The information reported in The New York Times was provided by an American spy in China citing unidentified U.S. sources.
U.S. officials have said that China built a neutron warhead in the 1980s using secrets stolen from the Lawrence Livermore National Laboratory in California. But a 1988 test of the weapon proved unsuccessful.
The spy's report suggested that Chinese operatives returned in 1995 to gather more secrets and solve design problems with the neutron bomb, which kills people with enhanced radiation while leaving buildings intact.
China has denied stealing any military secrets. President Clinton met with Chinese Premier Zhu Rongji on Thursday to discuss a number of topics, including security issues.
The Clinton administration has suggested that military espionage by China happened primarily in the 1980s.
A report in 1996 prompted an investigation, but American officials say they have found no evidence that China has produced an improved neutron bomb.
The report also came as U.S. officials were examining whether Chinese spies had stolen design plans of the W-88, America's most modern miniaturized nuclear warhead.
Wen Ho Lee, a suspect in the theft of W-88 information, was fired from his job at the Los Alamos National Laboratory in New Mexico last month.
He has not been charged with any crime because. The Times reports the FBI has not been able to establish any connection between Lee and the neutron bomb investigation.