The Washington-Beijing relationship was already tense enough when the Clinton Administration allowed congressional pressures on Taiwan to jostle its larger China-policy goals. "Prepare for difficult times," an Administration official said darkly. "This is another nail in the coffin of China policy." Beijing's ultimate reaction could range from trade retaliation to rapprochement with Iran to, perhaps most troubling, noncooperation with U.S. efforts to resolve the standoff over North Korea's nuclear-weapons program.

Before last week, Washington insisted the ties with Beijing had actually steadied over recent months. "We try to maintain momentum, acknowledging that it will be a sweet and sour relationship," says...

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