FOR the first time since 1990, the European Union has failed to agree on a resolution to be put to the United Nations Commission on Human Rights in Geneva condemning China's human rights record. France, Germany, Italy and Spain refused to continue the annual castigation of China on the grounds that confrontation was less likely to achieve progress on human rights in China than dialogue. The Netherlands, which holds the current EU presidency, was unable to table a consensus resolution.

"It was bound to happen sooner or later," said a European diplomat in Beijing. "In 1990 and 1991, after Tiananmen Square, there was consensus. Then it frayed a bit and as far back as 1994 there were voices saying it was ridiculous to keep it up. Now a consensus has failed to form in a catastrophic way."

"This year it finally unravelled," said another European observer in Beijing. "The untold story was that there were serious cracks behind the scenes since 1994. The French and the Germans felt their commercial interests were held hostage to moral concerns. China means huge in vestment opportunities and big orders. The French argued hard last year that it was tactically of little value to confront China in an international forum."

The issue has caused an exchange of what one European source described as "amazingly sharp" cables among the EU member states, particularly between the Dutch and the French.

In fact, the attempt to censure China never succeeded. It fought off the annual human rights resolutions at Geneva by tabling "no action" motions, and will do so again. But the tabling of the resolution itself has always been deeply offensive to the Chinese leadership.

"It put them in with Iran and Iraq," explained another China expert. "They saw it as the European Union being pushed by the Americans to produce an anti China resolution and they believed that it was not about human rights but about politics."

The occasion, therefore, always produced bitter exchanges in Chinese EU relations when it came around every April. This year, Beijing's acidity is concentrated on Denmark, which has tabled its own resolution, co sponsored by other EU countries, including Ireland, condemning China.

The Nordic country's action has caused fury in Beijing. "Denmark will end up the big loser," warned a Foreign Ministry spokesman, Mr Shen Guogfang, pointing out that it could suffer in political, economic and trade matters in its relations with China.

The EU mess over human rights highlights the dilemma facing policy makers the world over in dealing with the issue in a country which is fast becoming an economic superpower. It raises the question whether or not it is, in fact, the most effective approach to condemn China in an international forum, and if not, how to balance the risk of losing out on trade with the moral satisfaction of taking a stand.

In Ireland's case there is also the possibility that taking a stand could antagonise Beijing at the very time when the State might be seeking vital Chinese support for the appointment of the President, Mrs Robinson, as UN Commissioner on Human Rights.

China has not indicated its position on a Robinson candidacy, and it does not have a veto, but Beijing could influence much Third World opinion if it cared to do so. For Ireland to act as France did to enhance Mrs Robinson's prospects by appeasing China would be seen as a cynical manoeuvre, even fatally damaging in the US where it counts, but it would be ironic if a national stand on human rights became the issue which jeopardised the chance of an Irish person leading the world's most powerful human rights body.

Denmark - and Ireland - put the moral imperative first. "Ensuring respect and protection for human rights and fundamental freedoms has consistently been a high priority in Irish foreign policy," explained Ireland's ambassador to China, Mr Joe Hayes, yesterday.

"In general terms, Ireland has sought to reach a balanced assessment which recognises certain positive developments such as continuing reform of the Chinese legal system . . . while expressing concern at violations of human rights and fundamental freedoms by local, provincial and national authorities.

"We are concerned, for example, about tile treatment of political dissidents in China, the excessive use of capital punishment, restrictions on freedom of assembly, of expression, and of religion, as well as the need to improve throughout China the impartial administration of justice." These were "legitimate concerns" to raise in bilateral contacts and in international forums.

Whether or not Danish - or Irish - enterprises involved with China would see it that way is another matter. Without EU unanimity, companies in the countries taking a stand risk being singled out for retaliation, as Mr Shen warned yesterday - though Chinese anger is more often restricted to words.

The split in Europe is a huge victory for Beijing's world wide lobbying on the human rights issue, and for its increasingly sophisticated arguments asking for dialogue over confrontation.

These were put in Beijing yesterday by a panel of human rights academics, one of whom, Prof Liu Hainian, President of the Law Research Institute of the Chinese Social Science Academy, insisted that China had made great progress in 20 years in human rights and democracy and was committed to further evolution in the area.

Tabling the resolution was counter productive and did not tab into account the "historical" progress being made or the different views of what human rights priorities should be, he said. The areas concerning protection of human rights that need to be resolved in China included "65 million people with no access to basic needs in terms of food and shelter".

No country was perfect in its human rights record and the enforcement of many laws in China was far from being satisfactory, he acknowledged. But "in the process of resolving the problem of human rights, it is better to sit down and talk calmly instead of making accusations and shouting. History shows that that has got us nowhere. China has a history of being bullied by Western powers and that should be factored into your review of the situation."

Prof Wang Jiafu, a law official of the National People's Congress, said: "Put yourself into the shoes of the Chinese people and you have a better understanding." In the 1950s they had no legal code, in the 1960s the legal system was damaged, and only in 1978 did they begin to make progress towards perfecting a criminal code.

Now there were direct elections at grass roots level and there were multi candidate elections for government posts. "Very rigorous" legal constraint had been brought in against abuses such as torture. Of 70,000 cases taken against government and police officials for abuse of rights last year, 28,000 were successful. Some 800,000 civil cases were taken by peasants with a high rate of success.

MANY long term students of Chinese affairs would agree that things are improving in China, that the atmosphere is much more easygoing now than some years ago - except for political dissidents - and the lot of the Chinese people is improving.

The problem remains, however, that on political dissent, the Chinese give no grounds. China jailed a dozen prominent dissidents in 1996 as part of a drive for stability that followed an easing of foreign pressure over its human rights record. Of these, a former student leader, Wang Dan, received the harshest sentence - 11 years - for conspiring to subvert the government. When his case was raised yesterday, Prof Wang gave the standard reply: "He was convicted and found guilty by a competent Chinese court.

In this area, east and west have made no progress either in confrontation or in dialogue. The rigid, legalistic attitude to jailed dissidents helps explain why the EU countries remained unified for so long, even as the memory of Tiananmen Square faded. "Until these cases are addressed," said the European diplomat, "there is no hope of the human rights issue going away."