On March 22, 1998, top police officials in this historic Chinese metropolis held an emergency meeting. At stake, said police chief Liu Ping, was the life of the president of the United States.

A killer was on the loose in Xian, known once as the "city of heavenly peace" but now as the "city of thieves." In three months, with no apparent motive, he had murdered four people and left a woman in a coma with a bullet to the face.

President Clinton would be visiting the city in June on his first trip to China and was to mingle with people in the streets. The Ministry of Public Security in Beijing had sent Liu an order, he announced: Catch the killer by the end of the month, before a Clinton advance team arrived.

The manhunt lasted 100 days and involved more than 10,000 police officers. As they probed an underworld of killers, prostitutes, drug addicts and pickpockets normally unseen by foreigners, the case provided a rare look behind the facade of a surging economic juggernaut and would-be superpower that China presents to the world. It revealed a country with a rising crime rate, a society unsettled by 20 years of economic reform and a yawning disparity between rich and poor.

The "12-1 Armed Homicide Major Case"--so named because the first killing occurred on Dec. 1, 1997--is populated by characters worthy of Dickens. There is Huang Xin, a larcenous lover who used women to set up robberies, then left them waiting for him to marry them or support their babies. There is Wang Jiang, a jack of all trades who would rather jury-rig a pistol than fix bicycles for a buck. And there is a gang leader named Dong Lei, a martial arts expert whose first alleged murder was a double homicide. He is said to have pushed two men into the Yellow River after they fired him from a construction job.

The case also involves a pack of teenage runaways from the highlands of China's dirt-poor northwest--where people live in caves and running water is a luxury. China's bigger cities attract hordes of such young scavengers, who flee the dead end of China's countryside for a life of petty crime and cheap thrills amid the smokestacks and sleazy karaoke bars of the new, urban China.

Case 12-1 also spotlights the daunting task facing Chinese police, who kept uncovering other crimes and capturing other suspects as they pursued their main quarry. The nation's crime rate is soaring. In 1998, 530,000 criminal defendants were sentenced to prison terms, a 30 percent rise over the previous year. Illegal drugs are flooding the streets of many cities, and police last year seized 7.3 tons of heroin, or six times the amount confiscated in the United States. Multiple murders, while often unpublicized, have become more frequent. A Chinese reporter who followed Case 12-1 previously covered the pursuit of a mass killer who was suspected of 21 homicides and 90 rapes.

In an effort to break Case 12-1, police interrogated more than 200,000 people. As with other crimes, the investigation depended less on warrants or rule of law than on "human wave" tactics in which large numbers of citizens are detained, searched, threatened and sometimes violently interrogated--even tortured.

The case has been a sensation in Xian since a television docudrama based on it was aired here last summer--a film that will soon be shown nationwide. This report, however, is based on interviews with sources with direct knowledge of the investigation.

The story begins on the wintry night of Dec. 1, 1997, in the Qin Ling Mountains outside Xian. A plainclothes policeman was heading home on a bus; it was snowing, the road was slick and the driver was drowsy. The bus went out of control on a curve and flipped, killing 10 people. The policeman was seriously injured, but he went to the rescue of other passengers, helping to save lives and escorting an ambulance to Xian's Changan Hospital, where he fainted from loss of blood.

The officer was carrying his standard-issue sidearm, a Model 64, 7.62mm automatic pistol. Chinese plainclothesmen do not wear holsters; they carry their weapons in small tote bags. Hospital doctors placed the bag at the side of the officer's bed, and within seconds, it was gone, stolen by one of the homeless waifs from China's northwest.

The officer discovered the theft, and police soon surrounded and searched hospital, finding the empty tote bag in a sterilization room. The thief was poor, investigators surmised; he had pinched the gun, a few dollars worth of cash, some medicine and the officer's dirty socks.

Dec. 16, a little over two weeks later, was another snowy night. Near a lumberyard on the outskirts of Xian, police discovered the body of a taxi driver who had been killed by two bullets to the head. Tests confirmed that the bullets came from the stolen gun.

Police soon obtained the name of a woman who might have wanted the driver killed--a prostitute known as Little Orchid who had once tried to trade sex with the driver for a free ride home. He slapped her; she threatened to have friends in Xian's underworld kill him.

Hundreds of detectives fanned out across Xian, rummaging around hundreds of karaoke bars and other nightspots. They finally found Little Orchid in jail, arrested in an anti-vice campaign. She told investigators she had given the driver's name to two gangster friends but did not know if they had killed him.

