Vice President Mondale, in the first speech ever by an American political figure to the Chinese people, said today, "Any nation which seeks to weaken or isolate you" runs "counter to American interests."

In his Peking University speech the vice president announced a new agreement for U.S. experts to help with several massive Chinese dam projects. Administration officials said that to allow the effort China had been designated a friendly nation under the Foreign Assistance Act, the only communist nation other than Yugoslavia to be so designated.

"The fundamental challenges we face are to build concrete political ties in the context of mutual security, to establish broad cultural relations in a framework of genuine equality and to forge practical economic bonds with the goal of common benefit," Mondale said.

In what he called a message "on behalf of President Carter," Mondale touched on human rights, still a controversial topic here, but he only described American beliefs and did not mention China.

"We cherish our fundamental beliefs in human rights and compassion, and social justice," he said. "We believe that our democratic system institutionalizes those values. The opportunities available in our citizens are incomparable. Our debates are vigorous and open. And the differences we air among ourselves -- whether on strategic nuclear policy or on energy or whatever -- are signs of our society's enduring strength."

Mondale's speech was broadcast later tonight on national television, extending to most large cities where China's 1 million to 2 million television sets are located. Chinese officials said it also was broadcast on radio, which reaches rural areas where 80 percent of the nearly 1 billion Chinese live.

The 900 teachers and students, including a few Americans, from Peking and other nearby universities listened without apparent reaction as Chen Hui, chief of the Chinese Foreign Ministry's English translation section, faithfully translated Mondale's remarks.

A few hundred young Chinese had held a meeting the night before in front of the wallposter-filled Democracy Wall downtown to discuss the need for trials for jailed dissidents, but there were no wallposters today on the suburban university campus, full of trees and blossoming red tulips.

The cramped assembly hall on an upper floor of the university administration building grew uncomfortably hot as the speech and translation lasted about an hour. Mondale was applauded warmly at the beginning and end of the speech, but was interrupted only twice for applause -- when he said at the beginning that "The ancient hunger for community . . . urges us again to find a common ground" and when he asked Harvard Prof. John K. Fairbank, the dean of U.S. China experts and a former student at the Peking campus, to stand and be acknowledged.

"Despite the sometimes profound differences between our two systems, we are committed to joining with you to advance our many parallel and bilateral interests," Mondale said. "Thus any nation which seeks to weaken or isolate you in world affairs assumes a stance counter to American interests."

"I thought it was a very good speech," said Wu Ping, 31, a researcher at the university. "It means we can really move forward together."

Fairbank, who applauded back in Chinese style when he stood to acknowledge the audience's tribute, came here in the early 1930s after graduation from Harvard and some time studying in England. He studied Chinese and began research into Ching Dynasty documents. Later he returned to Harvard and trained a whole generation of specialists on China.

Mondale praised the university as the starting point for many 20th century Chinese movements for social modernization and resistance to Japanese and European imperialism. Although Mondale did not mention it, the late Chairman Mao Tse-tung worked in the university library in 1918 and 1919 and met important radical thinkers there.

Mondale told the audience: "Efforts in the 1920s and 1930s to keep China weak destabilized the entire world. For many years, China was a flash point of great-power competition. But a confident China can contribute to the maintenance of peace in the region. Today, the unprecedented and friendly relations among China, Japan and the United States bring international stability to Northeast Asia.

American historian Steve MacKinnon, now teaching and doing research here, said he thought Mondale made an odd choice in finishing his speech with a quote from President Theodore Roosevelt: "We heartily hope for the progress of China. And so far as by peaceful and legitimate means we are able, we will do our part toward furthering that progress."

"Roosevelt was trying to prop up the Ching Dynasty," MacKinnon said, referring to the last imperial dynasty, which crumbled in 1911. "He was helping E. H. Harriman, who wanted to build a railroad in China.

Mondale aides said engineers and dam experts from four U.S. government agencies were now ready to help the Chinese dam projects, under an agreement in which they would be reimbursed by Peking. The amount of money paid for their services could run into the tens of millions of dollars, one aide said.

Mondale also announced in his speech that Washington was prepared to extend up to $2 billion in Export-Import Bank credits to the Chinese over five years and perhaps more if needed. He said the administration would offer legislation allowing nationalization insurance for U.S. businesses in China and repeated the U.S. pledge to seek trade benefits for China from Congress before the end of the year, despite Chinese wishes that it be done sooner.