ON May 2, a Chinese Long March 2C rocket blasted off into space without a hitch. The booster lofted two U.S. Iridium satellites into space and carefully sent each on its way using state-of-the-art satellite- dispensing technology. The satellites, made by the Motorola Corp., are part of a global constellation that in a couple of years will become a worldwide cellular-telephone network. The technology for Iridium was developed under Ronald Reagan's Strategic Defense Initiative.

So, it seems that the Clinton Administration has finally found a practical application for the Reagan Administration's anti-missile program: improving Communist China's rockets. China's once-unreliable Long March booster was vastly improved with the help of U.S. satellite companies under the Clinton Administration's liberalized export controls. According to the Pentagon, the technology that improved the Long March has also made China's Dong Feng series of strategic nuclear missiles more lethal.

Nothing better illustrates the Clinton Administration's attitude that the business of American foreign policy is first and foremost business than these technology exchanges with China. The story of the American role in improving Chinese rocketry -- which has begun to emerge in reports in the New York Times and in my own dispatches in the Washington Times -- features high-flying corporate interests, dubious bureaucratic maneuvering, special treatment for campaign contributors, and, above all else, strategic myopia. No other Clinton scandal will produce fallout as long-lasting or as potentially dangerous as the fallout from this one.

Flash back to February 15, 1996. Another Chinese Long March rocket was not so successful. Less than 30 seconds after it was launched from a pad in southern China the booster exploded along with a $200-million American satellite. A team of scientists from Hughes Electronics Corp. and Loral Space & Communications Ltd. -- the owners of the satellite -- launched an accident investigation. Their analysis of the problems with the Chinese booster included numerous recommendations on how to avoid such costly mishaps in the future.

The team produced a highly technical report identifying an electrical glitch in the flight-guidance system as the cause of the crash. The report also identified other weaknesses in the rocket. The American experts apparently never bothered to check with the State Department to see if the technology they were sharing with the Chinese was embargoed, or whether exporting such dual-use knowhow required an export license. Several months later, they ``turned themselves in'' to the State Department, according to a U.S. Government official familiar with the incident.

The Pentagon launched an investigation of the matter, and its final report, labeled ``secret,'' came to this stark conclusion: ``United States national security has been harmed.'' How? According to Rep. Dana Rohrabacher (R., Calif.), Chairman of the House Space and Aeronautics Subcommittee, U.S. expertise has ``perfected'' China's Long March rockets, which are identical in design to Chinese strategic nuclear missiles.

``Engineers from Loral, assisted by engineers from Hughes Electronics, and at the direction of their superiors, charged forward to correct the problems in the Long March,'' Rohrabacher said in a floor speech on April 30. ``It seems what happened was a sterile, coldly calculated decision to fix these problems with no consideration of the national-security implications to the United States.'' Rohrabacher saw the technology transfer as a betrayal. ``Chinese missiles blowing up on launch is a good thing,'' he says. ``We should not be making their missiles better.''

How is it that U.S. corporations and a Communist government find themselves sharing a vital interest? Instead of spending hundreds of millions of dollars per launch on U.S. boosters, satellite manufacturers such as Hughes, Loral, Motorola, and Martin - Marietta (the latter two now combined in Lockheed Martin) sought to use Chinese boosters costing just $25 million to $85 million a launch. However, as the tradeoff for being comparatively cheap, the Long March boosters were completely unreliable; three or four of them would fail for every successful launch, resulting in huge insurance costs for American satellite makers.

So the interest of American companies was to get as much technology to their Chinese partners as possible, and they have made a sustained push to do so. Great Wall Industries, which handles all deals for China's space launch services, was sanctioned twice by the U.S. Government in 1991 and 1993 for selling M-11 missiles to Pakistan. The penalties were imposed under U.S. law requiring the imposition of sanctions for violations of the 29-nation Missile Technology Control Regime, which restricts sales of missiles with ranges greater than 186 miles and warheads heavier than 1,100 pounds.

Sensitive technology transfers were banned under some 40 different economic sanctions imposed on China after the 1989 Tiananmen massacre. Beginning in the early 1990s, satellite makers began receiving waivers of the sanctions.

Henry Sokolski, executive director of the Nonproliferation Policy Education Center in Washington, D.C., explains that in 1994 the Pakistan-related sanctions were lifted ``in no small part because of U.S. satellite manufacturers' desire to have unfettered access to China launch services.''

``Starting in 1993,'' says Sokolski, ``Hughes and other satellite makers who wanted China to launch their payloads made every effort to limit the possibilities of error.'' This meant sharing ``some of America's most sensitive missile technology.'' Included in the U.S. efforts were discussions with the Chinese Academy of Launch Vehicle Technology on the sufficiency of the altitude-control system on the Long March launcher, examinations of rocket-fuel capabilities, and test firings of a kick motor for the booster's last stage. U.S. companies were also involved in giving China the same technology used to launch MIRVs (multiple, independently targeted re-entry vehicles), hydra-warheads that vastly increase the firepower of nuclear missiles.

There have been many instances of this business-driven foreign-policy obtuseness:

-- Rep. Rohrabacher says an aerospace executive from Motorola told him that the company was involved in ``upgrading'' Chinese space boosters/missiles under a ``national-security waiver signed by the President.'' According to Rohrabacher, Motorola supplied rocket-stage separation technology. And Motorola helped the Chinese learn how to ``dispense'' satellites into orbit -- the MIRV technology.

