CHINA TODAY THE CHINESE are enjoying what appears to be a relatively unfettered flow of the arts, including literature. Since 1976, when the Gang of Four was overthrown, countless tales, both from the traditional classics and from modern literature, have been restored to the positions they enjoyed before the Cultural Revolution declared them bourgeois and romantic. Bookstores everywhere are corwded, and mobile bookstores, much like American bookmobiles, are being sent to the countryside.

Although the Ministry of Culture in Peking still controls all publishing through its bureaus in each province, increasingly diverse books are beginning to reach the market. Anyone with talent can apply to a provincial bureau for permission to publish, but only those works whose politics are acceptable to the party reach the bookstore racks. The real difference between now and 1976 appears to be the definition of what is acceptable.

ba Jin is back. Banished during the Cultural Revolution, this famous short story writer has resurfaced in the August 1979 issue of the magazine Chinese Literature . He is represented by a short story, "The Heart of a slave," first published in 1931, and excerpts from his novel, Autumn in Spring," published in 1932.

Also back on the list of acceptable reading, but not widely available, are the classics. Although complete copies are difficult to locate, sections of two early Taoist writing, Lao-tzu's "Tao Te ching" (circa 600BC) and "The Works of Chuang-tzu" (circa 400 BC), have resurfaced in school textbooks, giving Chinese students an opportunity to read them again. Confucius is still in disfavor, but his writings are also available.

Some authors' works survived the Cultural Revolution and have remained on sale to the public. The beloved short story writer Lu Hsun (1881-1936) seems as popular as ever, and his stories are now available in English through the Peking Foreign Language Press. His popularity is well earned. The stark realism of his best stories, such as "A Madman's Diary," (1918) is reminiscent of Zola's Germinal . Lu Hsun chose a career in literature as a weapon against the old society of pre-revolutionary China and is now considered the founder of modern Chinese literature.

Although it is probably more widely read and consulted in the United States than China, the I Ching has also survived the Cultural Revolution. But then the I Ching knows how to survive. During the reign the Emperor Shih Huang Ti(circa 220 BC), who built part of what became the Great Wall, all books were ordered burned in a conscious effort to wipe out all memory of the past. The I Ching , already considered a mere table of diviantion, was exempted. Its popularity now seems restricted to the older generation of Chinese.

There is no censorship of foreign works, but they still are not generally available. A sign at a Changsha bookstore announced the store would soon be bringing in more books from abroad in an effort to better serve the people. In the meantime our Chinese friends felt free to accept copies of Bernard Malamud's The Fixer , Mark Twain's Huckleberry Finn and Fran Lebowitz's Metropolitan Life .

Judging from the prominent and expansive displays of political books in every bookstore, the Chinese best sellers are probably the works of Marx, Lenin and Chairman Mao. Customers throng to the political books and to the mathematics, scientific, trade and language textbooks. The fiction sections are generally less crowded. Perhaps that is a reflection of Chinese pragmatism, or perhaps supply has simply not caught up with demand given the seemingly small selection of fiction titles. Many books are undated, and we were unable to determine when they had been published or how often new books appear. On the other hand, even the relatively remote villages we visited had bookstores stocked with the same range of books we found in the largest Peking stores. Books are also fairly cheap throughout China -- generally less than 75 fen (50 cents) for a paperback novel. Almost invariably fiction is published between paper covers, usually colorfully illustrated, while hardbacks are reserved for technical manuals.

Young people's fiction is very didactic, usually featuring heroes or heroines that exemplify party ideals such as bravery and loyalty. An example is Wild Girl, by Wren Da Shin, published in Shanghai and selling for 70 fen. Popular adult fiction also carries a moral message. For example, the 105-page novel My Family, by Tao Chun, extolls the joys of family life. Published in Peking, it sells throughout China for 24 fen.

Frequently shelved with the fiction are histories and biographies. Typical titles are Recalling the Long March, a group of short accounts by various authors including Liu Po-Cheng, and The Story of Marshal Holun, a biography published in Hunan province. Pre-Liberation history and biography seem rare.

Like writers everywhere, Chinese authors often have trouble supporting themselves through publication of their work. Many such as Lu Sing Wu, a popular short story writer from Peking are employed as teachers. Represented by bureaus in each province, the Ministry of Culture is the only publishing house to which a writer can send his manuscript. If accepted, the book is published and distributed throughout the nation by the bureaus. Writers received a commission from each sale to supplement their income. Still a mystery is whether the talented young novelists of China remain inhibited by fears instilled during the recent repression, or if they are producing fully creative fiction that will one day burst into print. If the fine quality of contemporary dance and music in China is any bellweather of the state of the literary arts, we hae every reason to be optimistic.