By Phil Stewart

WASHINGTON (Reuters) - U.S. Defense Secretary Robert Gates heads to China next week looking to soothe strained ties with the People's Liberation Army, but long-held policies feeding deep suspicion on both sides may undermine that goal.

The visit from Sunday to Wednesday comes a week before Chinese President Hu Jintao's state visit to Washington, creating diplomatic momentum that U.S. officials hope will allow Gates to make headway on sticky security issues.

Those include a U.S. push for Beijing to take a more assertive stand on Iran, rein in North Korea and become less secretive about the faster-than-expected modernization of the Chinese military, the world's largest in troop numbers.

In some ways, Gates' visit to China may be a result of that momentum. U.S. and Chinese military ties were suspended through most of 2010, as Beijing protested President Barack Obama's proposed arms sale to Taiwan. His trip to China is the most visible demonstration that relations have normalized.

An aide to Gates said the defense secretary was optimistic about the visit, "especially because it comes in advance of President Hu's trip to Washington."

"This was something that the Chinese very much wanted to do in advance of (Hu's) trip. They want to get this relationship back on track and working in a positive direction," said Pentagon press secretary Geoff Morrell.

Perennial sticking points remain, with the United States and China at odds over arms sales to Taiwan, which Beijing considers a renegade province, and Chinese concerns about U.S. military operations near its shores.

"Unless there is going to be a (U.S.) policy change, none of those things is going to alter," said Dean Cheng at the Heritage Foundation, a conservative think tank, predicting the outcome of the trip may only be "some very nice photo opportunities."

CHINA'S MILITARY MUSCLE

Gates' agenda includes a meeting with Hu, top Chinese military leaders and a stop at the Second Artillery Corps, which commands China's sizable nuclear arsenal. He will then visit Japan and South Korea, the closest U.S. allies in the region.

Gates' predecessor, Donald Rumsfeld, also visited the Second Artillery Corps in 2005. But U.S. officials said that did not diminish the importance of Gates' visit.

"The secretary's trip is not about tourism and seeing someplace that's new. It's about achieving functional goals," said a senior U.S. defense official speaking on condition of anonymity."

"The Second Artillery happens to be the headquarters for China's strategic nuclear forces. If you want to talk strategic nuclear issues, that's where you go," the official said.

As its economy booms, China has significantly increased its military expenditures, and a faster-than-expected expansion of Chinese military muscle is drawing the ire of U.S. hawks who oppose planned cuts to the Pentagon's budget.

U.S. officials have noted quick advances in China's anti-ship ballistic missile program, which could challenge U.S. aircraft carriers in the Pacific. China may also be ready to launch its first aircraft carrier in 2011, faster than some estimates, and new photos indicate it has a prototype of a stealth fighter jet.

A naval intelligence analyst told Reuters the J-20 jet appeared to be designed to counter the U.S. stealth equivalents, the F-22 and the F-35.

"The U.S. is going to seek ways to adapt its defense posture in the region to adapt to Chinese capabilities," said Rory Medcalf, an international security expert at the Lowy Institute in Sydney, also citing Chinese cyber capabilities.

Analysts warn that as China's military expands its reach, the risks of potentially dangerous misunderstandings between the U.S. and Chinese militaries increase.

That bolsters U.S. arguments about the need for sustained U.S.-China contacts that can endure friction over issues like Taiwan, as opposed to on-again, off-again contacts that have characterized the relationship for years.

"There have been situations and incidents in the past where there's been a pressing need ... to be able to speak directly on relatively short notice with (Chinese officials)," the U.S. defense official said.

"We haven't had those mechanisms in place or where we've had those mechanisms, they haven't always been honored."

(Additional reporting by Ben Blanchard and Chris Buckley in Beijing; Editing by Peter Cooney)