A typographical error in Murrey Marder's report on China in Sunday's Outlook section listed Taiwan's trade with the United States last year as $1.4 billion instead of the correct figure, $11.4 billion.

HIGH POLICY DECISIONS among nations are reflected most explicitly, although often distortedly, by tangible things: money, trade, political deals and, last ambiguously, by military hardware.

Almost the last thing that Secretary of State Alexander M. Haig Jr. is anxious to discuss in the Reagan administration's first plunge into triangular American-Chinese-Soviet strategy this weekend in Peking is the extremely prickly question of new American combat aircraft for Taiwan.This subject is loaded with volatile American political and commerical cross-interests, as well as the supreme sensitivities of Peking's political and military leadership.

What Haig wants to concentrate on are broad issues of geopolitical strategy. Nevertheless, Haig, it has been officially said, left for the Orient with "an open mind" on all U.S.-China issues. He is even prepared, it was added with deliberate imprecision, to engage in "a richer dialogue" with the People's Republic of China possibly supplying it with American military equipment.

Just a few hours before Haig's plane took off Wednesday night, a very senior Defense Department official, speaking under press "background" rules, went further than the Carter administration did in such forums on the subject of arms for the PRC. The unidentifiable official said the Reagan administration is prepared to consider any requests which China may submit for American weapons -- although no decision actually has been made to sell any to China and no overall policy toward China yet exists.

Sophisticated readers of military-diplomatic pronouncements would recognize that as a multipurpose declaration.

The Reagan administration undoubtedly wanted to indicate to China again, as Haig departed for Peking, that it does not deserve Peking's continuingly aired suspicions that the Reagan White House might sacrific America's China alignment to Reagan's preinaugural solicitude for the rival claimants to Chinese legitimacy on the island of Taiwan.

Furthermore, with Soviet pressure on Poland again growing, there presumably was another objective as well. The Reagan administration wants to underscore to the Kremlin, again, the consequences of using force to crush Poland's struggle for losser Communist rule. The last time around, Defense Secretary Caspar W. Weinberger publicly warned that if the Soviet Union invaded Poland, the United States might retaliate by opening its military arsenal to China. The administration's China specialists thought that was a faux pas of linkage that would be resented in Peking.The latest Pentagon reference to possible U.S. arms for China made no overt link to the Polish crisis, but the point will not be lost on those alert to nuance in the American-Chinese-Soviet triangle.

Despite the new hints about a possible outpouring of American arms to China, the Reagan administration currently is neither contemplating any wholesale shift in that direction, nor does it regard arms as China's main requirement. Instead, in interviews and background talks during the past five weeks senior officials have stressed that what China needs most urgently is "modernization of its industrial plant," not American weaponry. On that key point, China's present leaders appear to agree.

Although no official will say to publicly, there are other subjects of strategic interest which various American policymakers would like Haig to discuss in depth in Peking:

Item: How can the United States and the People's Republic of China improve their coordination of "parallel" policies to best thwart the projection of Soviet military power? Specifically, where can Washington and Peking make their policies dovetail at tolerable cost to "inflict pain" on the Soviet Union, and confound its exploitation of "targets of opportunity?"

Item: What can the PRC do, and with what measure of American technological assistance, to close the widening gap between its military forces (mired in the technology of the 1950s) and constantly-escalating Soviet military sophistication Is that possible in the reasonably near future if the United States would go all-out to supply dual-use (military-civilian) technology, but stop short of delivering lethal weapons? The Reagan administration already has agreed that Haig can express U.S. willingness to be more liberal in releasing this technology to China, but on a "case-by-case" basis.

Item: What can the United States and China do, in tandem, to intensify pressure on the Soviet Union in Afghanistan? On Soviet-aligned Vietnam in Cambodia? To block Soviet penetration of the Horn of Africa? To strength Pakistan? Thailand? To try to induce India to Curtail its Soviet ties? To encourage the expansion of Chinese-Japanese relations which serve American-Japanese-Chinese security interests? To broaden overlapping interests between China and the Association of Southeast Asian Nations (ASEAN) -- Indonesia, Malaysia, Thailand, Singapore and the Phillipines?

Item: In the churning Persian Gulf region, where China is not an active power factor, can the PRC help in any way to reduce the vulnerability of Western Europe and the United States to attack on their oil lifelines? Would China be prepared, for example, to permit the embroyonic American Rapid Deployment Force to overfly Chinese terriority or provide refueling facilities for U.S. warships or planes to reach the Persian Gulf in an emergency.

