"A New China Strategy" by Kenneth Liebeithal, in Foreign Affairs (Nov.-Dec. 1995),58 E. 68th St.. New York, N.Y. 10021.

Its economy is surging, its military power is growing, and it is increasingly assertive in international affairs. China is finally claiming the role of a great power. Yet the United States, says Lieberthal, a professor of political science and business administration at the University of Michigan, has no coherent response.

Some American analysts hope that China will experience a Soviet-style meltdown leading to a more cooperative, democratic govern- ment. But it is far more likely, Lieberthal says, that a weakened China would cause even bigger problems for the world than a strong one: civil war, famine, migration, and possibly nuclear mischief. Other American analysts favor a policy of containment. But that, writes Lieberthal, would only divide Asia, strengthen China's nationalists and militarists, and reduce the region's prosperity.

The Clinton administration talks of "comprehensive engagement" with China, but that is just an empty phrase, Lieberthal charges.

U.S. policy is ad hoc, uncoordinated, and driven by politics and emotion. Washington "thrashes China for human rights violations" with one hand while offering friendship with the other. Last year, the administration privately assured Beijing that it would not issue a visa to Taiwanese president Lee Teng-hui, but then, yielding to pressure at home, did so anyway, thus humiliating the Chinese officials who had accepted Washington's assurances.

In Beijing, Lieberthal sees a volatile mix- ture of cockiness and insecurity. Rapid change has made China more difficult to gov- ern. Deng Xiaoping, who has insisted on a "basically cooperative" relationship with the United States, is in his last days, and a succession struggle is imminent. The temptation to play the nationalist card will grow. Many in Beijing detect a new reluctance in international councils such as the World Bank to make allowances for what Beijing calls "Chinese characteristics" in areas such as human rights and economics. They argue that China should take a hard line "and push hard for the world to accept it on its own terms," Lieberthal says.

The United States needs to encourage positive developments within China, he says. It also needs to rally other countries (notably Japan) "to articulate and convey to China's leaders the conduct expected of major powers" and to stand with Washington. The best that can be hoped for from a good policy is modest success, Lieberthal concludes. And in the absence of any policy, the worst is not too much to fear.