(FORTUNE Magazine) – DESPITE the bloodshed that has stained China in recent weeks -- and despite continuing political ferment in the Soviet Union -- U.S. chief executives view both nations as vast, potentially valuable markets for American goods and services. Moreover, CEOs believe both economies will evolve over the next five years into more open, market-driven systems. This evolution may take longer than previously thought, or may come at the cost of fratricide, they say, but that makes it no less inevitable. These findings come from the latest FORTUNE 500/CNN Moneyline CEO Poll, conducted by the independent opinion research firm of Clark Martire & Bartolomeo. The respondents, 183 CEOs of FORTUNE Industrial 500 and Service 500 companies, were interviewed between May 30 and June 7. Chinese troops began their crackdown on students in Beijing's Tiananmen Square in the middle of that period, but that scarcely altered the CEOs' outlook for the long term. ''Recent events haven't changed our feelings about the long-run potential of China,'' says Allen Jacobson, chairman of Minnesota Mining & Manufacturing. ''They're certainly a setback. We feel very sad about what has happened, for its effect on the students involved, for how it may slow modernization of the economy, and for how it changes people's perception of doing business there. But we're not changing our plans. I'm still optimistic.'' William Esrey, head of United Telecommunications, a long-distance and local phone company, agrees: ''The conflict hasn't changed my fundamental thinking. It's a temporary blot that highlights how fragile building new relationships can be.'' He feels the immediate effect of the unrest will be to diminish U.S. firms' willingness to make deals in China without guarantees up front -- a change that would slow development in cash-poor China. Why are business leaders upbeat? Under the economic reforms of the past decade, China's GNP has been growing more than 10% a year, and some provinces have seen living standards double. For these reasons Sara Lee chief John H. Bryan Jr., like many respondents, feels reform's momentum has grown too powerful to be stopped: ''I can't imagine that the administration that brought the reforms this far is going to say, 'Oh hell, let's move back to Maoism.' '' He intends to proceed with efforts to establish Sara Lee brands in China, where the company sells cookies, and in the U.S.S.R., where it sells coffee in luxury shops that accept only hard currency. American Brands CEO William Alley bases his long-term optimism on the present crisis itself, which he expects to precipitate Chinese government decisions that might ordinarily take years. ''Many of us have experienced some degree of holding back as to how far we'd go in doing business with China,'' he says. ''Our hope is this will clear up some of the feeling of uncertainty. When you start to make an investment in a country, you're looking for reliability. There's an element here of their having to sort out their own house.'' So much for optimism. In the short term, say CEOs, U.S. firms in China should rig for heavy weather. After the chaos that began June 3, respondents became markedly grimmer about near-term prospects. While most still figured that China would become a more attractive market eventually, the percentage of CEOs who expected China to become less attractive jumped from 5% before the crackdown to 17% after. Many of those interviewed responded that they thought China would become less market oriented in the next year. Even more said China's brush with civil war had caused them to adopt a wait-and-see attitude or to put projects on hold. Charles Hugel, chairman of Combustion Engineering and the U.S.-China Business Council, a group of businessmen, says, ''China will sort itself out and get back to where it was before.'' But in the meantime, he cautions, ''companies that require central government approval could have problems short term.'' Hugel has experience not just with the Chinese but with the Soviets as well, becoming an every-other-month commuter to Moscow to look after an instrument-manufacturing joint venture. Like most poll respondents, he views the situation in the U.S.S.R. as fundamentally different from that in China, where economic reforms have raced ahead of politics. In Russia, Gorbachev has reformed politics without doing much to democratize the economy. Respondents didn't see China's troubles as rubbing off on the Soviet Union, and 93% believe Russia will become more market oriented in the next five years. How will it get there? The executives said making rubles convertible to dollars would help. ''Convertibility of the ruble is a subject under much debate in the U.S.S.R.,'' says Hugel. ''There are hundreds of different conversion rates within the Soviet Union. The government has to deal with that problem before it can deal with matching the ruble to the rest of the world.'' Esrey of United Telecom wants to see the Soviets shift more resources from the military to the civilian sector. Soviet Premier Nikolai Ryzhkov last month seemed to take a giant stride in that direction when he announced military spending might be cut by as much as a third by 1995 in an effort to spur the domestic economy. Jack MacAllister, CEO of US West, which is looking into laying fiber-optic cable the length of the U.S.S.R., feels confident the Soviet government means business. ''The Soviets are deadly serious about building a market-based, free economy,'' he says. ''They could have made it very difficult for us, but they've given us all the information we needed. Here are a people who have decided they want to join the world.''

Q In light of recent political events in China and the Soviet Union, do you expect these countries to become more attractive markets, less attractive, or not to change?

A CHINA SOVIET UNION CEOs surveyed before crackdown After More attractive 55% 53% 89% Less attractive 5% 17% -- No change 23% 9% 10% Not sure 17% 21% 1%

Q Do you expect the Chinese and Soviet economies to be significantly more market oriented or less market oriented five years from now?

A CHINA SOVIET UNION CEOs surveyed before crackdown After More market oriented 81% 73% 93% Less market oriented 2% 4% -- No change 4% 6% 3% Not sure 13% 17% 4%

Q What changes could the governments of the Soviet Union and China make that would most attract you to do business in these countries?

A CHINA SOVIET UNION CEOs surveyed before crackdown After Reduce bureaucracy 16% 19% 18% Increase political stability 15% 21% 5% Allow conversion of currency 14% 9% 25% Make government more democratic 13% 9% -- Increase the society's openness 13% 9% 17%