A high-ranking Soviet envoy arrived here today for consultations that mark renewed interest by China in reconciling differences with its old strategic foe.

Diplomats said the visit by Deputy Foreign Minister Mikhail Kapitsa is a significant advance by the two communist powers toward normalizing relations after two decades of bitter squabbling. Kapitsa is the highest Soviet official invited to China since the 1960s.

His visit comes amid signs that Peking has concluded a reassessment of its Soviet policy and decided to press ahead with efforts to improve relations.

A draft foreign policy statement circulated at a Chinese Central Committee work session in July reportedly justifies the need for at least a limited accommodation with Moscow while calling for an overall posture of strategic independence.

Peking still regards its northern neighbor as a security threat and insists on a pullback of the advanced Soviet military stance in Asia as a condition for any fundamental normalization of ties.

But Chinese leaders reportedly are determined to expand commercial and cultural relations, and they plan to host the third round of formal normalization talks in Peking next month. Kapitsa is expected to try to sort out several contentious international issues to smooth the way for the October consultations.

"The Chinese are prepared to make concessions if the Soviets are willing to make concessions," said an Asian analyst. "To get the Soviets to move, Peking has to convince them of its sincerity."

Peking has sought to create the right atmosphere for the Kapitsa visit. Official press reports have praised past Sino-Soviet friendship. Chinese officials have leaked plans by Foreign Minister Wu Xueqian to meet his Soviet counterpart at the upcoming U.N. General Assembly session. A top Soviet expert on China has been invited to lead the first Russian tourist group to China in decades.

Even the Soviet downing of a South Korean airliner has been handled with restraint here. Although the Chinese government expressed "regret," it has ruled out sanctions or protests against Moscow.

Diplomats said Peking apparently tempered its response so as not to upset the Kapitsa visit or October normalization talks. The analysts noted that the last real effort to reconcile Sino-Soviet problems was derailed in 1979 after Soviet troops were sent into Afghanistan and Peking reacted with outrage.

In the South Korean airliner case, however, Peking has taken pains to limit its criticism. The day after the plane was shot down by a Soviet missile, President Li Xiannian urged better ties with the Kremlin.

Li, who was responding to an earlier call by Soviet leader Yuri Andropov for reconciliation, said last Friday, "this is to be welcomed.

"We sincerely hope that obstacles will be removed so that China and the Soviet Union can develop normal state relations," he said at a state banquet.

Despite China's conciliatory tone, diplomats believe the obstacles cited by Li are too stubborn to permit an early normalization of relations between Moscow and Peking. Chinese officials list three main roadblocks--Soviet occupation of Afghanistan, deployment of troops along China's northern border and support for Vietnamese forces in Cambodia.

Vice Premier Wan Li said in Tokyo yesterday that the security threat posed by Soviet troops and weapons so close to China dims prospects for a fundamental improvement in Sino-Soviet ties.

Kapitsa, who will meet with Foreign Minister Wu and Vice Foreign Minister Qian Qichen during his week-long stay, is expected to concentrate on the Afghanistan and Cambodian issues.

He told Chinese reporters today that bilateral relations--by that he apparently meant concrete measures to expand trade, technology exchanges and cultural links--will be left to the October meetings that will be led by Qian and Deputy Foreign Minister Leonid Ilyichev.

According to Western diplomats, Moscow is hoping for significant developments at the upcoming talks to balance China's slightly improved relations with the United States.

The Soviet Bloc has recently intensified its overtures for better relations with China as Peking and Washington gradually move to solve such previously sticky issues as U.S. curbs on Chinese textile exports and U.S. restrictions on transfer of sophisticated technology.

Six Soviet Bloc nations in July sent identical notes urging China to declare itself in the socialist camp and to condemn U.S. policy, according to diplomats.

Peking, in response, reportedly emphasized its independent diplomatic line, saying it opposes "hegemony," be it capitalist or socialist.