Police found the men and followed them; they were confronted while trying to break into the home of a retired general, apparently with the intention of of robbing and killing him. Police arrested one of the men; the second jumped from a four-story building in an attempt to escape and died. They turned out to be the wrong suspects.

A few weeks later, and about 60 miles away from the site where the cab driver was shot, traffic police found an overturned truck on a desolate highway leading north out of Xian. Two men inside were dead, each killed with two bullets in the back of the head. Again, tests revealed that the bullets came from the missing police automatic. The killer had now used six bullets; the stolen gun had only five in the magazine. Not only did the killer have a gun, but he also had access to ammunition, a rare commodity in China.

"At this point the police began to get very nervous," said a source with direct knowledge of the investigation. "There was no motive. They thought he was a psychopath; so perhaps if he got close to Clinton, bad things would happen."

By mid-February, the case was still unsolved, so police launched a citywide crackdown in which every person with a felony record was interrogated. The source said this amounted to questioning more than 200,000 people in a city of 3 million.

"All of Xian's police officers at one time or another were working on the case," the source said. "All over the city, if you were a big suspect or a small suspect you were called in. They went to homes of non-suspects, to homes of people who were completely innocent, interrogating, writing everything down. The hands of the police officers ached from writing. Their throats were dry from talking."

Sometimes they seemed close. One day, a landlord who was spreading rat poison around his building entered a room rented by a young couple--and found the man cleaning a pistol. "I'm a killing god," the man told the landlord with a smile. "I've killed many people."

Police raided the apartment but discovered that the man was actually a lieutenant in the People's Armed Police from Qinghai province. He had eloped to Xian with his fiancee because their parents opposed their wedding, and the gun was a legitimate tool of his occupation. He was a police executioner; China kills condemned criminals with a bullet to the back of the head.

On Feb. 23, 1998, the killer struck again, killing the manager of a furniture company in his apartment and stealing $3,000. His wife was shot in the face and remains in a coma. By then, police had launched three massive operations to find the killer, but thus far had nothing solid to go on.

Finally, they got a break. They had heard rumors that the stolen gun had been sold by a teenager who worked in a Xian restaurant district. During a sweep of the area, the source said, police were drawn to a commotion at a restaurant where they were told that a man had just fled after beating a pickpocket who had tried to steal his wallet. The pickpocket admitted to police he had tried to lift the man's wallet, then added: "I also saw a gun."

It turned out that the man who beat the pickpocket, and who was ultimately charged with the murders, was gang leader Dong Lei. He had bought the gun from a 15-year-old illiterate named Ma Xiaobao, and as police tightened their noose around Xian, Dong had gone to the restaurant in search of Ma, intending to kill him to prevent him from talking to police.

Xiaobao, police later discovered, had stolen the gun from the hospital on Dec. 1 and buried it. But he broke his leg a short time later, and, needing money for medical expenses, he sold the pistol to Dong for $40.

Still searching for Ma in mid-February, police found his elder brother, a teenage heroin addict and petty thief. Before the interrogation began, Wu Jinbiao, Xian's deputy chief of police, gave his detectives some simple advice, a source said: "Tell him: If he talks about the gun and the killings, he can live. If not, we'll take his life."

The brother gave the police an address. That night, officers with submachine guns flooded the neighborhood under orders to take Dong gang members dead or alive. Thirty policemen broke into a small apartment, nabbing two men. One suspect, who a source said was "subjected to police terror tactics," told investigators that Huang Xin and another gangster were hiding out with one of Huang's girlfriends in Beijing.

The interrogation continued and, under threat of death, the suspect also volunteered that Dong and Wang Jiang, who worked on guns for the gang, had fled to Wuhan, a major city in central China. They were found there on March 27 and arrested. That day, Dong's lover of 12 years, who had followed him to Wuhan, jumped into the Yangtze River and drowned.

Five gang members--including Dong, Wang and Huang--have been convicted of capital offenses, but thus far none has been executed. Nearly two years since Case 12-1 was launched, police are still investigating murders that might have been committed by Dong, the sources said.

Chinese officials said the U.S. government was never told about the case or about China's concerns for Clinton's life. "The main thing," Liu Ping told the officers at that March 1998 meeting, "is to not hurt the reputation of the Xian police, and the police of Shaanxi province, and the nation as well."

CAPTION: Xian police detective Mu Wenxiu, left, is hugged by a city resident in an expression of gratitude for the role he played in solving Case 12-1.