Behind President Clinton's announcement yesterday to renew China's trade privileges lies an aggressive lobbying campaign by U.S. business that began a year ago after a private White House briefing on the administration's policy toward Beijing.

At that session, Washington's top business lobbyists realized that despite their emphasis on human rights, administration officials cared deeply about maintaining economic ties to China.

Clinton economic adviser Robert E. Rubin and other aides indicated the administration's long-term target was to sever the potentially explosive linkage that conditioned China's preferential trading status with the United States on its record on human rights. Connecting the two had resulted in annual showdowns between Congress and the White House since the 1989 Tiananmen Square massacre of Chinese dissidents.

"It was our clear understanding that their ultimate goal was to get out of that cycle," said Judge Morris, trade director for the National Association of Manufacturers, who attended the briefing.

But the issue exposed a basic contradiction in Clinton's policies -- his desire to champion the cause of human rights and his belief that expanding trade is essential to expanding jobs, said Jerry Jasinowski, NAM's president.

Clinton's announcement yesterday averts a potential trade war between the two countries, giving U.S. business a political and economic victory rivaled only by congressional approval of the North American Free Trade Agreement (NAFTA) in November.

"The arguments on trade won the day," Jasinowski said.

This time, it fell largely to corporate executives and lobbyists to persuade Congress that increased trade with China meant too much in terms of jobs and profits to be put at risk.

While Clinton led the NAFTA fight, he kept silent in this debate, hoping that China would improve its human rights performance and waiting while the business lobbyists pressed the economic argument, creating the shift in political winds that permitted a course change.

"The politics of trade have changed dramatically in the past 12 months," said Willard A. Workman, vice president of the U.S. Chamber of Commerce. Many lawmakers have "begun to realize that trade matters. ... It means jobs for people that vote for them."

It was critical to persuade Congress that U.S. companies in China were creating better working conditions, living standards and economic rights for Chinese workers and that revoking China's most-favored nation trading status, or MFN, would cut off that process, said Calman Cohen, who directed the business lobbying campaign.

While the campaign for NAFTA was designed to build majorities in the House and Senate, the lobbying thrust this time was concentrated on leaders such as House Foreign Affairs Committee Chairman Lee H. Hamilton (D-Ind.), whose support gave a dose of confidence to the president's advisers, business lobbyists said.

Hamilton was one of 276 House members who signed a March 1 letter to Secretary of State Warren Christopher that called on China to meet Clinton's human rights conditions. But Hamilton wound up supporting MFN renewal.

Business lobbyists also pressed House members such as Rep. Jim McDermott (D-Wash.), whose district is home for thousands of Boeing Co. workers whose jobs would be jeopardized in a U.S.-China trade war. Earlier this month, he helped produce a letter signed by 106 colleagues calling for MFN renewal.

Yesterday, Rep. Nancy Pelosi (D-Calif.), a leading critic of China's human rights record, refused to accept defeat. Announcing her "great disappointment" with Clinton's decision, she promised to press for legislation imposing targeted sanctions on Chinese imports flowing out of military-owned factories.

However, the ultimate sanction of revoking China's MFN status, which would have caused U.S. tariffs on China's products to soar five- to ten-fold, had ceased to be an option.

With Germany, Japan and other nations in line to sweep up any China business the United States rejected, Clinton and his advisers faced a grim reality that previous administrations had ignored, Treasury Secretary Lloyd Bentsen said yesterday.

Bentsen recalled how previous administrations' attempts to punish other countries with commerce ended up benefiting competitors. "I watched when {President Jimmy} Carter tried to stop selling wheat to the Russians and the business went to the Australians and the Canadians," he said. "I watched when {President Ronald} Reagan tried to stop construction of {a natural gas} pipeline in Russia and Caterpillar almost went down the tubes.

"More and more, we find that economics is a major point in foreign affairs," he said. "That's going to accelerate."

Staff writer Clay Chandler contributed to this report.