese market, by the end of the year.

But Zhu's visit and the two leaders' lengthy news conference yesterday made clear that U.S.-China relations, which appeared to be on a path to improvement a year ago, are mired in a series of controversies over spying, human rights, Taiwan and allegations that China tried to influence U.S. elections through improper campaign contributions.

Zhu denied during the sometimes awkward 95-minute news conference that he had any knowledge that China had stolen nuclear weapons secrets from the United States, and said that Americans should not underestimate Chinese scientists. He joked that maybe China should paint on the sides of its missiles "made in China, not in the USA" to clear up any misunderstanding.

The Chinese premier also rejected allegations that the Chinese government had sought to improperly channel money to the Clinton-Gore campaign through a variety of conduits. "I have $140 billion in my pocket," he said, referring to China's huge foreign exchange reserves. He said if he wanted to influence American elections he'd spend $10 billion, not $300,000. The smaller amount is the amount former Democratic fund-raiser Johnny Chung has allegedly told Justice Department investigators he received in 1996 from the chief of China's military intelligence to give to the Clinton-Gore campaign.

In the face of criticism from human rights groups, members of Congress and Republican presidential hopefuls, Clinton for the second day in a row defended his administration's policy of engagement with China. "A policy of confrontation for confrontation's sake . . . will accomplish nothing but the fulfillment of the bleakest prophecies held by people in both the United States and China," he said.

Clinton said that he had asked Zhu to cooperate with American investigations of both espionage and campaign finance improprieties. Zhu said that if the Clinton administration presented evidence of wrongdoing, the Chinese government would cooperate.

Asked whether China had human rights problems that needed to be corrected, Zhu said, "I concede that there is room for improvement in human rights conditions in China." But he also repeated Chinese defenses of communism and condemned U.S. sponsorship of a resolution critical of China at the Geneva-based United Nations Commission for Human Rights.

One particularly sensitive human rights issue between the United States and China, over Beijing's harsh rule of Tibet, threatened to disrupt a major speech Zhu is scheduled to deliver tonight at the Willard Hotel. Chinese officials yesterday were pressuring U.S. organizers to bar exiled Tibetan leader Dalai Lama's Washington representative, Lodi Gyari, from attending the event.

The only progress to come out of Zhu's visit was on the trade front. The administration released a list of pledges by Beijing to open the Chinese market to foreign products, including sharp tariff cuts, the removal of barriers to U.S. citrus and wheat exports, new openings for American insurance companies and the dismantling of the state-run trading and distribution companies foreign firms are forced to use.

"We made significant progress toward bringing China into the World Trade Organization on fair commercial terms, although we are not quite there yet," Clinton said. Zhu called the gaps "very small."

"Maybe Mr. President does not quite agree with me -- their side still believes that the gap is significant," Zhu added. "So that's why at present we are only in the position to sign a joint statement instead of a full package agreement."

U.S. negotiators said that China had agreed that once admitted to the WTO, it would cut tariffs to 17 percent on agricultural products. Beef tariffs would drop from 45 percent to 12 percent, for example.

China also agreed to import beef, pork and poultry that meets USDA inspection. Sanitary concerns have been used to block U.S. agricultural exports to China. Negotiators estimated that U.S. exports of oranges and other citrus fruits would reach $1.2 billion in a year, up by $700 million over the current level. China also lifted limits on imports of wheat from the Pacific Northwest.

Tariffs on industrial products will be cut from an average of 24.6 percent in 1997 to 9.44 percent phased in by 2005. For automobiles, for example, that would mean tariffs ranging from 80 percent to 100 percent currently would drop to 25 percent by 2005. Import quotas will be phased out.

"It's a question of when, not whether, a deal will be concluded," said Calman Cohen, executive director of the Emergency Committee on American Trade, a business lobbying group that strongly favors trade ties with China.