After 10 years under what was perhaps the world's most radical exam-free education system, the Chinese have turned around and scheduled the most competitive college entrance examinations in the history of the People's Republic for early December.

Chinese educators say they are stunned to learn that two-thirds of the college graduates in China's largest city working in science failed a recent test in mathematics, physics and chemistry. Some people taking the Shanghai exam could not answer even one question in their specialties, which the official People's Daily called "shocking."

As a result, Peking has begun to completely revamp the Chinese educational system, praised by some U.S. educational reformers for its disdain for grades and its emphaiss on practical skills. In its place, an unprecedented examination fever is sweeping the country.

Young people who graduated from the equivalent of high school as long as 10 years ago and were denied a chance to go to college have been encouraged to take the new entrance exam. An estimated 20 million people have applied for only 100,000 to 200,000 available places at about 380 institutions.

In a nation whose political leaders for centuries were picked by examination and where specialized learning has won new endorsement from the Communist Party, the pressure to pass the test threatens to create the kind of heartbreak and suicide rates that have plagued Japan, France and Westernized Chinese societies like Taiwan and this British colony.

In a series of unusual radio spots and newspaper articles, Chinese education officials have both encouraged applicants and pleaded with those who might fail the test to return willingly to their farms and factories.

"If one does not go to college, it is just as honorable and promising to go to the countryside, or even to stay in one's own factory or village because one can still contribute his share to socialist revolution and socialist construction," Peking's Kwanming Daily said last week.

"The number of candidates will top that of any previous year in the history of the People's Republic of China. This will cause problems of workload, etc. We must correctly handle and solve these problems."

One high school in Canton, according to a Communist newspaper here, has adopted a favorite American technique, offering remedial courses for seniors preparing for the examinations.

An official radio broadcast from that same city, monitored here, has warned against "backdoor deals and theft of examination questions." [WORDS ILLEGIBLE] at length the problems of high school [WORDS ILLEGIBLE] factory jobs or farm chores while studying for the exam. It criticized supervisors who have "greatly thwarted or even [WORD ILLEGIBLE] attacked those youths who want to attend the enrollment examination and actively review their lessons."

It also chastized "some youths who, under the pretext of applying for the enrollment examination and reviewing lessons, arbitrarily left their production and work posts without permission."

Under the system that the Chinese now seem to be discarding in part, grades and test scores were not considered as important as the applicant's class background - workers, poor peasnats and soldiers were preferred - and his or her political activism as rated by coworkers.

Nearly all high school graduates were required to work at least wo years in factories or on farms before applying for college. The entrance exam, which Peking apparently plans to standardize, now assumes major importance and, according to a broadcast from Anhwei Provine, "applications are open to all workers, peasants, youths sent to work in the countryside . . . demobilized soldiers," and the high school graduates from this year and last year, who in the past would have had to wait before applying.

As a measure of how badly education officials think the school system has worked over the last decade, high school graduates of 1966 and 1967 are being given special permission to take this year's exam despite the general age limit for applicants of 25. The 1966 and 1967 high school graduates benefitted from the more rigorous curriculum of their day but they also probably missed college in great numbers as all universities closed down in the tumultuous days of the Cultural Revolution of the late 1960s.

Those late 1960s graduates were the famous Red Guards. They did little else for one or two years but travel about the country helping Mao Tse-tung's campaign against his enemies in the bureaucracy or staying at home to criticize their own teachers. Even when the schools began to function again in the early 1970s, student power still reigned supreme in many places. Teachers were criticized for using tests as "surprise attacks." The accent was on simplified technical courses that would help farmers or workers, and a student who defiantly turned in a difficult science exam without answering a single question was made into a national hero.

In an echo of the educational debate now raging in the United States, the People's Daily recently criticized what it called the prevailing philosophy that "all students are promoted to the next grade whether they take tests or not" and "all students in the graduating class will graduate whether they have studied or not."

This situation typically, has been officially blamed on the "Gang of Four," the group fo dogmatic Politiburo members that included Mao's wife Chiang Ching. Suggestings that Mao himself opposed exams, the People's Daily said, are "an out-and-out lie!" But in a 1964 talk with his nephew published by Red Guards, Mao, the former schoolteacher, chided instructors who gave hard tests and said "don't put too much emphasis on marks."

As proof that China is still a politized state, both the arts and science sections of the new entrance exams will have questions on politics, several official announcements have said. College acceptance notices will be sent out in early February, just two months before American high school seniors begin their own frantic vigil for white envelopes.