In Tense Asia, US Juggles Carrots and Sticks Rising Concerns about North Korea, China Put Region at Top of Clinton's Foreign Agenda

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Chinese threats to attack Taiwan and North Korean preparations for testing a new missile that could hit Hawaii and Alaska have driven tensions in the Asia-Pacific region to the forefront of President Clinton's foreign policy challenges.

While acknowledging the gravity of both situations, American officials and analysts play down any danger that the United States, which has 100,000 troops in the region, will become embroiled in hostilities. They say Pyongyang is unlikely to test its missile and believe that Beijing will stop short of risking a military clash over Taiwan, as nearly occurred in 1996.

Yet uncertainty abounds. North Korea insists it has the right to test its missile. Chinese officials are reinforcing threats to halt Taipei's "evil splitist plot." Beijing is warning American experts and scholars that it is weighing military options to crush growing aspirations for independence by Taiwan, which the US is bound to defend.

As a result, analysts and US officials concede that at no time in recent years have frictions been higher in a part of the world whose stability is crucial to US security and the health of the global economy. In such a charged atmosphere, missteps and strident rhetoric will only heighten the potential for economic turmoil and military conflict, they say.

"A lot of the long-standing issues that have been causes for concern in the region are bubbling up to the front," says Scott Snyder, an Asia security expert at the US Institute of Peace, in Washington. Agrees a State Department official: "The whole situation has gotten pretty serious."

Two factors are complicating things for Mr. Clinton. The first is a regional arms race the US is itself fueling. On Tuesday, it signed an accord with Tokyo to develop a defense system against North Korean missiles, a move certain to anger China, which fears the resurgence of Japanese militarism. The US also continues selling arms to Taiwan, which Beijing has considered a rebel province since it became the refuge of nationalists who lost the 1949 Chinese civil war.

Beijing is beset by internal problems and sees itself as the target of defense ties the US is nurturing with Japan and other nations in the region. It is continuing a massive military modernization drive with Russian arms. North Korea - facing a more advanced South Korea and increased defense cooperation between Seoul, Washington, and Tokyo - is developing chemical and biological weapons to eventually use in long-range missiles.

A second complicating factor is American politics. Accused by congressional Republicans of being "soft" on the communist Chinese and North Korean regimes and failing to halt Chinese nuclear espionage, Clinton is under pressure to take tough stands, especially on safeguarding democratic Taiwan. …