With two Western views of China dominating current American cinema -- the megabuck productions "Empire of the Sun" and "The Last Emperor" -- arrival of the American Film Institute's second Taiwan film festival seems perfect timing.

For the next two weeks these films, culled from recent works of the "New Wave" Chinese directors, give us some three-dimensional portrayals of what it is to be Chinese. And, really, it's at once more complex and a lot more fun than Spielberg and Bertolucci let on.

For most of its short history, Taiwan dianyin -- literally, "electric images" -- have been considered entertainment vehicles. But in the '80s, a new crop of young directors, many with American educations, began to produce relevant and naturalistic cinema. Some, like Hou Hsiao-hsien and Edward Yang (represented by two films each in the AFI series), have begun to make a name for themselves on the international circuit, but none has yet broken into mainstream theatrical release in the West. The films at the AFI suggest they may be on the verge of that breakthrough.

Surprisingly enough, half of the eight films feature youths as central characters, showing far more spunk and animation than most of the adults. Alas, those poor grown-ups! While struggling under the weight of tradition, they must also cope with the disruption of social and economic change in a speedily modernizing country, and this, not surprisingly, is a key theme in the "adult" films.

Even the sole costume drama of the eight, Wang T'ung's "Run Away" (shown Feb. 4) deals with the dilemma of change. Set in medieval China, it features a ragged gang of bandits beginning to fall apart after its leader is killed in ambush and the countryside is being civilized by government troops. The lead character, a tough guy trying to make good with the woman he's kidnaped, meets a predictably sorry end. The slapdash quality of this production makes this tired tale even more wearisome.

However, the strength of Taiwan's New Wave cinema lies, of course, in contemporary drama. These stories are by and large naturalistically portrayed -- a far cry from the days when Chinese films were overacted and overmugged -- and technically well made. Even the English subtitles have improved, becoming more idiomatic. One lingering problem is the sloppy sound synchronization and volume control, resulting in abrupt starts and stops of music (sometimes oddly inappropriate to the mood) and blaringly loud conversations between actors.

Veteran director Chang Yi is one who has mastered the technical art of filmmaking, and in the last AFI Taiwan film festival, his work "Jade Love" was the most sophisticated and compelling entry. A lushly photographed period piece set in prewar China, it was the story of a forbidden love gone wrong.

Love gone wrong is again the theme of his contemporary drama "This Love of Mine" (being shown tomorrow), scripted by his then wife Hsiao Sa. A sheltered housewife with two young children discovers her husband having an affair with a younger woman. When confronted, he is reluctant to end his liaison, and her ordered universe goes to pieces. In the rude awakening, she realizes that she has no friends, no employable skills, nowhere to go. The acting is by turns contained and explosively raw, conveying the claustrophobia of a life lived without choices, but the film as a whole slips unfortunately close to shrill melodrama.

Incidentally, real-life melodrama mirrored cinematic melodrama, or vice versa, when "This Love of Mine" was originally released in Taiwan. Chang Yi's affair with his leading lady -- Yang Hui-shan, who plays the wronged woman in the film -- was splashed in the press, and his screenwriter-wife became his ex.

American-educated director Edward Yang, who showed so much promise in his 1984 cinema realite' "That Day on the Beach," seems stuck on gloom-and-doom with his two recent flicks, "Taipei Story" and "The Terrorizer." In them, life in modern Taipei is not a pretty picture -- grim industrial architecture dwarfs the skyline and people wander in moral confusion in the brave new world.

"Taipei Story" opens with a Chinese yuppie (Ts'ai Ch'in) showing her laconic boyfriend (the director Hou Hsiao-hsien, wearing his acting cap) her new apartment. "And here's where I can put the bed, see, with the TV and the VCR over here so we can watch it ..." Unfortunately, things go downhill from there. As she proceeds to lose her cushy job because of a corporate takeover, they drift emotionally apart, he gambles away his Mercedes ... The Chinese title "Ch'ing Mei Chu Ma" means literally "green plums and bamboo horses," an evocation of bygone youth.

