In Nancy Milton's near future, Washington has again become a genuine two-newspaper town. This is only one of several improbabilities that distract from her story but never really kill it. She serves up bureaucratic intrigue, historical speculation and frustrated love in such a rich mix that by the end we have, somewhat to our surprise, the first American thriller to deal satisfactorily with modern China.

Anne Campbell, Milton's heroine, is a tall, attractive, Chinese-speaking reporter for The Washington Inquirer. She is about 30, with a Stanford degree and a first-class education in the tools of her trade from an ex-husband who was the dean of Hong Kong China watchers. When The Inquirer's Peking correspondent is expelled for writing too much about Chinese human-rights abuses, Campbell is sent to replace him just as the Chinese and U.S governments are trying to forge a military alliance.

Milton herself spent five years teaching in Peking in the 1960s, including the worst years of the Cultural Revolution. She captures the drab colors and harsh accents of China, plus the aching frustration that often overtakes foreigners who spend any length of time there. And she is modest enough to keep the whole story within an outsider's narrow range of view. We see the inner workings of the U.S embassy in Peking and the backbiting among U.S. security advisers in Washington.

There are illuminating bits of the misunderstandings suffered by any journalist working 11,000 miles away from her editors (I particularly appreciated the moment Campbell discovers that her first big scoop has been reduced to a one-paragraph item in a news roundup). But we never see more of the inner workings of Chinese politics than a foreigner would see. The chief of the U.S. military mission confers in cryptic terms with his opposite Chinese number. Campbell meets in appropriately dingy settings with Chinese dissidents and would-be rebels in Peking and Henan. Whatever the Chinese may be saying to each other remains out of earshot, a wise, self-imposed restriction given the ludicrous results of previous efforts to portray these conversations in Western fiction.

Soon after her arrival, Campbell happens upon a small, violent demonstration in Tiananmen Square and is approached by a young female dissident interested in U.S. press coverage. They begin regular meetings, aided by a longtime American resident of Peking (an odd type Milton clearly knows a good deal about) who allows Campbell to suggest to others that they are having an affair so that her nocturnal absences from her Peking Hotel room are not questioned.

Milton brings the capitalist-tinged economic experiments of today's China, the China of Deng Xiaoping, to one logical conclusion: City workers are rebelling over new production quotas that keep them at the job longer with little improvement in living standards. Famine has hit several rural areas. The post-Mao policy of encouraging foreign investment and special privilege has led to widespread resentment both of foreign businessmen and the government that has been promoting them.

Workers' strikes, Soviet support for a minority rebellion in Pakistan and a Sino-American plot to manufacture an incident on the Sino-Soviet border all put Campbell in severe jeopardy, made all the more serious by her dissident contacts and her affair with a U.S. embassy officer. The violent climax provides a satisfying release for anyone who has tasted or guessed at the paranoiac quality of life in China, even if it takes a certain suspension of disbelief.

At one point in the novel a reporter described as "the dean of Far Eastern correspondents" delivers a little lecture: "The greatest stroke of historical luck we could have had was that the Chinese revolution turned itself inside-out and came over to us. We know what our job is as journalists. But as Americans, we're also responsible for supporting this alliance and seeing that nothing happens to it." At any Peking Hotel dining room chat I ever attended, such talk would have left us all choking in laughter on our breakfast toast.

The book rests on an admittedly dubious premise -- that the teeny, powerless Chinese dissident movement could in the foreseeable future mount a serious threat to the modern Chinese army and bureaucracy. But this notion is not any more improbable than the idea of the American government's being overthrown by some sort of Weather Underground, a prospect with which Richard Condon and a pack of others have been thrilling readers for years.