"It's terrifying to do a new ballet," exclaims Ben Stevenson, artistic director of the Houston Ballet. "I'm more frightened of doing 'The Miraculous Mandarin' now than I was staging 'Sleeping Beauty' for Margot Fonteyn and the National Ballet 15 years ago in the same house."

The world premiere of "The Miraculous Mandarin" will be a highlight of the Houston company's two-week engagement at the Kennedy Center Opera House, on a repertory program Jan. 28 opening the second week. The troupe will be presented here as part of the "AT&T Performing Arts Festival at the Kennedy Center."

Stevenson's nervousness has to do with the significance of the Kennedy Center engagement for his company, the sense of risk that always attends new work and the circumstances under which "Mandarin" was created.

"Coming here is extremely important to the Houston Ballet," he says. "We consider the Kennedy Center the number one showcase for visiting companies in this country. I must say I was a bit stunned when I heard Washington was anxious to have a world premiere. I'd been away last month, in China, during the company's run of 'Nutcracker' at home, and I returned to find 10 dancers out because of injuries and illness. Obviously it was going to take time to get them back in shape. But Marta Istomin suggested that it would be nice to have 'something special' for our second visit to the center, and AT&T wanted a premiere to help put the festival on the map, so to speak."

Stevenson came up with the idea of "The Miraculous Mandarin," a celebrated score by Be'la Barto'k, as a ballet vehicle for Houston principal Li Cunxin. The story concerns three cutthroats who use a prostitute to lure their victims. They mug the Mandarin and try to kill him, but his passion for the girl mysteriously staves off his death; in the end, it is she who brings him peace.

The original version, in 1926 in Cologne, West Germany, was banned for immorality by Konrad Adenauer, then lord mayor of the city. The New York City Ballet, the Bolshoi Ballet and the Royal Danish Ballet have mounted other productions since. Stevenson hasn't seen any of them, but fell in love with the music. "I thought it would be wonderful for Li, who's a miraculous mandarin himself in a way, and that it would show off his versatility to have him play, not another handsome prince, but an ugly, aggressive character."

When Stevenson produced "Sleeping Beauty" for Fonteyn, he was codirector of Washington's National Ballet -- the city's major classical troupe of that era -- and the Kennedy Center was his theatrical "home" until the company folded in 1974. He'd come to this country in 1968 from his native England, where he'd had a burgeoning career as a dancer and choreographer with such troupes as the Sadler's Wells Royal Ballet and the London Festival Ballet.

A lot of dance history has transpired since then. Since his arrival at the Houston Ballet in 1976, Stevenson has guided the troupe toward international stature. The company now numbers more than 40 dancers, commands a wide-ranging repertory and has an annual budget of over $6 million. Company dancers have taken many honors in worldwide competitions, including, most recently, Li's bronze medal at Moscow last summer. The troupe made its Kennedy Center debut in 1983 and has toured Europe. Last October marked its debut appearances at the New York City Center.

Stevenson's new and somewhat unconventional production of "Swan Lake," in two acts rather than the usual four, opened the New York engagement as it will the Washington visit. Stevenson had staged "Swan Lake" for Houston in the late '70s, but felt a new production was in order for the company's metropolitan touring, and had David Walker design sets and costumes for the premiere in Houston two years ago.

"I firmly believe," Stevenson says, "you don't need sets and costumes in order to have good ballet. But if you're going to do 'Swan Lake,' you really don't have a choice. And as I've learned the hard way, the horrible thing is you've got to sell tickets. One thing leads to another. To attract fine dancers and give them enough work to keep them fine, a company must have them under long-term contract -- ours is now for 45 weeks.

"We do lots of new choreography, and especially in major cities like Washington, we always want to show new things. But given the length of our season, and the rising costs of per diems, hotel rooms, transportation, production and dancers' salaries, we have to bring in audiences. We have to be 'popular.' "

Many of the same factors, Stevenson feels, contribute to the chanciness of mounting new work. "It's frightening because it's so expensive. I'd love to do new ballets in Kleenex, with no decor to speak of. But one has to take the public into account, and they're not always easy to convince. We have this saying in Houston that an opening night is 3,000 people sitting on 6,000 hands.

"I'd love to be able to establish a choreographic workshop, not for untried youngsters, but for gifted, established people -- Lynn Seymour, for instance, or Washington's Choo-San Goh, or Sallie Wilson. But it would have to be a situation in which the Houston Ballet dancers could participate -- not just our academy students as in our summer workshops -- and we'd have to be able to use a real theater, not a studio. You can't insult established choreographers by asking them to do tryouts, to slum it.

