The busy, dusty street outside the Soviet Embassy here, officially labeled Anti-revisionist Street for 14 years as a sign of Chinese contempt for Moscow, has quietly been changed back to its old Chinese name.

A chinese magazine has described the Soviet Union as a still "basically socialist" country. Peking and Moscow have made progress in another session of talks over navigation of riverways along their border.

Yet, the Chinese have turned away empty-handed a high-ranking Soviet diplomat who recently visited to try to resume talks on normalizing relations. The Chinese have enthusiastically supported the boycott of the Moscow Olympics and now are broadcasting dark predictions of a Soviet attempt to take over Iran.

To outsiders, China's dealings with its most hated and most important adversary may seem utterly confused. But to the Chinese, according to interviews with Peking offcials and foreign diplomats here, this new surge of contradictory dealings with the Russians will only tidy up years of ideological debris obscuring the still hard core of Chinese distrust and fear of the Soviets.

In their way, the Chinese appear to be responding to the intentional contradictions of Soviet policy toward Peking over the last two decades. Soviet expert Harry Gelman recently described Moscow's "unrelenting competitive pressure" combined with "the unabashed effort to improve selected aspects of bilateral dealings" with China. While pursuing their new round of normalization talks with China at the beginning of the year, the Soviets also proceeded to confirm the worst Chinese predictions of their "expansionist" behavior by invading Afghanistan. While sending their principal expert on Far East relations, Mihail Kapitza, to Peking to see if the ruptured talks could be resumed, the Russians continued to broadcast Chinese language attacks on the Peking leadership that purported to be from a clandestine dissident radio station in China.

In response, the Chinese on the one hand pursue their efforts to gradually dismantle the anti-Soviet ideology expounded by the late Communist Party chairman Mao Tse-tung, while on the other warmly receiving Italian Communist Party General Secretary Enrico Berlinguer, a bur rin Moscow's side whose presence in Peking coudlonly increase Soviet anger.

Hu Yaobang, the new general secretary of the Chinese Communist Party, used the beginning of Berlinguer's visit here to lambast the Soviets publicly for "bullying" other Communist parties and to report "no possibility" of friendly talks between the Chinese and Soviet Communist Parties.

Hu, a fast-rising star at the head of a new generation of Chinese leaders, was making his first major public foray into international affairs, underlining the importance of Peking's anti-Soviet sentiments.

Chinese officials acknowledge that garrisoning their northern border is a severe drain on the economy and that reaching more normal relations with Moscow would be desirable. Their occasional conciliatory gestures also seem to arise from the fact that, in the eyes of other communist nations, "China does not want to appear to be the intransigent party," one diplomat here said.

Diplomats here recently said Peking had maintained this faintly conciliatory pose by appointing a new ambassador to Moscow, Yang Shouzheng, formerly ambassador to Mozambique. It was not clear if the previous ambassador, Wang Youping, who headed the Chinese side in the normalization talks, would continue in that role, but diplomats here saw the appointment as a friendly gesture.

An official newspaper in Shanghai, Wenhui Bao, has also made a rather unusual comparison of the personality cults of Joseph Stalin and Mao Tsetung, saying that "both the Soviet Union and China" have suffered "the exaggeration of personal roles and even the deification of leaders." The comment is in line with the general Chinese effort since Mao's death to recognize that it is now using many of the material incentives and elite education methods it once denounced as Soviet revisionism.

The Chinese official media appear not to have referred to the Soviets as revisionists for more than a year.

But as Gelman, a leading U.S. Central Intelligence Agency analyst, points out, the Sino-Soviet ideological dispute that seemed to set off the deterioration in relations 20 years ago has been for some time "by far the least important" irritant.

In Gelman's view, shared by most diplomats and Chinese here, Peking will discontinue to keep Moscow at arm's length because it remembers a variety of past Soviet injuries, such as the withdrawal of all Soviet technicians in the 1960s, and because the Chinese see a continued Soviet effort to use every available political and to some extent military means to weaken Chinese influence abroad.

When Soviet troops moved into Afghanistan, the Chinese were quick to point out how worthless this made any friendly agreements between Moscow and other socialist nations. The Soviets, as they have in the past, still had the nerve to send their number two negotiatior in the normalization talks, Kapitza, on a "private" visit to Peking in March. His efforts to sound out the Chinese on renewing talks, which had been cancelled as soon as the Afghanistan invasion occurred, were coldly turned aside, diplomats here say.

Even before Afghanistan, the talks were given little hope. The Chinese appear to have been sticking to their decade-old demand that the Soviets withdraw military forces from a set of disputed territories along their mutual border as a precondition to serious negotiations.

Some analysts have watched the steady growth of Sino-Soviet trade in the last few years and wondered if it might provide a basis for better relations. But the amount is still small, only about 2 percent of total Chinese trade and a smaller percentage of total Soviet trade.

The Chinese apparently could profit from importing the simpler machinery of Soviet industry, but they have now made an enormouse commitment to Western and Japanese technology and have come to compete with the Soviets in important export areas like petroleum. Trade has also been stymied by Chinese insistence on what is virtually a barter trade with Moscow, for they refuse to incur a trade debt that would put any Soviet claim on their assets.

The Soviet pressures on China appear to be too great now for any serious reconciliation. Soviet aid to Vietnam has severely restricted Chinese efforts to influence events along their southern border. The Soviet Far East is likely only to become, as time goes on, an increasingly important part of the Soviet economy, making the Soviets that much more resistant to any Chinese threats to the area.