CHINA could face punitive tariffs on its US exports and sweeping sanctions against its military-run businesses - even if, as expected, Congress votes to renew Beijing's most-favoured nation (MFN) status for another year. Even though a large group of China critics on Capitol Hill are still likely to vote to withdraw MFN status, the focus is shifting towards what kind of compromise measure is likely to actually pass. Two pro-trade members - Congressman Doug Bereuter and Senator Spencer Abraham - have each introduced their own bills which they hope will allow MFN to pass intact by giving China critics a feasible means of expressing their discontent with the administration's China policy. The legislation introduced last week by Mr Bereuter - who, as he did last year, will be the leading member of the pro-MFN forces - would grant Beijing permanent MFN when it finally joins the World Trade Organisation (WTO). But in the meantime, it also would compel President Bill Clinton to impose tariff increases potentially worth hundreds of million of dollars on Chinese imports if he determines that Beijing is not negotiating seriously enough on its (WTO) membership. And in the Senate, Mr Abraham's China Sanctions and Human Rights Advancement Act would ban certain Chinese officials from entering the United States, would force Norinco and the Polytechnologies Group - two enterprises linked to the People's Liberation Army - to close their many US operations, and require the US to oppose all lending to China by the World Bank, Asian Development Bank and other multilateral organisations. Although the two bills are aimed at protecting Beijing's MFN during the current heated debate, the stringent measures included in the legislation would be sure to anger Beijing and have placed the Hong Kong Government office in Washington in a difficult position as it continues an expensive lobbying campaign to beat off MFN opponents. Mr Bereuter's bill, which is aimed at encouraging China to enter the WTO and put an end to the perennial MFN issue, would involve applying 'snap-back' tariffs on Chinese imports if, six months following the passing of the law, the White House judges that Beijing continues to deny the US 'adequate trade benefits' and is not opening up its markets towards its WTO entry. The tariff levels would rise to those in place before the Uruguay Round of GATT was completed in 1995, and although not as drastic as a denial of MFN, they would cost China at least US$300 million a year in extra taxes on just its top 25 imports, according to estimates. The extra tariffs would be dropped as soon as China's WTO entry was complete. Mr Abraham's legislation focuses more on human rights, and he said last week that removing MFN would hurt the Chinese people. 'Our quarrel is with the Chinese political leadership, not with the Chinese and American peoples,' he said. One of his measures - banning the issuing of US visas to Chinese officials thought to be linked to the Tiananmen Square crackdown or involved in one-child family policy implementation - would in itself create a diplomatic nightmare for Washington. The bill also cites the Poly group's involvement in the smuggling of AK-47 machine guns into the US as a reason for shutting down Norinco and Poly's US operations, and banning imports of their products into the country. The legislation would also double the funding given to organisations such as Radio Free Asia, primarily set up to encourage democratic reform in China. It is unclear how the administration would react to the passing into law of either of the compromise bills. Mr Bereuter made a similar move last year when a compromise measure he introduced help ensure an overwhelming vote to renew MFN. The Senate did not even bother to debate or vote the issue in 1996. But this year, the issue has become so heated that several conservative voices are urging members to rally round the Abraham bill. Meanwhile, the anti-MFN camp is likely to introduce resolutions in the next few days which would entirely revoke Beijing's MFN status.