Senior leader Deng Xiaoping told Secretary of State George Shultz Friday he is pleased with the progress of Sino-U.S. relations under President Reagan but urged an expansion of ties between the two nations.

Shultz, who arrived in Beijing from Hong Kong Thursday for a 44-hour visit, assured the 84-year-old leader that the outcome of this fall's U.S. presidential election will not harm American relations with China."During the term of office of President Reagan and during your tenure as secretary of state, Sino-U.S. relations have developed quite steadily," Deng said.

"I think we should take that relationship to a higher plane in the interest of peace and in the interest of the people of the world," he said. "After all, we are both big powers."

Shultz, who met with Deng for 75 minutes in the Great Hall of the People, said whether Massachusetts Gov. Michael Dukakis or Vice President George Bush is elected president, America will continue to pursue good relations with China.

"(I) have a very confident feeling that the relationship that has developed between the United States and China has broad bipartisan support and so we can expect real continuity in this relationship," he told Deng.

The two also discussed how to reconcile the competing factions in Cambodia in light of an announced Vietnamese troop withdrawal and peace talks scheduled for later this month, the official Xinhua News Agency said.

The agency provided no further details on the meeting.

China is a major backer of the Khmer Rouge, the strongest faction in the anti-Vietnam Cambodian resistance. Vietnam and the Hanoi-installed Cambodian government have demanded assurances the group, which seized power and began a brutal reign of terror in 1975, will not return to power.

Shultz received assurances Thursday from Foreign Minister Qian Qichen that China does not support a dominant role for the Khmer Rouge after Vietnam withdraws its troops and a peace settlement is reached, U.S. officials said.

Thursday, Shultz received a tepid response to a proposal for talks with Beijing on controlling the spread of ballistic missiles.

Shultz told Qian that Washington has agreed to consultations with the Soviet Union and allied Western nations on controlling the sale of ballistic missile technology and proposed similar talks with China, a senior U.S. official said.