CHINA and the United States have agreed to open a new chapter of military dialogue, marking another cautious step forward in US President Bill Clinton's attempts to improve relations with Beijing. ''We discussed a number of modest initiatives for military dialogue and exchanges between us,'' Charles Freeman, the US Assistant Secretary of Defence for Regional Security Affairs, said yesterday, at the end of a day-and-a-half of talks with top Chinesemilitary officials. Mr Freeman, a former US ambassador to China and the highest-ranking military official to visit Beijing since the 1989 massacre, said the exchanges would focus on the conversion of military facilities to civilian use, and on international peace-keeping. The US envoy described the Chinese military officials he met as ''very open to the idea of resuming exchanges and engaging in a range of activities''. According to Xinhua (the New China News Agency), the Vice-Chairman of the Central Military Commission, General Liu Huaqing - whom Mr Freeman met in Beijing -described the visit as ''a good beginning'' for improving bilateral military relations. Since the Tiananmen Square massacre, Sino-US military contacts have been limited to lower ranking defence officials, and have excluded the sorts of exchange which the two sides now plan to resume. However, military relations seem, by Mr Freeman's account, unlikely to return to what they were in the 1980s, when the United States assisted China in countering the perceived Soviet military threat. ''Obviously the world has changed a great deal since 1989 . . . so it isn't appropriate to think in terms of going back to the sort of relationship we had from the early 1980s through 1989, and we're not talking about that,'' Mr Freeman said. Mr Freeman also said he was hopeful Beijing and Washington could resolve a dispute over alleged sales of Chinese M-11 missiles to Pakistan, which last August prompted the United States to ban sales of sensitive US technology to China. The US military envoy said he raised the issue of M-11s with the Chinese. ''It is my hope that those discussions will pave the way for us to put that issue behind us,'' he said, but hastened to add: ''I cannot report that was achieved during my visit. Itwill require more work.'' He noted that there was no change in the status of US military sanctions imposed on China last August, or others slapped on just after the massacre. In the spirit of Mr Clinton's policy of mending fences with China, Mr Freeman shied away from using the tough language that has marked Sino-US relations over the past few years, and, while noting that problems remained, made a point of praising China in some respects. For example, Mr Freeman said, with regard to international peace-keeping: ''I would stress in particular the very fine performance which China turned in in Cambodia, which reminded us of something important, namely that as a permanent member of the [UN] Security Council, with a very large standing army, China is very likely to participate in future peace-keeping operations alongside the United States.'' Mr Freeman said military conversion was ''an area where China has played a pioneering role and where we have much to learn from the Chinese''.