Thousands filled the streets in protest and welcome as Chinese Premier Zhu Rongji gave a speech downplaying U.S. trade deficit concerns at MIT's Kresge Auditorium yesterday.

Zhu's speech began just before 11 a.m., but demonstrators began to gather at 6 a.m. outside. The crowd grew to more than 4,000 by late morning, according to the MIT news office.

Zhu's visit to MIT was the last stop on his nine-day, six-city U.S. tour expected to draw protests of China's human rights abuses.

The demonstrations were lively as protestors and Zhu's supporters squared off. According to Cambridge Police Department spokesperson Frank T. Pasquarello, the police made three arrests for disorderly conduct.

In Zhu's address, he told Americans not to be concerned with economic competition as China attempts to become part of the World Trade Organization.

"Don't make such a big deal out this trade deficit," Zhu said. "This is not such a serious problem."

The U.S. estimate of $57 billion, is bloated, he said. According to Zhu, the deficit is actually closer to $21 billion.

He explained the difference by saying that Chinese manufacturers often assemble from raw materials and then export the goods. Thus, many Chinese exports to the U.S. "represent a transfer of exports to the U.S. by these other countries and regions," he said.

After speaking at MIT, Zhu attended a luncheon in Boston with a group from Harvard including President Neil L. Rudenstine, University Marshall Richard M. Hunt and Ford Professor of the Social Science Ezra F. Vogel, also director of the Fairbanks Center for East Asian Studies.

While Vogel praised Zhu as a "very effective communicator," he said that his equivocal responses on human rights concerns, including the recent sentencing of political dissident Xu Wenli, are indicative of internal political pressure.

"In answering those questions, he has to answer to the political right at home. I think those answers have been less than satisfactory for Americans," Vogel said.

Although the most visible demonstrators were human rights protestors burning several Chinese flags, most at yesterday's speech welcomed the premier.

Lin Liu, a senior at Tufts University originally from Beijing, said he supported his country by waving two flags, Chinese and American.

Liu was part of the Tufts Association for Chinese Students, which sent 40 students to the rally.

Just a few feet away, Sonam Palder, a native of Tibet, wore a bright yellow vest proclaiming " China Out of Tibet" as he wove the Tibetan flag.

In 1956, the Chinese Army killed Palder's grandmother, grandfather and his aunt, Palder said. He fled Tibet in 1959 to India while his father was still in prison.

He still remembers when the Chinese Army visited his home right before they fled, searching for information on an escaped dissident. He was seven years old at the time.

"They pointed a gun at my mother, who yelled 'My God, I don't know.' They kicked her to the ground and said 'Where's God? Show me God,'" Palder recounted.

A Harvard student who asked not to be named stressed the importance of education.

"Once people have knowledge, you can gain freedom. You don't know what freedom is when you don't have an education," she said.

In fact, she said, education is more important than a free democracy.

"I don't mind who controls the government; the most important thing is education."

Most demonstrators were from the Boston area, although they came from all over New England to attend Zhu's visit.

Over 50 students bussed down from the University of New Hampshire (UNH) to welcome the Chinese p premier.

Xiang Qu, a second-year UNH graduate student, expressed his sentiments with a red and yellow sign reading "Splitism Go To The Hell."

"We just love our country; we want to keep it united. There's no way Tibet should be liberated," he said.

"The American people should go to Tibet to see what it's like. I think most of them get paid to protest against the Chinese government."

Others, like Yong Zhou, a fifth-year Boston University graduate student who had a close friend shot at the Tiananmen Square massacre in 1989, were more critical.

"We still have a lot of room for progress. I feel sorry for what happened," he said.

With 10 years hindsight, however, he said it's time to move on to more immediate issues, like the economic crisis that took Asia in its grip in July 1997.

"It's hard to talk about democracy on a hungry stomach," he said.