Item: At least some U.S. planners went a broader exchange of intelligence information with China. Officials refuse to discuss this highly classified subject with reporters on any basis, except to acknowledge that there is an exchange. After Iran's revolution cost American intelligence its monitoring stations near the Iranian-Soviet border which could detect Soviet missile launchings, China's Deng Xeaoping offered, a Senate delegation publicly reported, Chinese territory for American monitoring posts -- if they were manned by China. Soviet intelligence surely assumes, or knows, that it is improbable that the United States passed up that opportunity. U.S. officials decline to confirm or deny whether such monitoring stations exist in China.

The list goes on, girdling the globe.

Haig's chief interlocutor in China, Deng Xiaoping, whose nominal title of vice chiarman greatly understates his dominant power, by no means will be bored with these topics. Deng wants the United States and its allies to strengthen their capacties to "tie down" Soviet military power throughout the world, and especially where Soviet outreach rubs against China's security interests -- around the rim of Asia.

Deng can be even more passionate on Soviet dangers than Haig. Deng has said: "The next 10 next years are very, very dangerous. They are frightful," requiring new measurers and new policies to "postpone" what he still sees in the long-term as "inevitable" war between "the two superpowers." And by new policies, Deng and his colleagues do not mean, he repeatedly has emphasized, "the chatters about peace and 'detente.'"

To the strategists in the Kremlin, the mere fact that Haig and Deng are meeting in Peking is virtually automatic confirmation of the Soviet Union's deepest suspicions about the direction in which its two archrivals are headed, joined in "a dangerous partnership."

Soviet strategists, certain that they understand China better than naive Americans ever will, scoff at the notion that it was the United States that "played the China card." Instead, they maintain, Peking for a decade has been "playing the American card." and the PRC for a generation has been intent on luring the United States into a nurclear war with the Soviet Union, from which China, now with a billion people, would be the only conceivable survivor, even if it lost several million Chinese to nuclear fallout.

Deng, even at the age of 76, retains a zest for this kind of polemical and strategic struggle. Nevertheless, he has other high priorities on his own agenda, and his preoccupations and Haig's do not all match. They match least of all on the PRC's fixation, apprehension and suspicion about what the Reagan administration intends to do about salvaging any of the president's campaign commitments do the Nationalist Chinese regime on Taiwan, the heirs of the late Generalissimo Chiang Kai-shek and his Kuomintang Party who lost the civil war on the mainland of China in 1949.

President Reagan, before taking office, backed away from his campaign pledges to restore "official" relations with Taiwan, severed in January 1979, when the United States fully normalized its diplomatic relations with the PRC. Nevertheless, Deng has told every prominent American who has talked with him in recent months, including former President Ford, that the Taiwan issue is continuingly explosive in China, specifically for his pragmatic leadership and for its policy of greatly expanding American-Chineese relations.

Publicly, China adamantly opposes any supply of American weapons to Taiwan. In private, Deng has said that what China cannot swallow at all is any upgrading of the level of American arms shipments to Taiwan, especially during the next year to 18 months.

Deng has not spelled out, even in private, precisely what the consequences would be if the Reagan administration decides otherwise. But he has broadly implied to some visitors that the toll would be taken in China's power structure, in its domestic policies and in its basic international alignment with the United States. China's government-controlled press has gone further than that in some respects: It has said that the whole pattern of U.S.-Chinese coordination to checkmate the Soviet Union would unravel.

The most recent prominent American who talked with Deng in Peking was the Carter administration's assistant secretary of state for East Asian and Pacific affairs, Richard Holbrooke. A major player in the 1979 full-normalization of U.S.-China relations, he has spent more time with Deng in recent years than any other senior official, and was in Peking last month. Holbrooke on Wednesday told the House Foreign Affairs subcommittee on that region, headed by Rep. Stephen Solarz (D-N.Y.):

"This is a testing time in U.S.-Chinese relations, and in the eyes of China, the issue is Taiwan." And in that complex, "the most critical issue" is "arms sales."

For the United States, Holbrooke said, the underlying question is "very simple: Are the Chinese bluffing? . . . Everyone has to make his own decision. I do not believe they are bluffing."

That is a paramount question among administration policymakers. China apparently is not completely bluffing. Last year, when the Netherlands decided to sell two submarines to Taiwan, the PRC retaliated by cutting back its relations with the Dutch.

U.S. specialists on China say there is no doubt that Deng has made many domestic political and military enemies in his long career.His opponents have been outmaneuvered, but they have by no means succumbed. A strikingly bold challenge appeared as recently as April 30 in China's central newspaper, Renmen Ribao (People's Daily), employing the most thinly veiled allegorical formula to assault Deng's pro-Western alignment. In the 19th century Ching dynasty, the newspaper's millions of readers were told, "bureaucrats fo the westernization group" then in control of China "procured arms and ammunition from foreign countries, established and trained the 'new army,' and constructed some modern armories, arsenals and shipyards."

