ECONOMICALLY BACKWARD and militarily defensive, China last week returned to the American consciousness. With United Status Secretary of State George Studtz's visit, questions of how to approach Sinc-American relations surfaced as well. Is China the next great frontier for American enterprise, a weapon to wield against the Soviets, or communist threat to be deflected it may instead be of less consequence than supporters or opponents assume.

President Reagan has never allowed the Chinese a large place in his affections. He has generally subscribed to the communist-threat idea, and the Chinese have reciprocated by portraying him as insensible to the "obvious" importance of friendship with history's most populous nation. Their embarrassing of vice-president candidate George Bush during his 1980 visit with warnings about "two China" policies was an appeal to those who have accepted the notion of China's significance for American policy, including, apparently, the journalists who gave the incident prominent coverage.

Until recently, thoughts of China seemed primarily to stimulate greed in Americans. Businessmen's dreams featured visions of one billion users of Ivory Soap and prophylactics. A National Geographic article in the 1920s spoke of the Chinese as demeaned outlets for American production. Unfortunately, public evaluation of such possibilities has lagged greatly behind that of businessmen, most of whom have come to realize that the Chinese consumer is likely to remain overwhelmingly rural and impoverished.

Even while banks and industry have been losing their enthusiasm for the Chinese market--following Chinese cancellation of construction contracts with both the U.S. and Japan--the ranks of Real-polltakers believing in China's military importance have grown. These are the men who speak of the Strategic Triangle and of Playing the China Card. They think of China narrowly, in terms of its usefulness in deterring the Soviet Union. But as things stand, the military counterbalance is largely an illusion. Using its defensive strategies and mass mobilizations, the Red Army may be adequate for China's own purposes but can pose no offensive threat to the Soviets. Even Vietnam, smaller and poorer than China, was able to hold off a Chinese offensive in the late 1970's in Kampuchea.

SENATOR BARRY GOLDWATER stands at the head of a group holding a third attitude--that Taiwan has all the strengths that Red China is missing, and that U.S. Taiwanese relations are too important to be jeopardized by ties with the mainland. They argue that the communists are erratic and untrustworthy--too unreliable to be allies. Yet such an attitude neglects the weight good Sino-American relations have already had in world affairs--such as the force China lent to world outcry against the Soviet invasion of Afghanistan. In addition, denigrating the importance of mainland China ignored the possibility that its natural resources and fairly well-controlled masses could propel it to a position of world power.

Nevertheless, many such criticisms of Communist China are valuable in deflating the overblown Western image of the mainland's usefulness. Consider, for example, the claim that the communists intend the West no good. Recent ultra-nationalist sloganeering about Hong Kong and Taiwan has in fact flourished. The implementation of the new constitution has shown the moderate Deng Xiaoping's power to far from uncontested--and in the struggle after his inevitable removal or death, domestic concerns could render all predictions of a "pragmatic" foreign policy worthless. The communists have not brought stability to China. Domestically, in 35 years they have introduced four different concepts of communism, four constitutions, and three wrenching changes in government. Abroad, China was at one time a close ally of the Soviet Union and of Vietnam, but has since invaded both. Formerly on Albania's side against Yugoslavia, it has now reversed position.

Secretary Shultz has now returned, speaking of communication and the value the Chinese put on honesty in negotiations. But rather than getting carried away, Americans should first appraise, sensibly and modestly, what such negotiations, or indeed China itself, can achieve. China is still unstable, militarily retarded, and economically primitive. Its strengths will have to be sought elsewhere than commonly imagined in the nation of America's dreams.