"The Terrorizer" weaves together the lives of several disconnected individuals and couples. A teen-age delinquent, laid up with a foot injury, begins making random anonymous phone calls out of boredom, and plants a seed of doubt in the mind of a woman novelist about her husband. When the novelist disappears, the husband calls upon his old friend, a detective, who only recently busted the boyfriend of the teen-age delinquent, and so on. Edward Yang calls it a story about "the bombs we plant deep within one another, ticking away." His shots of bleak urban cityscapes and blank urban faces are reminiscent of Michelangelo Antonioni, with whom he is often compared.

Yu K'an-p'ing, another American trainee, directed "Myth of a City" (Feb. 15), a loopy comedy about a retiring bus driver who decides to take two coworkers and eight of his kindergarten charges off on a joy ride to the seaside. They dodge police cars and helicopters, dine with aboriginals in the mountain and end up disco-dancing on the beach with a friendly motorcycle gang. "Capture the moment!" warbles Taiwan's answer to Cyndi Lauper, flipping her ponytail to and fro. "Don't let the flame go out!"

The director of this modern-day fable has the unusual distinction of having a movie in American distribution on videocassette -- the homosexual drama "The Outsiders."

Hou Hsiao-hsien, as expressive a director as he is inexpressive an actor, is the director of two teen films. "The Boys from Fengkuei" (Feb. 9) chronicles the transition of a trio from their sleepy home town of Fengkuei to big city life in Kaohsiung. The other film, the slick and delightfully offbeat "Daughter of the Nile" (Feb. 17), ranks with Peter Mak's satiric "The Loser, the Hero" (Feb. 11) as the two gems of this festival.

In "The Loser, the Hero," two pals fail the all-important national exam to get into senior high school. Ju-lin finds his friend Ch'en Ching huddled in a dark room in shame, contemplating suicide by being crushed under his bookcase or eviscerating himself with a ball point pen. Instead, the two enroll in a hellish "cram school" to improve their scores for next year's test. For 14 hours a day, from dawn to dark, the kids attend lectures, take exams, lunch and nap in a narrow, windowless classroom, harangued and shoved around by tutors who tell them, "You must be reduced to ashes, so that you can be reborn!"

As if it's not bad enough at school, Ju-lin returns home to study late into the night, while big brother, having achieved the safety of college, drinks beer and listens to rock music in the room they share. One evening a revelation comes to Ju-lin and he asks his brother, "Everyone wants to get into college because things are so easy once you get there, right?" His brother grunts in reply, too absorbed in reading a trashy novel. Though his parents feel sorry for Ju-lin, they don't know what to do for the boy. He has to go the distance alone.

In addition to creating a bitingly funny critique of the do-or-die exam system, Peter Mak has captured a Chinese family at its idiosyncratic best. The scenes in which the parents try to get seeds out of their watermelon (Dad slaps the rind; Mom daintily uses a toothpick) or when big brother tries to teach them to tango are particularly fine.

Mak has the developed narrative, but Hou Hsiao-hsien has the slickness that gives "Daughter of the Nile" the most East-West crossover appeal. It stars the charismatic Yang Lin, a singing idol in "real" life, as a teen-ager working at the Taipei franchise of Kentucky Fried Chicken by day, going to remedial school and disco clubs by night, and fantasizing herself and her brother's snazzy gang of hoods into a comic strip called "Daughter of the Nile" whenever she gets the chance. In her fantasy they are the deities and princes of ancient Egypt, filtered through the haze of screwy pop history.

Hers is a broken home, bereft of a mother (a cancer victim) and visited by a loutish Dad who occasionally drops in from his out-of-town job. Fortunately, appearances of their irresponsible grandfather, walking in and out of the house without a hello or goodbye but dispensing plenty of advice en route, adjusts the balance of power. The set-up could have degenerated into a tear-jerker, but takes wing with Hou's unsentimental but empathetic direction and unself-conscious performances from the actors.

Pop music, both American and Chinese, pulses in the background, and Yang Lin's somewhat dreamy first person narrative knits this disparate collection of vignettes together. The young protagonists project such offhand charm and, yes, dignity, that they and the twilight world they inhabit -- a world between night and day, tears and laughter, youth and adulthood, long-ago past and ever-fleeting present -- stay with us after the lights go on in the theater and we return from our brief journey to a distant country we sometimes recognize as our own.

Check the newspaper listing or call the AFI (785-4601) to get specific times for these Third World encounters.