A U.S. envoy left China for Japan on Tuesday, having set the scene for an October Sino-U.S. summit by clearing the air on Taiwan and announcing the addition of a Chinese separatist group to Washington's terrorism blacklist. U.S. Deputy Secretary of State Richard Armitage, whose trip coincided with a Chinese sweetener on missile exports, said earlier his talks on issues ranging from counter-terrorism, human rights and non-proliferation to Taiwan had been constructive.

"We spoke of opportunities and shared hopes for stronger relations in the future," Armitage told reporters on Monday after his talks. "On every issue these exchanges were constructive as well as candid."

Shortly after Armitage arrived in Beijing on Sunday, China published rules to tighten controls on missile-related exports, long a sticking point between the two nations.

Armitage later announced that the United States, which is keen to maintain the support of Security Council member China for its war on terrorism, had added the East Turkestan Islamic Movement to its list of terrorist organisations.

On Taiwan, a stumbling block in relations, Armitage reiterated Washington's official view that it "did not support Taiwan independence".

China said last month it was "seriously concerned" that the United States was warming to the island and called on Washington to halt military contacts and arm sales.

Armitage said statements backing legislation for an independence referendum by Taiwan President Chen Shui-bian on August 3 would not in any way interfere with the planned summit between Presidents Jiang Zemin and George W. Bush.

"It's good preparation for the forthcoming summit," said Dr Richard Hu, associate professor in the department of politics at the University of Hong Kong. "Differences will remain, but how much they talk about them will depend on the next two or three exchanges before the summit."

UNDERLYING TENSIONS

Despite clear evidence both sides want a good working relationship, differences spanning human rights, religious freedom, arms proliferation and Taiwan are never far away.

When Bush and Jiang met in February, they failed to agree on a plan to curb the spread of weapons technology from China to "axis of evil" states Iran and North Korea and differed over human rights.

Still, Sino-U.S. relations appear to have improved following a difficult first half last year after a U.S. spy plane and a Chinese fighter collided over the South China Sea and China held the U.S. crew for 11 days.

Chinese analysts say the two sides will use the meeting at the Bush ranch in Crawford, Texas, to stabilise relations in the months ahead.

But for China, the ability to maintain good relations could hinge on Washington's attitude towards Taiwan.

Bush has vowed to "do whatever it takes" to defend Taiwan and Washington plans to sell it submarines and other weapons.

Armitage said Sino-U.S. cooperation on counter-terrorism was forging ahead and both sides planned to have a second meeting on choking off funds to alleged terrorist groups. They would also hold talks on shipping container security, he added.

Armitage said he had told Chinese leaders on Monday Bush had made no decision on a U.S. invasion of "axis of evil" nation Iraq, a subject that has aroused deep concern in Beijing.

He declined comment on what Chinese leaders said on the subject and said Iraqi Foreign Minister Naji Sabri's presence in China appeared to be a coincidence.

U.S. Vice-President Dick Cheney argued on Monday for pre-emptive action against Iraq, citing mortal danger to the United States and saying critics of such a move were guilty of "wilful blindness".

PHOTO CAPTION

U.S. Deputy Secretary of State Richard Armitage is pictured at a news conference in Beijing on August 26. REUTERS/Guang Niu