The Reagan administration has decided to withhold temporarily the presentation to Congress of a new arms sale to Taiwan in order to facilitate settlement of a long-running dispute with the People's Republic of China.
The decision, made in the past few days, reflects a growing but still guarded optimism among informed officials here that Washington and Peking may be close to agreement on a joint statement of future policy regarding U.S. arms supplies to Taiwan.
Informed sources said new instructions had been dispatched to U.S. Ambassador to China Arthur W. Hummel Jr. in an attempt to resolve the Sino-American dispute. The details of a joint settlement statement have been the subject of several diplomatic exchanges between the governments since early this month.
A source familiar with the discussions cautioned that obstacles remained, but he conceded that officials were moderately more optimistic than previously.
The clearest indication of the administration's enhanced hopes is its decision to postpone action on the renewal of Taiwan's contract for coproduction of Northrup F5E jet fighters. The existing contract runs out in July, 1983, but the company would like to have assurance of a renewal by this September in order to avoid a break in the production line.
President Reagan decided last January to approve continuation of the F5E sales to Taiwan but to reject proposals to sell a more advanced U.S. warplane to the island. The announcement of these decisions brought protests from China, on grounds that a continuation of U.S. military sales to Taiwan interferes in Chinese domestic affairs.
On June 23, White House national security adviser William P. Clark told a group of lawmakers that notification of the renewal of the Taiwan F5E contract probably would be sent to Capitol Hill in late July or early August in order to accommodate Taiwan's desire for a quick decision. Subsequently, the White House set an informal target date of July 29 for the notification.
Members of Congress were informed this week, however, that the new Taiwan contract would not be sent to Capitol Hill for the time being. Hope remains, they were told, that the United States and China can reach agreement on the long-term Taiwan sales issue in the meantime.
The settlement under discussion, according to the sources, would not set a date for termination of U.S. military sales to Taiwan or even explicitly promise that the sales would be terminated. However, the United States would state its expectation that its arms sales to Taiwan would decline in quantity and quality from their high point in the last year of the Carter administration.