"I'd like to have this kind of situation for some of my own work, instead of having to think about foundation grants of $200,000 every time one does something new. Choreographers need to work consistently just as much as dancers -- you have to choreograph to choreograph. You can't just make a ballet every two or three years. But all this would be terribly costly."

Stevenson is a choreographer of no small achievement. His works have been awarded honors in major competitions at home and abroad three times; one of the winning pieces, "Three Preludes," has become a staple of international repertory. And when the Central Ballet of China arrives next month for its American debut performances (March 25-30 at Kennedy Center), this Stevenson ballet of 1969 will be one of only two works by westerners the company will present. It's a tribute to the impact Stevenson has had in that country over the course of his nine visits, on one of which he met Li at the Peking Dance Academy and offered him a scholarship to Houston's school.

If the Chinese hold Stevenson in esteem, the feeling is assuredly mutual. He first went to China in 1979, as part of the initial arts delegation in the wake of the "thaw." "When I was first invited," he recalls, "I had these visions of myself seeing the Great Wall and eating lots of Chinese food." In fact, he didn't make it to the wall until his most recent trip.

Almost all of his time in China has been spent teaching western classical ballet to Chinese students; in 1981 he also toured the country with 11 soloists from the Houston Ballet and a like number of Chinese dancers.

"The most rewarding thing for me has been the Chinese people. They are so wonderfully appreciative of everything. They couldn't pay you enough to make you feel that good. Their feelings of affection and respect, for themselves and others, is very much up front. There's something, too, about the way they live. We're so used to material comforts we take for granted, air conditioners, color TV. Most of these people have no toilets, no hot water, they scrub their floors on hands and knees, they cook over a little flame. And they also have great humor. I find myself very moved by them."

Stevenson sees some change in Chinese attitudes, perhaps partly as a result of visits by western troupes. "You know, after their revolution, they were so concerned to banish the old associations with drugs and prostitution they adopted very puritanical ways, almost Victorian, like they wanted to stamp out all sin . . . It used to be that Chinese dancers never exposed skin, anywhere -- if a male dancer was supposed to have bared legs or a woman a bared midriff, for instance, they'd invariably wear flesh-colored tights.

"But on this last visit, I watched some men in a school performance actually dancing bare-chested. It was very surprising. Also, for the very first time this visit, I was permitted to teach a mixed class, with a few women in the same group as the men. Still, it'll be a long time before 'Oh, Calcutta' plays in China."

There are other stumbling blocks for the Chinese in some of the more contemporary varieties of western dance, Stevenson observes. "Alvin Ailey's company has been an enormous success in China. And the Central Ballet recently had Rudolf Nureyev staging a new 'Don Quixote' for them. But Trisha Brown was just there with her troupe -- she left the day after I arrived -- and that caused quite a bit of puzzlement. Was this dance, they asked. They didn't know what to make of Trisha's use of natural movement, or of her abstraction. I tried to explain that some choreographers want to escape the stiffness and restrictions of classical ballet movements. Each time I go, I bring as many films as I can, of every kind of dance, from Ruth St. Denis to Fred Astaire to Merce Cunningham."

The Chinese students Stevenson has encountered, he says, are eager to learn. "If they're doing something wrong, you can actually tell them 'That's terrible!' without their falling apart, as so many of our dancers would. In this country, you have to say something like, 'You're lovely, darling, you're so very talented, but this just now wasn't very good,' every time some criticism is called for. In Houston it took me 10 years to tell the truth."

Stevenson attributes the accepting quality of his Chinese students partly to the discipline they learn in their own schooling but also largely to the pervasive Chinese veneration for elders. "Older people always know best, they will tell you. They have tremendous respect for grandparents. Students will tell me that an older person is wiser because he has lived longer. If I point out that some can live long and still be stupid, they'll say yes, but they've experienced much more of life."

Stevenson has been invited to return to China and teach for a year, and there are times, he says, when he's strongly tempted. "When I come back from China, I feel all opened up by their curiosity and questions. I feel as if I've been to a health farm. I feel -- inspired."

The Houston Ballet's second-week repertory program that introduces "The Miraculous Mandarin" will also include Jiri Kylian's "Symphony in D" and the American premiere of "The Grand Tour," a ballet created for England's Royal Ballet in 1971 by the American Broadway-bred choreographer Joe Layton. It has music by Noel Coward, and it's about an ocean cruise in the '30s -- among the voyagers are such celebrities as George Bernard Shaw, Mary Pickford and Gertrude Stein. The company's final program will offer the Washington premiere of Stevenson's full-length "Peer Gynt," choreographed in 1981 to Edvard Grieg's incidental music for the drama by Ibsen.