With this foreign technology, the indictment continued, China's rulers "colluded with the French and American rifle detachement and carried out blood suppressions of the Taiping Heavenly Kingdom and the Nian army," thereby: strengthening "the feudal Ching dynasty"; lining their own pockets with "riches"; "stimulating the development of Chinese capitalism" and "betraying the interests of the country and the poeple." Ergo, the article concluded, resurrecting a moral that recurs in Chinese history: "Westernization means dealing with barbarians."

With military modernization for China actually given the lowest national priority on Deng Xiaoping's domestic agenda, it must be recognized, Holbrooke and three other witnesses told Congress last Wednesday, that any supply of new American weapons to Taiwan is a potent weapon in the hands of Deng's adversaries. And the most sensitive of all the arms issues, the four specialist witnesses agreed, is supplying a "new generation" of American jet fighters to Taiwan, known as the FX (foreign export) aircraft.

"It is hardly any secret," Holbrooke said, "that it has been under consideration for some time" for the United States to arrange a weapons tradeoff on arms for both Taiwan and China. That is, to try to soften the repercussions in China that would come from supplying the new FX plane or other weapons to Taiwan, by selling China some American weapons which it wants. This is "having your Taiwan cake and keeping your PRC relationship at the same time," Holbrooke said, and China is bound to reject it.

Both symbolically and physically, Rep. Solarz said in an interview, "the big decision is what happens on the FX aircraft for Taiwan." A "kind of struggle for the soul of the Republican Party" is underway over the shape of the Reagan administration's China policy, Solarz said, "to the extent that Reagan feels he has to pacify his right-wing supporters who could legitimately ask why he has not fulfilled his promises on Taiwan."

American policy toward China, Solarz said, is of such large global significance that it cries out for "genuine bipartisanship" in formulating that policy, to which his subcommittee is prepared to contribute.

"We are schizophrenic on China policy," one administration China specialist said, adding wryly: "We want a China strong enough to fight the Russians, but not strong enough to fight Taiwan."

Senior officials acknowledge a continuing tug of interests in Republican ranks. But they say there should be no question where the administration's center of gravity rests: expanding the China relationship constructed under three presidents -- Nixon, Ford, Carter. But the Reagan administration also stands pledged to end the "humiliation" which the president has said Taiwan experienced under the Carter administration. And the administration has recently reaffirmed its determination to fulfill what existing legislation clearly authroizes, the continued sale of "devensive" weapons to Taiwan.

It was inevitable, therefore, that the Haig talks in Peking this weekend would be labeled "exploratory." That terminology is often used to conceal decisions already reached. But in this case the Haig-Deng discussions are really cross-probes, because each side is genuinely unsure where the other is headed despite their "parallel" anti-Soviet objectives.

At the professional level inside the Reagan administration, specialists say there is a clear and logical answer to the China-Taiwan arms sales dilemma, especially on the controversial FX plane.

The military rationale for a new-generation jet fighter for Taiwan, experts say, was the belief that China in the early 1980s would have a new threat to Taiwan's air defense: a china-built advanced new fighter variously known as the Hsian-A, or the F8. The first of these planes were expected to be powered by 50 supersonic Spey jet entinges produced by Rolls Royce, and obtained from Britian after lengthy negotiations which began in 1972. The PRC then planned to build its own licensed Spey engines at a plant to be constructed near Sian with foreign technical assistance.

But that whole project, and dozens of other multi-billion-dollar investments originally planned by the PRC in the exuberant flush of its post-Mao turn to progmatism and Western techology, has been stalled in China's subsequent major retrenchment and staggering economic burdens. As a result, U.S. specialists say, the urgent military rationale for a new FX plane for Taiwan has disappeared.

Furthermore, the least provocative potential new jet fighter for Taiwan does not yet exist, is not scheduled for its first test flight until September 1982, and the first combat-capable plane will not be ready for delievery until July 1983. It is Northrop Corporation's F5G Tigershark, the newest addition ot the F5 system for which there is a coproduction line in Taiwan turning out earlier models of Northrop's design. Therefore, U.S. planners maintain, there is no need at all to rush into a decision on a new aircraft for Taiwan.

The competing aircraft for the new worldwide FX market estimated at $6 billion to $10 billion, however, already exists, and has flown more than a hundred test flights. It is the giant General Dynamics conglomerate's F16/79 supersonic jet, a lower-powered model of the high performance F16 fighter-bomber which Israel has just used to wreck Iraq's neclear reactor. The Carter administration twice rejected Taiwan's attempt to purchase F16s.In its modified version, the F16/79 is essentially the same plane with a lower-thrust engine, General Electric's J79 tubojet. Buying the F16/79 with the hope of later replacing it with the more powerful originial engine is an obvious temptation for some prospective purchasers.

