High officials of the Carter administration yesterday described normalization of U.S.-China relations as an effort to create more stable relations among the major powers with interests in Asia, without threatening either the Soviet Union or Taiwan.

Speaking to an overflow crowd of nearly 800 business and civic leaders at the State Department, Secretary of State Cyrus R. Vance, presidential assistant Zbigniew Brzezinski and several other high officials sought to enlist political support for the new China policies and allay opposition at home and abroad.

Vance used the occasion to unveil officially the "American Institute in Taiwan," a non-governmental corporation that is to be established to carry on trade ties, arms sales and other relations with the island bastion on an unofficial basis.

"We expect Taiwan to continue to prosper" under the new arrangements, Vance declared. State Department officials said the institute will be created by a legal filing as a District of Columbia corporation today, and by legislation sent to Congress within the week to provide it with the funds that would have been spent by the U.S. embassy in Taipei.

Taiwan is resisting the changeover to unofficial relations and demanding that "government-to-government" ties of some sort be maintained. Vance asked the business leaders,who are from firms interested in trade with the mainland or Taiwan, to give "active support" on Capitol Hill to the plan to channel relations through the American Institute.

Vance's speech was centered on U.S.-China relations and the continuing unofficial relationship with Taiwan. Brzezinski took a broader geopolitical view, and was sharply critical of a Washington prenormalization policy that sought to isolate the mainland at the expense of U.S. participation in two Asian wars.

Vance, Brzezinski and Assistant Secretary of State Richard Holbrooke, in nearly the same words, all pointed out that the United States retains major military forces in Asia and is prepared to act, as required, to protect its interests. According to State Department sources, this was intended to assure Taiwan and its supporters and U.S. investors there that the United States woudl act in accordance with its constitutional processes to protect Taiwan if China threatened to use force against it, even after the U.S.-Republic of China Security Treaty has been abrogated.

Out of deference to Peking, which considers Taiwan one of its provinces and Taiwan's future an internal matter, the statements about protecting U.S. interests did not explicitly mention Taiwan or say precisely what the United States would do in case of a threat to the island.

Holbrooke answered in general terms a request for specific assurances by Anna Chennault, a prominent friend of Taiwan. His reply evoked a murmur in the audience and some of the business leaders groaned.

Vance declared that China's action and statements of the past month make clear that normalization of relations has "enhanced the possibilities that whatever the ultimate resolution of the (Taiwan) issue may be, it will be pursued by peaceful means." He said Chinese leaders have adopted a "markedly more moderate tone" on the issue since mid-December.

Vance said the administration considered the peaceful settlement of the Taiwan issue "of critical importance." He said normalization would not have been possible if Peking had continued to talk and think about the Taiwan issue in "inflammatory" terms.

Both Vance and Brzezinski went out of their way to assure the Soviet Union that the new ties with China are not directed against Moscow.

"We believe that China has an important role to play in the search for global peace and stability. The same is true for the Soviet Union. Our national interests are best served when we seek to improve relations with both nations while protecting our vital strategic interests," Vance said.

Brzezinski said normalization of relations with China was not undertaken for "tactical or expedient considerations." He said the United States was seeking to create a "framework for cooperation" which includes western Europe, Japan and regional powers as well as China.

He added an invitation to the Soviet Union to join the framework. Then, in a challenge reminiscent of President Carter's Annapolis speech last June, Brzezinski said the Soviets face a fundamental choice: "whether to become a responsible partner in the creation of a global system of genuinely independent states or whether to exclude itself from global trends and derive its security exclusively from its military might and its domination of a few clients."

Vance and Brzezinski sent speech drafts to one another before the two documents reached their final stage, according to a Brzezinski aide. Carter personally approved both texts.

A remarkable fact of the business conference was that it brought together members of two separate national business councils, organized to encourage trade with China and Taiwan, respectively. Attendance from both groups was high.

"We encourage you to develop greater trade and contact with both the People's Republic of China and the people on Taiwan," Vance declared. This message was echoed by two other Cabinet members, Secretary of the Treasury W. Michael Blumenthal and Secretary of Commerce Juanita M. Kreps.