CHINA and the United States have agreed to intensify their co-operation in battling the rising tide of narcotics and illegal immigrant smuggling, a senior US official said yesterday. Assistant Secretary of State for International Narcotics Matters, Robert Gelbard said the two countries had reached fundamental agreement on most issues but conceded some differences still needed to be ironed out. The infamous ''goldfish case'' in which a Chinese witness at a drug smuggling trial in the US claimed and was granted political asylum, for example, remains an ''irritant'' and a cause of ''intense frustration to the US administration,'' Mr Gelbard said.And the US administration ''feels that the gentleman involved is a criminal and is concerned that he has not been returned to China.'' The way in which the political asylum claims of illegal Chinese immigrants to the US were being processed was also a source of disagreement between China and the US but Mr Gelbard said the US was introducing legislation on ''expedited exclusion'' which would reduce the process by which illegals were repatriated from a matter of months to just about 10 days. Mr Gelbard, who is leading the largest ever US law enforcement delegation to China, pointed out however that in general the US had been receiving excellent co-operation from the Chinese authorities on international smuggling issues and was ''very pleased'' with his negotiations in Beijing this week. ''The Chinese Government views this problem with the same very great level of seriousness that we do,'' he said. Both governments agreed on the need to find ways to reduce demand for narcotics both in the US and China, to attack the sources of narcotics cultivation and to work together to disrupt and eliminate international trafficking groups. China was not a major problem in the fight against international drug traffickers, Mr Gelbard said, rather the biggest cause of concern in the region was Burma where the cultivation of opium has been growing ''significantly and dramatically''. Mr Gelbard said he had asked Beijing to use its influence in the region to help stop the cultivation opium and flow of heroin out of Burma through the neighbouring Chinese province of Yunnan. It is estimated that one-seventh to one-fifth of all narcotics produced in Burma and the rest of the Golden Triangle are shipped through the mainland and many observers are convinced Yunnan officials are either involved in or turning a blind eye to the trade. However Mr Gelbard said China had been doing positive work in the region by introducing crop substitution programmes, interdiction and other law enforcement programmes and had taken strong law enforcement actions against traffickers. ''We are very comfortable with the actions they are undertaking but it is quite clear too that the problem is a severe one and we intend to seek more effective measures in the short and medium term,'' he said.