Former president Richard Nixon, on his fifth visit to China, received a hero's welcome today as he told a university audience that the most important relationship in the 21st century could be between the United States and China.

About 600 students at Peking's University of International Business and Economics warmly applauded his speech, and as he made his exit he was mobbed by students seeking his autograph and a handshake.

At first glance, one might not expect that the Chinese, who place great value on saving face, would honor a man who has suffered perhaps the greatest loss of face of any contemporary American politician. But from the Chinese point of view, Nixon is "an old friend," whose honor depends almost solely on what he did for China.

Nixon, 72, who initiated the process of normalizing relations with Peking in a 1972 presidential visit, was treated today almost as if he were making an official visit; dozens of large, colorful silk banners lined the driveway to the university to welcome him. An official Red Flag limousine, followed by a motorcade of six other cars, was provided for his use.

In Peking at the start of a one-week visit to China, Nixon is scheduled to meet Thursday with Communist Party General Secretary Hu Yaobang and Premier Zhao Ziyang and is also expected to meet with China's top leader, Deng Xiaoping.

Chinese, at least in the urban areas, often are aware that there was an incident that led to Nixon's resignation from the presidency Aug. 9, 1974, during the Watergate scandal. But from top Chinese officials on down, Watergate seems to be viewed as an unpleasant footnote to history. As one foreign resident here explained, "Foreign leaders are judged according to their relationship to China, and that alone. Nixon did a lot for China."

China and the United States formally established relations in 1979 during the Carter administration.

"Nixon was a great man who contributed to the establishment of relations with China after more than two decades of hostility," said a Chinese university graduate who attended the students' meeting with Nixon.

"Nixon is viewed in the Watergate affair as a victim of bourgeois hypocrisy. Others may have done things much worse than Nixon, but only in his case was it made known to the public . . . . Nixon is viewed as a victim of a power struggle among factions," the student added.

"A far-sighted man and outstanding politician," said Jin Xiaochuan, 19, also a student.

During the Watergate affair, the official Chinese press diplomatically avoided mentioning the scandal. Some Chinese learned details of it only through internal Chinese publications not available to the general public.

The late chairman Mao Tse-tung's wife, Jiang Qing, was once quoted as saying, "Nixon is a brave man. His virtues surely outdid whatever his liabilities were."

The current Chinese leaders would also agree.

When the Chinese invited Nixon to China in 1976, following his resignation, they sent a special airplane for him.

In his speech today, Nixon said China "has the genius to do what it must" and the ability to move forward into the 21st century as a "great and progressing nation."

While a common perception of a Soviet threat had made the 1972 Sino-U.S. understanding possible, Nixon said it was not his main motive for initiating links with China.

"Rather, it was the hope I saw when I looked ahead to the world of the 21st century," he said, adding that by then, Sino-U.S. ties could be the most important in the world.

Nixon provided an optimistic vision of the 21st century in which the awesome power of nuclear weapons would make world war "obsolete as an instrument of policy." He described the world of the future as one of "open cities, open skies, open minds and open hearts; a world where our enemies are not other peoples but the common enemies of all mankind: poverty, hunger, misery, disease and injustice wherever they exist in the world."

Nixon made the short address over the modern video system at the elite international business college. He congratulated the college on having equipment that did not exist when he was a law student 50 years ago.

During his seven-day visit, Nixon will tour Xian, Xiamen and Guangzhou, formerly known as Canton.