Now Taiwan, the most vexed sovereignty issue of all, once again clouds the relationship. Western alarmists point to the missiles that China has aimed at Taiwan as proof of Beijing’s ““dangerous’’ military ambitions. They raise this cry even though Western military analysts recognize that the deployment actually underscores the weaknesses of China’s People’s Liberation Army. The PLA has no other deterrent to check Taiwanese separatism–neither a credible invasion force nor a coordinated warfare capability. ““Given what the Chinese can do diplomatically and militarily, they don’t have many cards to play,’’ says Bates Gill, a China analyst at The Brookings Institution. ““They have the missile card, period. That’s it.''

Little wonder that the Chinese are alarmed by the idea of a U.S.-organized theater missile defense (TMD) in East Asia. Yet Beijing’s worst nightmares are political–not military. What alarms the Chinese above all, says RAND China analyst James Mulvenon, is the prospect of ““an American computer terminal being set up in a Taiwan command-and-control center, with U.S. military personnel around to monitor it. And this is precisely what Taipei wants.’’ Sha Zukang, China’s top arms-control negotiator, puts it this way: ““TMD in Taiwan will give the pro-independence forces a false sense of security, which may incite them to reckless moves.''

Problem is, Taipei or Washington or Tokyo are always the reckless ones in Beijing’s myopic eyes–never the other way around. When Beijing rails against the idea of a U.S. missile defense in its neighborhood, or when Jiang Zemin reiterates China’s ““red lines’’–including rule in Tibet as well as reunification with Taiwan–its leaders fail to appreciate how harshly their statements come across in Washington. In fact, Sino-U.S. ties are wearing thin in a number of areas. They have been strained by China’s crackdown on political activists, its burgeoning, $21 billion trade surplus with the United States, and by tensions over evidence of a two-decade-old Chinese covert campaign to acquire American nuclear technology.

Despite all of this, many ordinary Chinese still look on America with genuine affection. Bill Clinton’s statements from his feel-good China visit in June, complete with candid remarks on human rights, are selling well as Chinese-language books. NEWSWEEK has learned that a recent survey commissioned by a U.S. government agency showed Clinton’s favorable rating among urban Chinese skyrocketing after the summit from 40 percent to 60 percent.

Nonetheless, just as American hawks are regaining their voices, many Beijing decision-makers have begun to question Washington’s motives. Recently senior Chinese authorities grumbled to U.S. visitors that Jiang got too little (and gave away too much) in June. The PLA wanted Clinton to lift the last remaining U.S. sanctions–mostly involving military hardware–imposed after the 1989 Tiananmen repression. ““We thought Clinton would have more “deliverables’,’’ says a Chinese official, using the term that sherpas from both sides had employed before the summit. The uncertain partners have a chance to turn things around if Prime Minister Zhu Rongji visits the United States as scheduled this spring. He is known as a man Washington can do business with–and at this point each side needs just such men.