WHILE Sino-US relations are too important to both sides to self-destruct over the Olympic issue, there cannot have been a China-watcher in America who was not intrigued to see how the IOC members voted. The choice of a site for the 2000 Games has brought the mistrust between the two nations into sharp focus. To read the papers over the past two months, one could easily be led to believe that the Cold War drama had been extended to a sequel, with China taking over the role once played by the Soviet Union. It had several acts: the US accusations that China wasselling prohibited missile parts to Pakistan; the failed attempts by Clinton officials to gain reassurance from Beijing, leading to the imposition of sanctions; the adverse publicity over the Golden Venture and other alien-smuggling ships; the Congressional calls for Beijing's Olympics bid to be rejected; the condemnation of the treatment of expelled activist Han Dongfang; the renewed calls for MFN to be revoked next year; the diplomatic fiasco over the Yinhe's alleged (and invisible) cargo of chemical weapons; and, last week, another proliferation claim - that China was about to test a nuclear bomb. Boy, those US spy satellites had been having a busy holiday season. To China - which naturally replied to most of these bombshells with counter-blasts in the official media - the US was using diplomatic warfare to punish it in the same way it used live ammunition to stalk Somali warlord General Aideed. CHINA, to the majority of the American population who do not have intellectual access to State Department diplo-speak, was suddenly Public Enemy Number One. With the Soviet Union deceased, Cuba crippled, and Iraq and Iran on leave, Beijing was the new bogeyman for the post-Cold War party - the regime that tortures political opponents and arms Islamic enemies. In Washington last week to accept a human rights award, Hong Kong businessman and dissident-watcher John Kamm sounded the gloomiest note so far, saying that having spoken to people in the adminstration, he was certain that as things stood, China had virtually no chance of retaining MFN next year. He said: ''US-Sino relations are at their lowest point since Nixon went to China in 1972. There is little hope that they will improve in the months ahead.'' Sobering words. And yet on Tuesday, National Security Adviser Anthony Lake called for closer ties with China, buoyantly reaffirming the United States' relationship with Beijing as one of its most important. Diplomatic doublespeak, or the fickleness of a lover, who courts affection on one hand and sulks jealously on the other? To Dr Alfred Wilhelm, executive vice-president of a foreign affairs institute, the Atlantic Council, recent developments were not evidence of a concerted campaign of US malice, but more of insensitive management. ''What's happened is that there has been a confluence of unfortunate events at one time. I don't think it would be right to think that there's a masterplan at work, and I don't think the administration is setting out to make China [a bogeyman]. But the relationship is being dragged in that direction. ''We are in a particularly deep trough right now - it is a combination of different factors which don't always come together at the same time.'' Americans had not forgotten the images of 1989, and still felt honour bound to push for progress on human rights issues which China viewed from a different cultural standpoint, said Dr Wilhelm. ''Zhou Enlai said something like 'Amplify and focus on your common ground, and put aside your differences for the future'. But you can only put them aside for a short period of time,'' he said. In its missionary zeal on human rights and proliferation issues, the US was failing to recognise the historic Chinese need to maintain face, he said, citing the recent meeting at the ASEAN conference between Secretary Of State Warren Christopher and Foreign Minister Qian Qichen. Whereas the Chinese tried to keep the M-11 missile row diplomatically under wraps, and portrayed the meeting as a successful one, every story in the American media painted a negative image of the talks. The forthcoming ''informal leaders' meeting'' at November's APEC conference would provide China with another potential problem, predicted Dr Wilhelm. If it does send President Jiang Zemin to meet Bill Clinton in Seattle - the highest-ranking official on US soil since 1989 - it will be at great political risk, since it needs guarantees that US-Sino relations will immediately be seen to improve. Compounding the problem of the United States' sledgehammer approach was that of Beijing's often debilitating paranoia, according to Dr Gerrit Gong, director of Asian Studies at the Centre for Strategic and International Studies. What Chinese leaders often failed to appreciate was that America has too many different political forces to speak as one voice, he said. I T was thus that Beijing took Congress's outspoken opposition to its Olympics bid as the administration's official position. ''They think of the US as a single system, and don't realise that it has 436 secretaries of state - one for every member of theHouse,'' said Dr Gong. Despite the strident People's Daily commentaries - and in the Yinhe case, some might say justifiably so - it is clear that China is desperately anxious to maintain a stable dialogue with the US, not least because MFN is so vital to the future of its economic growth. It is not without reason, for example, that Hong Kong and Macau Affairs office chief Lu Ping has been in the country this week, privately sounding out opinion on Beijing's stance on Hong Kong political reforms. Significantly, he met Dr Gong, a former aideto two Beijing ambassadors, and someone who can tell Mr Lu what to expect in the way of American reaction if China overplays its hand in the battle with Governor Chris Patten. On the American side, the problem is not just one of knowing how to cope with a ''friend'' that talks in non-proliferation terms while continuing to arm rogue regimes. Dr Gong believes that security officials cannot ignore that a current growth rate of 12.8 per cent implies a growth in domestic military spending, and that China is now a bigger player on the world stage. The Washington Post 's Jeffrey Smith, who broke the story of China's impending nuclear test, said his article was not the result of leaks from officials looking for another political egg to throw at China. But he added that his contacts in the security field convinced him China was a current priority. ''There's no question people in the administration think China is on the troublesome side. There are more things happening there at variance with US foreign policy than in almost any other country.'' Dr Wilhelm said that the old Cold War certainties, when the Soviet Union was a distinct, simple military threat, had gone, leaving a tangle of intelligence issues. China was just one of them, and American analysts were still trying to assess it. And the key to future stability, added Dr Gong, was for US officials to open and maintain dialogue with Chinese counterparts at every level of Government, central and local. What faces us instead is another potential stumbling block next month, when human rights official John Shattuck makes what is bound to be a high-profile fact-finding visit to China, where US-Sino disagreements on the old thorny issues are likely to be aired in public once again. The United States is lucky, of course, that it has an open society where such things can be freely discussed. That, for the time being, is not China's way and it will continue to smart at every public criticism. After such a tumultuous two months, and whether China is basking in Olympic glory or not this morning, it is safe to say that things between Washington and Beijing can only get worse before both sides heed Zhou Enlai's plea for peace.