-- According to Sokolski, Martin - Marietta also asked the U.S. Government for permission to exchange information with China on upper-stage control systems, used to separate and ignite the sections. ``These same control functions are also critical to China's perfection of an accurate multiple independently targeted re-entry vehicle for its new solid-fuel rocket system,'' he says. It is not clear whether the technology was approved for export.

-- In 1993, according to Sokolski, several U.S. satellite makers asked the Commerce Department if they could share coupling and load-analysis technology. That technology is crucial for assuring that a missile ignites, that its stages separate, and that its engines cut off in ways that will not shatter sensitive satellite payloads. Again, Sokolski says, ``This would not only help assure the safe, efficient launching of the most sensitive civilian payloads, but also of complex MIRVed military systems.''

And so the Long March has been perfected, or at least its failure rate has plummeted. At what price? According to a report of the Senate subcommittee on proliferation, the kind of space technology China has acquired from the United States is just what is needed to make an intercontinental ballistic missile: stage coupling for extended range, accurate guidance, and system integration. And, as I first reported in the Washington Times, the CIA has concluded that 13 of China's 18 long-range strategic missiles have nuclear warheads aimed at American cities. Loral's gain could one day be L.A.'s pain.

Rather than putting the brakes on this transfer of technology, the Clinton Administration has been speeding it along. High-tech executives in Silicon Valley are a key Clinton constituency -- and source of funds -- and so he has been careful to foster their overseas business. Silicon Valley's defense-related firms don't have the same attitude as old-line defense contractors, who were part of the defense establishment and did business in an atmosphere of Cold War patriotism. The culture of Silicon Valley firms is post - Cold War, and its firms are ready to deal.

They found their match in the Clinton Administration. In 1993, the Administration undertook a major reform of U.S. export controls; by 1995, it had nearly dismantled our national-security safeguards. The first to go was COCOM, the Coordinating Committee for Multilateral Export Controls, a group of Western nations that had successfully limited flows of weapons technology to the West's enemies, especially the Soviet bloc and China. The Clintonites worried that this process gave too much control to the Pentagon, which is always wary of arming our adversaries.

Although the Administration promised to replace COCOM with a new arms-control regime, nothing comparable has been established. The 1996 Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies allows each member nation to determine whether an export may proceed. COCOM required a consensus among the member nations before an export could take place; Wassenaar requires only a report after the fact -- essentially a perpetual green light for any and all technology exports.

Meanwhile, in a telling move, the Clinton Administration in March 1996 shifted authority over licensing satellites from the State Department to the Commerce Department. Without State involvement, ``we're not even informed,'' complains one staff member of the Senate Foreign Relations Committee. The go-go Commerce Department has been blindly moving ahead with the decontrol of all manner of technologies, from supercomputers to satellites. William Reinsch, the undersecretary of commerce for export administration, bragged in a recent speech that satellite-technology transfers were an example of helping U.S. business while protecting national security.

The missile revelations are only part of the indictment of the Clinton Administration's handling of China. The Administration's announced policy of ``engagement'' seems to have become a perpetual excuse factory, as every negative action taken by the Chinese -- selling missiles to Pakistan, missile technology to Iran, and nuclear equipment to both states -- is explained away as ``inconclusive'' or considered solved with the latest hollow Chinese promise not to repeat the offense. Secretary of State Madeleine Albright recently spoke of a new ``strategic partnership'' with China. But she won few concessions on either weapons transfers or human-rights abuses during her recent visit to China.

Now the White House is scrambling to come up with something for President Clinton and Chinese President Jiang Zemin to do at their June summit meeting in Peking. According to a memorandum written by White House National Security Council staffer Gary Samore, Washington has proposed a ``missile deal'' to be concluded at the summit. If Peking will agree to join the 29-nation Missile Technology Control Regime, which bars exports of missiles and related technology to non-members, the Administration will issue a ``blanket waiver'' of Tiananmen-inspired restrictions on space-launch cooperation with China. The Administration also will ``speed up consideration of MTCR-controlled exports'' to China. ,p. After this memorandum was published in the Washington Times, State Department officials denied they have any plan to share missile technology, claiming that only knowhow related to peaceful uses of space will be exchanged. And the Administration always maintains that there are strict safeguards against technology's ``leaking'' into Chinese military applications. But the Pentagon's assessment of the Hughes/ Loral cooperation on the Long March makes clear that valuable missile knowhow has already been shared.

In any case, according to U.S. officials, Peking's response to the U.S. proposal that China join the Missile Technology Control Regime and stop selling dangerous knowhow to Iran and Pakistan was curt: No thanks. So will the summit offer agreements on any real issues? Not likely. Unless, as some critics expect, Washington offers yet more concessions in exchange for yet more hollow promises -- a continuation of the pattern of achieving arms-control ``progress'' by ignoring Chinese misconduct.

Meanwhile, Rep. Rohrabacher met late last month with top House leaders, including Speaker Newt Gingrich and National Security Committee Chairman Floyd Spence, and an investigation has been launched. Hearings could be held in several weeks.

``Nations [that] threaten the security interests of the United States should not be armed by America, nor should America help them arm themselves,'' according to a recent report by the Senate subcommittee on proliferation. ``America's government should be reducing the likelihood that the world's foremost proliferators are engaging in this activity with the assistance of the United States. The fight against proliferation must include self-discipline at our own borders.'' That would have seemed merely a matter of common sense -- until the age of Clinton.

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