AS CHINA and the United States reached an agreement yesterday permitting China's entry into the World Trade Organization, an article appeared in this newspaper about an honest Chinese businessman named Hu Dan. Mr. Hu was appointed to rescue one of China's many failing state-owned businesses. Its problems, he discovered, stemmed from crooked factory and Communist Party officials. "The level of corruption is enough to make your hair stand on end," he wrote. For trying to clean up the enterprise, Mr. Hu was kidnapped by government prosecutors from another province, The Post's John Pomfret reports. He was socked with a $480,000 court judgment. He was hounded, threatened and finally, on Aug. 30, stabbed to death in his apartment.

Now comes the Clinton administration touting its long-sought trade agreement with China. "This agreement will strengthen the rule of law in China," says U.S. Trade Representative Charlene Barshefsky; that's "the most important aspect of this agreement," she says. White House economic adviser Gene Sperling agrees: "This is bigger than a trade agreement," he says. It's about China becoming part of "a truly open, free-flowing, international economy that we believe will lead to greater freedom and greater global prosperity."

Martin Lee, longtime democratic activist in Hong Kong, shares the administration's optimism. As China undertakes to respect the rule of law in international trade, it will "help build acceptance domestically of the importance of equal rights under law," Mr. Lee wrote in a letter to President Clinton. Membership in the WTO will bolster proponents of economic reform inside China, Mr. Lee believes. And reformers inside China, whose views also merit great deference, are cheered by yesterday's accord. They believe it will promote competition and decentralization.

But China has frequently flouted the international agreements it has signed. Just compare its commitment to honor the United Nations treaty on political and civil rights with its actual persecution of peaceful religious and political dissenters. If it now fails to live up to its open-trade promises, while the United States plays by the rules, the trading relationship will become even more unequal than it now is.

That's one danger. The other, perhaps more troubling, is that China will work to reshape the WTO away from the kind of open, rules-based organization whose influence the administration hopes will be so benign. The WTO is in its infancy, and much of its authority -- with respect to antitrust law, labor and environmental regulations and more -- is still unclear. China, with its 1.3 billion people, will now have a large say; and with its corrupt system of Party rule, its interests and America's will not be the same.

Congress has no power to admit or bar China from the WTO; it can only deny bilateral trade benefits in a way that would most likely be self-defeating. Perhaps the most that can be expected now is realism about the prospects of "rule of law" in China, and vigilance as to whether China honors its promises. That vigilance will have to come from outside China. The press in Xian, where Mr. Hu worked, has yet to report his murder.