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Room for China and Taiwan

When the People's Republic of China took over the ''China'' seat from Taiwan at the World Bank and the International Monetary Fund in 1980, it did so for valid reasons: It was the legal government of China and the representative of the Chinese people. Now China is again arguing that it - and it alone - is the sole legal government of the Chinese people and should thus replace Taiwan as a member of the 17-year-old Asian Development Bank.

The tiff that has broken out over Peking's membership in the bank is one of those sticky international questions which, with some deft statesmanship both in Washington and Manila, where the bank is headquartered, could be resolved without loss of face to either China or Taiwan. The Reagan administration has reasonably decided to support China's membership in the bank, which provides low-interest loans to developing Asian nations. At the same time, for understandable political and moral reasons, the US opposes the ouster of Taiwan. What is crucial is that the administration push its case for dual membership in as nonthreatening a manner as possible so that a compromise might be worked out.

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In the case of the World Bank and IMF, Taiwan was a member because the Nationalist (Kuomintang) government had been the legal government of China back at the end of World War II, when the two institutions were put together. Subsequently Taiwan lost the right to fill the China seat when the People's Republic became the legal government on the mainland. In the case of the Asian Development Bank, Taiwan was never the representative of all the people of China.

Would the PRC be willing to accept a dual status with Taiwan? The possibility should not be ruled out. It is a matter of how the terms of membership would be defined: China would be recognized as representing the Chinese people and Taiwan would be designated as a major economic power in Asia.

Such compromises have been reached in other circumstances, such as at the Olympic Games. And China and Taiwan do occasionally meet together in international forums. This coming weekend representatives from both China and Taiwan will take part in a meeting in San Francisco held under the auspices of the Association of Asian Studies.

It should certainly be possible to work out a compromise on the bank issue.

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