By Charles Hutzler

Associated Press Writer

BEIJING, July 27 (AP) -- An American human rights activist charged with spying confessed to police that he falsified information in two exposes of China's penal system, the official Xinhua news agency reported today.

Harry Wu was detained June 19 crossing into China from Kazakhstan and was formally arrested July 8 for stealing state secrets and other criminal activities.

Wu has only been permitted to meet with a U.S. official once since his detention, on July 10 in the central city of Wuhan, and there was no way of ascertaining whether such a confession was made and if so, under what conditions.

His case is now in what the Chinese call the "investigative" stage, which usually entails repeated interrogation.

Xinhua reported that Wu told police he intentionally made errors editing two BBC documentary reports on forced prison labor and the transplanting of organs from executed prisoners.

In an indication of the case Chinese authorities may be building against Wu, the Xinhua dispatch contains accusations based on information reported in the documentaries: that they were shot with a hidden camera and that the filmmakers used false identities.

Wu confessed that he and BBC producer Susan Roberts posed as scholars, a couple or relatives of patients in need of transplants when they came to China in April 1994, Xinhua said.

China has not made public formal charges against Wu. Formal indictments are often not issued until close to the time of trial. That is also when defendants are usually allowed to meet with a lawyer.

Wu was arrested under China's State Security Act with stealing state secrets, a "counter-revolutionary" crime that carries a penalty ranging from three years in prison to execution.

The documentary on prison labor made it seem as if goods, including leather jackets and children's clothes, being sold on a street were made by prisoners in Xinjiang; that the market was located outside the prison and that half of the northwest region's exports are made by prison labor, Xinhua said.

"The actual conditions are not like this," Xinhua quoted Wu as saying. "This is wrong, untrue."

Wu admitted that the goods shown in the video were "clearly not export products made in the prison" and that the street was not outside the prison, Xinhua said.

As for the organ transplant documentary, Wu purportedly confessed that the staff at Huaxi Medical University in Chengdu, Sichuan, never said kidneys for transplants were from executed prisoners.

"None of the doctors told me the kidneys were from condemned prisoners," Xinhua quoted Wu as saying. "All said they were from" brain-dead patients.

He also reportedly admitted that scenes of graves shown in the documentary on organ transplants were those of local residents and not of criminals as reported. And he recanted the documentary's claim that a deal on a transplant operation was struck within three hours for $30,000, according to Xinhua.

Officials at the U.S. Embassy declined to comment, saying they had not seen the report. Chinese authorities are only allowing embassy officials to see Wu once a month, all that is required under a consular agreement.

The U.S. government has called for Wu's immediate release, and his detention has strained Sino-U.S. relations at a time when ties were already frayed by disputes over Taiwan, trade and missile sales.

Wu was born in China and spent 19 years in prison labor camps before emigrating to the United States.

He has returned several times to document the abuses of China's vast penal colony and has become an effective lobbyist in Congress.

Chinese authorities sentenced Wu to a labor camp for criticizing the Communist Party during a political campaign in the late 1950s, according to his biography.

Xinhua reported that Wu previously was punished for theft, embezzlement, trying to leave China illegally and seducing female students while teaching in a university.