IT TURNS OUT that Taiwan, a friendly country, was involved in a savage act of terrorism on American soil. Its military intelligence bureau had a hand in gunning down an American citizen, Henry Liu, a critic of the Nationalist party, which governs the offshore Chinese island, in front of his home in Daly City, Calif., last Oct. 15. Suspicions of a Taiwanese hand had been voiced earlier but confirmation now comes from the Taiwan government itself. It has just announced its own agency's involvement in the murder, arrested three top officials of the bureau, including the chief, and is making two suspects -- described as members of the criminal "Bamboo Gang" -- available to American FBI and police investigators.

Taiwan's involvement will surprise no one familr with its intelligence activities in the United States. It has included operations to gain military and political information and influence the development of American policy and public opinion -- operations more suitable to the style of a hostile power -- and the surveillance of Taiwanese studying in this country and of parts of the Chinese-American community.

These intrusions have provoked broad concern among Americans -- although perhaps not broad enough. Taiwan's status as a friendly country, one especially admired by American conservatives, has perhaps inhibited the American reaction to some of its excesses. There may also have been an unfortunate tendency to accept Taiwan's spying on "Chinese-Americans" as somehow its proper concern.

So why has Taiwan now come forward to disclose its own role in the Liu murder and to take some initial concrete steps against individuals? President Chiang Ching-kuo may understand that the secret police went too far and it was necessary to cut Taiwan's loses before the case took on the dimensions of Chile's murder of emigr,e Orlando Letelier. Perhaps Mr. Chiang meant, belatedly, to accept a political requirement to assert authority over a rogue branch of the bureaucracy. Or he saw the wave of anger building in the United States, especially in the House, where some members are discussing a cutoff of arms sales in retaliation for the murder.

A foreign government's assassination of an American citizen on American soil is a hostile act. Had this murder been committed by an avowed enemy of the United States, it would have provoked a national explosion. The administration is plainly embarrassed at the spectacle of a favored friend's acting like a thug. Taiwan, nonetheless, must pursue its responsibilities in this case to the end. It must also close out the pattern of intelligence operations that culminated in the murder of Henry Liu.