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The United States and China continue to put their relationship to rights. This week, the two countries agreed to a deal that would provide compensation for the damage caused by the NATO missile attack last May on the Chinese Embassy in Belgrade and the angry demonstrations that followed in Beijing. The latest agreement is another promising development for the region. Cordial relations between the U.S. and China are essential to regional peace and prosperity. Unfortunately, the new mood may prove to be temporary: There will be ample opportunities for the opponents of rapprochement to shift public sentiment once again.

The missile attack on the Belgrade embassy infuriated the Chinese, many of whom refused to believe American assurances that it was an accident. Efforts to convince China that it was a mistake have slowly borne fruit, despite growing evidence that Beijing’s suspicions were indeed well-founded. Perhaps the leadership decided that they had milked the episode for all they could, especially after last month’s agreement on the terms of China’s admission to the World Trade Organization.

In August, the U.S. agreed to pay $4.5 million to the 20 Chinese who were injured and the families of the three Chinese journalists who were killed in the attack. Under the terms of this week’s deal, Washington will pay China $28 million in compensation for damage to the embassy, and Beijing will pay $2.87 million to the U.S. for damage to U.S. facilities caused by Chinese rioters following the attack.

The timing is auspicious. As the details were being announced, the new U.S. ambassador to China, former U.S. Navy Adm. Joseph Prueher, was formally presenting his diplomatic credentials to Chinese officials. Mr. Prueher is a curious choice. He was head of the Pacific Command from 1996 until he retired this year, which means that he was in charge when U.S. President Bill Clinton sent two warships to Taiwan after China fired missiles near the island in at attempt to intimidate Taiwanese voters ahead of the 1996 presidential election. That is why China originally made it clear that Mr. Prueher was not welcome when his name was first raised in connection with the post. But the changing international dynamic, as well as the former admiral’s reportedly friendly relations with People’s Liberation Army officers, altered the thinking in Beijing.

Although the outlook is improving, plenty of rough spots remain in the relationship. Solving the compensation question does not close out the Belgrade embassy incident. Chinese officials are still demanding that the U.S. conduct a comprehensive investigation into the bombing and punish those responsible. Beijing is unlikely to get much satisfaction on that count. Spines are likely to stiffen as the U.S. enters an election year.

Even without that complication, relations with China promise to be a focus of the campaign. Two issues in particular stand out. The first is the alleged spying at U.S. nuclear facilities. Last week, the U.S. arrested Mr. Wen Ho Lee, the nuclear scientist once accused of giving nuclear secrets to China. He is charged with mishandling classified information, a tacit admission that the U.S. cannot build an espionage case against him. The Ho case is a cause celebre in waiting: If the mood in Beijing swings again, spokesmen there will undoubtedly charge that there is an anti-Chinese campaign.

The second outstanding issue is approval of the WTO deal Mr. Clinton reached with Chinese President Jiang Zemin. As part of the package, the U.S. offered permanent normal trading relations with China and an end to the annual scrutiny of Chinese trade and human-rights practices. Both require congressional acquiescence, and that is by no means assured. China is becoming the most convenient focal point for virtually everyone dissatisfied with U.S. policy: human-rights campaigners, religious activists, defense hawks, environmentalists and labor supporters. It is an unwieldy coalition, but it has appeal for almost everyone. The question is, given that opposition and the approaching election, how committed to his deal will Mr. Clinton be?

There is little reason to hope that Mr. Clinton will rise above the fray. He pandered to labor in Seattle last month, even though he should have known a gesture of that sort would torpedo the trade talks that he had hoped would bear his name. Nor is there reason to be encouraged by his shift from China hawk during the 1992 campaign to supporter of “strategic partnership” once in the White House. Keeping the relationship on track will be doubly difficult as decision-makers in both Beijing and Washington check the prevailing political winds during the coming year.

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