With gumshoes posted on a nearby rooftop and decoys sent to stake out the scene, officials of the pricey Jianguo Hotel figured they had uncovered a dangerous case of bourgeois corruption on their fourth floor shortly after midnight last Sunday.

They were poised to catch red-handed what they thought was a local woman visiting a Westerner in his off-limits hotel suite.

But when the intrepid hotel night manager and six retainers sprung their trap, they found instead resident ABC News correspondent Jim Laurie, 35, drinking a glass of mineral water with a Canadian-Chinese friend, Colleen Leung, 27.

Not easily scared off the scent, the house dicks rejected Leung's Canadian passport as "invalid" and, sniffing in disgust, accused the American newsman of harboring a Chinese local in his cushy, split-level quarters.

At 3 a.m., they returned with a posse of 10, including several plainclothesmen who reviewed identification papers again and renewed the dark suspicions. After they were joined an hour later by three uniformed investigators, Peking's finest turned a case of mistaken identity into a full-blown probe.

For the next three hours, the lawmen interrogated Laurie and Leung separately, scolded Laurie for being arrogant when he asked to call the U.S. Embassy, directed him to write a confession and finally seized his press credentials and Leung's disputed passport.

At noon yesterday, the case--known among foreigners here as the "Jianguo shakedown" -- ended in downtown police headquarters with Laurie fined $21 for violating an obscure 1964 "aliens" regulation requiring foreigners residing in Chinese hotels to register their guests.

The incident is the latest example of the great lengths to which Chinese authorities go to separate their subjects -- or suspected ones -- from foreigners living in this capital city of 10 million people.

Peking has isolated its foreign community ever since traders and missionaries penetrated the Middle Kingdom in the 17th century and were forced to live outside the city gates. Three hundred years later, the quarantine policy has become more complicated -- some say more pressing -- as China admits a diverse group of students, businessmen, scholars, diplomats and journalists.

With their shiny cars and open lifestyles, foreigners present an attractive contrast to the gray Chinese existence. This causes difficulties for a Communist regime trying to balance rising popular expectations with a tottering economy, and it stimulates the traditional impulse to keep foreigners behind high walls.

Officials enforce a strict isolation policy today by restricting foreigners to certain housing complexes and hotels -- like the modernistic Jianguo -- that are out-of-bounds to local Chinese.

For Pekingites, a foreign friendship is almost certain to attract the attention of the dreaded public security police. Common workers are warned in political study sessions to beware of foreigners who are out to steal state secrets and corrupt them with loose morals.

Chinese authorities have dramatized their commitment to the isolation policy by cracking down on a number of relationships they deemed to be illicit.

Last year, the 25-year-old fiancee of a French diplomat who had been living with him in a foreign compound was arrested and sentenced to two years in a "reeducation through labor" camp.

In June, an American teacher was detained for nearly a week in a Peking jail and finally expelled from China after she was accused of obtaining secret documents from Chinese friends -- several of whom also were arrested.

Officials kidnaped an Inner Mongolian dancer who had been engaged to a Canadian before eventually approving the marriage last year and allegedly drove a young African and his Chinese lover to suicide by refusing to grant their marriage request in late 1980.

Often, the policy falls hardest on overseas Chinese from North America, Europe and Southeast Asia who live in foreign compounds and shop in foreigner-only stores under a constant cloud of surveillance and uncertainty.

"If you're overseas Chinese, you always have to prove you're not guilty of being local," said Leung, a Vancouver native who has worked in Peking for two years as an English translator.