JULIA PARADISE By Rod Jones Summit. 123 pp. $12.95

NEAR THE END of this astonishing -- and astonishingly compressed -- novel, the principal male character, a Scottish Freudian analyst practicing in Shanghai in the troubled year of 1927, experiences a moment of profound despair: "He felt that he had lived for nearly thirty-five years in this world and he had understood nothing."

A reader who falls under the spell of Julia Paradise for a few hours (it can be read in a single evening) or a few weeks (such is its imaginative power) might be forgiven for wondering how it is possible to live so intensely in a particular fictional world and yet emerge, like Kenneth Ayres, having "understood nothing." Australian writer Rod Jones' first novel is a brief tour de force of "glittering disorientation," to borrow a phrase describing the eyes of Julia Paradise herself on her first startling appearance in the foyer of the Shanghai Astor House Hotel. The characters are like "shadows," whose movements we observe through doors or windows of "frosted glass," a recurrent metaphor in the early parts of the novel.

A quotation from Flaubert's Letters serves as an ironic epigraph: "Yes, stupidity consists in wanting to reach conclusions. We are a thread and we want to know the whole cloth . . ." The critic, like the analyst, stands warned against the hubris of interpretation. It is certainly a theological axiom and, for all I know, a psychoanalytical one, too (although this is in part a novel about the limits of psychoanalysis) that we do not begin to understand anything until we are able to acknowledge we have understood nothing.

The novel is divided with deceptive artlessness into three parts. It is Shanghai, 1927. Kenneth Ayres, nicknamed "Honeydew" for the brand of tobacco he uses, is a bored, grossly overweight Scottish doctor who amuses himself treating the minor nervous disorders of British colonial "wives and . . . daughters" passing through the hotel where he lives. He once spent a year studying under Freud in Vienna. "In China, that pestilential dreamscape of suffering, he had no interest at all." He cultivates an opium habit and, less harmlessly, a sexual obsession with very young Chinese girls, or "Wendies." But when William Paradise, an Australian Christian missionary, brings his disturbed wife Julia to Ayres for a consultation, the doctor is seduced from his languor by Julia's apparently textbook case of hysteria compounded by an addiction to morphine and the poetry of Coleridge. Ayres, the diligent student of Freud, is arrogantly sure of his diagnosis.

The second section takes the form of a third-person narrative account of Julia's own memories. "Ayres was convinced that he was finally being allowed to approach the psychic events of her childhood which lay at the root of her hysterical illness." Set in "the Duck River region in Northern Australia," Julia's story evokes a steamy, exotic, overgrown landscape dominated by the figure of her German scientist father -- overweight, leprous and monstrously selfish -- who exploits her sexually until she is at last delivered by a spectacular flood, fetching up at the very door of her future husband, the Methodist clergyman, Willy Paradise. It seems that the origins of the adult Julia's "malevolent zoo ptic universe," all that lurid baggage of fantasy and hallucination, are being here laid bare.

The third section introduces an unexpected switch of perspective, setting off the gradual subversion of Ayres' confidence in his own scientific judgment. As he is drawn more tightly into the web of Julia's illness, the web takes on the appearance of an intellectual trap, a "net cast with such casual accuracy across his path: the hints planted, her silky narrative woven to confound him, an entire childhood left hanging in the air." Puzzling discrepancies emerge. Certain details of Julia's narrative parallel Ayres' own life and habits so closely that he feels at first uncomfortable, then -- along with the reader -- mocked and confounded.

Surrounding and complicating all of this are the politics of China's long civil war. Kuomintang troops are advancing on Shanghai. The Paradise mission is seized. At every point the European and Australian characters' involvement with politics and with the Chinese themselves acts as a commentary upon their inner moral lives, and vice versa. The well-intentioned but inept Willy Paradise is arrested and later presumed shot. A female German Marxist revolutionary plays a minor but symbolically significant role: once having looked into her face, it always seemed to Ayres afterward "that he had been looking into the face of the future, the face of the twentieth century."

Julia Paradise touches with extraordinary subtlety on the various interrelationships, both real and metaphorical, among the great modern historical movements -- Freudianism, Marxism, colonialism, feminism, revolution. On how many levels, for example, does the key phrase, "the despair of repeated rape," reverberate throughout the novel? But there will be no easy resolution. For "Honeydew" Ayres, "as in life, the mysteries remained, became subterranean and mapped out only in his dreams." So it must remain for the reader. The novel does map itself out subliminally, in the recesses of the mind, if allowed to rest there a while after one or two readings, as it may well have grown in Rod Jones' mind in the first place, a dream woven or "mapped out" from a memory of Kubla Khan: "Weave a circle round him thrice,/ And close his eyes with holy dread,/ For he on honeydew hath fed,/ And drunk the milk of Paradise."

Elizabeth Ward frequently reviews contemporary fiction for Book World.