By PAUL LEWIS

UNITED NATIONS -- The United States appears to be heading for another clash with China, this time over a divisive World Bank development loan that would help Chinese authorities resettle tens of thousands of Chinese in regions traditionally inhabited by Tibetans and Mongolians.

The Clinton administration seems to be getting ready to oppose the resettlement plan when it comes before the World Bank's executive board for a final approval next month, though White House officials say no final decision has yet been made.

Private pro-Tibetan groups are lobbying against the project, which would spend $160 million to resettle 60,000 poor farmers from eroded hillsides in China's western Qinghai province to better lands about 300 miles farther west.

China and the World Bank see the plan as part of a joint campaign to alleviate rural poverty in remote areas by offering farmers the chance to make a better living and relieving population pressures in the areas they vacate.

But critics argue that moving these farmers, who are mainly Han Chinese and members of the minority Hui, Tu and Salar ethnic groups, will further erode the culture, language and social position of the Tibetan inhabitants of Dulan County in Haixi Prefecture, where the farmers are to be resettled and which is a designated Tibetan and Mongolian Autonomous Area. Tibetans are already in a minority there.

Qinghai province is outside the borders of the Tibetan region China annexed in 1959, but has traditionally been strongly ethnically Tibetan and is the birthplace of the Dalai Lama, the Tibetan spiritual leader.

Although Qinghai has been a province of China since the 17th century, critics see the proposed resettlements as part of a broader campaign by the Chinese authorities to weaken the national identity of Tibetan people under their control.

Asked about the project during an appearance before the House Banking Committee recently, Treasury Secretary Robert Rubin said, "We are enormously concerned about it," adding that the United States is "inclined to oppose it."

John Ackerly of the International Campaign for Tibet, a Washington-based organization fighting for Tibetan rights, said: "This relocation, which the World Bank now proposes to help finance, is part of a larger Chinese policy which is now the greatest threat to the continued existence of the Tibetans as a distinct people and culture."

In addition to further weakening the position of Tibetans in the region to be resettled, critics say the plan violates the World Bank's own guidelines, which state that indigenous ethnic minorities should "not suffer adverse effects from bank-financed projects and that they receive culturally compatible social and economic benefits."

"The proposed resettlement will make the indigenous Tibetans even more marginal than they are already," said Kate Saunders of the London-based Tibet Information Network, which first highlighted the dangers of the project.

Critics also argue that the scheme is part of a broader plan to establish the infrastructure needed to exploit the region's mineral resources, which would inevitably attract additional inflows of non-Tibetans. They also warn that in view of the many prison camps in the area, China might use prison labor on the project.

For the moment, the World Bank is standing behind the project. In a briefing paper issued last week it defends the resettlement plan as an integral part of its efforts to reduce poverty in China, which has already cut the number of rural poor from 280 million to 80 million over the past decade.

The farmers to be resettled, it argues, are "among the poorest people in the world, with incomes of about $60 a year," who only survive on help from the government and from relatives elsewhere in China.

But it admits that the resettlement would weaken the position of indigenous Tibetans and Mongolians in the area.

In Haixi Prefecture, the Tibetan percentage of the population would fall from 11.1 percent to 10.3 percent, while in Dulan County it would decline from 22.7 percent to 14 percent. For Mongolians the comparative declines are from 7.6 percent to 6.5 percent and from 14.1 percent to 6.7 percent.

Meanwhile, the number of Han Chinese in Haixi Prefecture would rise from 236,918 to 261,375 and in Dulan County from 27,977 to 52,434. But the bank says it has assurances from the Chinese authorities that prison labor would not be used in the resettlement project.

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Last updated: 31-May-99