Retired Adm. Noel Gayler, former U.S. commander-in-chief for the Pacific, and earlier director of the National Security Agency, told Congress last week that Taiwan has no urgent military need for any new FX plane. "The current F5 fighters -- are still formidable," he said, and "I would not give high priority to a replacement at this time." Gayler said, "There is no evidence that the PRC plans any military attack on Taiwan, nor has there been for some years. All the political imperatives of the PRC run the other way." The outlook conceivably could be altered, however, Gayler said, if there should be "a change of leadership" in Peking which switched to a more militant policy toward Taiwan.

That is the crux of the interwoven factors in the new-arms-for-Taiwan complex. It is essentially a political and psychological decision, and Reagan administration officials have stressed that current law calls on the United States -- not Taiwan -- to decide what is required for Taiwan's defense that justifies selling weapons to it.

Asssitant Secretary of State John H. Holdridge, Holbrooke's successor for East Asian and Pacific affairs, aggravated Sen. Jesse A. Helms (R-N.C.) and other champions of Taiwan's interests during Holdridge's long-delayed confirmation by stating that: "The primary consideration [for selling Tawian a new FX plane] will be whether these aircraft are required to meet a likely threat in the 1980s from equally advanced aircraft, or whether their sale would tend to stimulate the development of advanced aircraft by the PRC as a response." Many other adminsitration officials take the same position.

On all sides of this subject there are high and low political and psychological counterweights, and senitive symbolism. Every move is scrutinized in Tawian, in China and in Washingtion. On President Reagan's first night out on the town after the attempt to assassinate him, he went to a private dinner at the George Town Club for old California friends.The host? Tom V. Jones, chief executive officer of the Northrop Corp. Reagan's presence at the widely publicized dinner of course was by no means intended to signify anything about impending decisions on China Policy, or any other subject. But it also obviously did not pass unnoticed by Northrop's FX competitor, General Dynamics, whose interests are never idly dismissed by texas's influential congressional delegation.

Inside Republican ranks, therefore, multiple strands of interest and ideological perference are competing for primacy. On June 4, Secretary of Commerce Malcolm Baldrige told the National Council for U.S.-China Trade here, with members of the PRC embassy in the audience, that the long-run outlook for expanding trade with China is bright, despite China's recent drastic cutbacks in spending.

"The president has stressed his intention to deepen cooperation with Peking," Baldrige said. In 1980, he said, "total two-way trade with China, which had doubled between 1978 and 1979, more than doubled again to reach $4,8 billion." Baldrige said the Chinese "now buy two-thirds of all our polyurethane exports, one out of every seven bales of cotton . . . [making China] our third largest agricultural export market." While "billions of dollars' worth of business have been lost" in cancelled or postponed contracts as a result of the PRC's economic retrenchment. Baldrige said, most contracts cancelled or postpone "were Japanese or German, not American." The Reagan administration, he said, "would be the last to take issue" with the PRC's retreat to "pay-as-it-goes" government.

In the future, Baldrige said, "we are especially hopeful the U.S. oil companies will be able to join in the search for oil in China's offshore waters." That happens to be a subject which particuarly interest Vice President George Bush, a former Texas oilman, who brought to the National Security Council staff as senior adviser on China and the surrounding Asian region James R. Lilley. He was the publicly known CIA station chief in Peking when Bush served there as head of what was then the U.S. Liaison Office. Lilley is an enthusiast for multiple-nation development of China's offshore oil deposits in a grouping which he told the Senate Energy Committee last June "should encompass Taiwan," preferably in "commercial and security arrangements" that could transcend the enmity between Tawian and Peking. U.S. "military sales or related military sales to China and Taiwan," Lilley urged, "should be considered in the context of this strategic framework."

To many other China specialists in the bureaucracy, that is a far-out prospect at best. Since its great shock over losing official American diplomatic recognition, Taiwan has been flourishing economically. It trade with the United States is more than double that of the PRC, rising to $1.4 billion last year, even though its population is less than 18 million compared to China's nearly 1 billion people.

To those political pragmatists who exist near the top of the Reagan administration, the practical requirements of survival and self-interest that operate on Peking, on Taiwan and on Washington will prevail over tortuous disputes about such issues as arms supplies, if the United States picks a wary path through the obstacle course. Veteran political survivor Frank C. Carlucci III, now deputy secretary of defense, said in the course of an interview for this report:

"I think it's going to take a good deal of feeling our way, and I'm very please that Al [Haig] is going out there. I think it should be an effort to find out what they [China's leaders] want. Clearly the most important thing we can do for them is help them in their [industrial] modernization. And frankly I think they are less interested in sophisticated weapons than they are in equipment to build their industrial plant."