Officials of the Chinese Embassy's cultural section will occupy two Northwest Washington homes that China has purchased for $1.4 million in a diplomatic breakthrough, according to a State Department spokesman.

The People's Republic of China has not been allowed to buy property in this country since 1982, because it has not permitted the United States government to own property there. Thus, the State Department was forced to lease buildings for its envoys in China.

The ban on Chinese ownership was authorized by a 1982 law designed to give the State Department more leverage over countries that do not afford U.S. envoys the privileges their diplomats enjoy here.

The law set up the Office of Foreign Missions to give more control over foreign diplomats, who must get approval from the office to acquire property in the United States. Many countries, which allow U.S ownership of property, are routinely given permission to buy property here.

Now, the Chinese government has agreed to allow the United States to own property in China, said State Department attorney Ronald Mlotek, who represents the Office of Foreign Missions.

"They have agreed to let us purchase structures, but not the underlying property," Mlotek said. These are the same conditions under which the Chinese government was permitted to buy the two Washington homes.

The State Department bought the houses in August, paying $850,000 for the residence at 3500 Williamsburg La. NW and $550,000 for 3514 Williamsburg La., according to Rufus S. Lusk & Son Inc., which reports real estate transactions in the Washington area.

The department then sold the buildings to the Chinese government, but retained ownership of the land on which they stand, resulting in "no net cost" to the U.S. government, Mlotek said.

The Chinese will be allowed to use the property, free of charge, for 90 years under terms of their agreement with the State Department, he said.

The United States is "considering" several properties in China, and "we are very close" to a decision to buy some of them, according to Mlotek. While no purchases have yet been made, "we have a signed agreement that covers all areas" of China, allowing the American purchase of buildings, he said.

Chinese Embassy staff members in Washington have been living in a former hotel, where they "are pretty cooped up," Mlotek said. "They do have problems" of limited space there.

"We also have space problems in China, rather severe ones," he added.

The former Windsor Park Hotel, which China bought in 1973, before passage of the Foreign Missions Act here, serves as the Chinese embassy. Nearly all of the 90 Chinese diplomats and about 50 support personnel also live in the building, located on Connecticut Avenue. Before the Williamsburg Lane houses were aquired, only Ambassador Zhang Wenjin, 70, and a small staff lived outside the old hotel.

A Chinese request for permission to buy a Washington apartment building for use as a staff residence was denied last year, according to a report to Congress made by the Foreign Missions Office.