We were gazing at the old steeple, relic of an empire we would never see again, when the white haired man in brown slacks and undershirt came up and said, in careful English, "That was a church."

I looked at him in surprise. In three trips to China, no Chinese had ever before come up to me on the street and started a conversation. And what an odd place for it to happen, here on little Shamien Island, the infamous former European enclave that symbolized a century of bad blood between Chinese and foreigners.

The man seemed nervous, he glanced occasionally at a few young people leaning against a fence and watching us. But he seemed pleased to chat with two people he took to be American tourists out for a stroll. We stood between the church, built by the British imperialists, and a mansion that for the last 20 years has housed the representatives of China's new, socialist enemy, Vietnam. The two buildings, and our conversation, marked a dizzying change that the Chinese are just beginning to learn to cope with.

"I have been here for more than 30 years," said the man, who appeared to be in his early 60s. "I was here before the liberation in 1949. I used to work in the British customs office."

IN THOSE DAYS Chinese were forbidden to live on this little island, about five blocks long and two blocks wide. It was a self-governing foreign enclave, isolated from the teeming Chinese city outside its walls and narrow bridges and beyond the reach of Chinese law. The situation constantly irritated Chinese pride. A mob in 1884 burned many of the buildings. Another mob in 1925 was cut down by foreign machine-gunners, leaving 80 to 90 dead. Today they are honored as martyrs.

For the last 30 years Peking has tried to motivate the latest generation of Chinese with the memory of those days, when places like Shamien were, in Peking's words, the "headquarters for the imperialists' political and economic aggression against the Chinese people."

Communist Party Chairman Hua Kuo-feng, in his recent report to the National People's Congress, tried the same theme out again: "In the 105 years from the 1840s to the middle of the 1940s, almost all of the imperialist countries of the world . . . committed aggression against our country . . . If in the decades to come we don't completely change the situation in which our economy and technology lag far behind those of the imperialistic countries, it will be impossible for us to avoid being pushed around again."

Yet on this old sandspit, those memories have almost completely faded away, along with the action-provoking fears and hatreds Hua and others might have hopped to inspire. Today, the man told us, this is one of the most sought-after neighborhoods to live in all of Canton. The old colonial mansions have been carved into flats for scores of Chinese families. People like the cool breezes from the Pearl River and the relative quiet that comes from being cut off from Canton's raucous street traffic.

MEN PLAYED CHECKERS on the waterfront when we visited. Boys examined bird cages, or played badminton or practiced gymnastic stunts. The six packed-earth tennis courts were deserted, but the national team has occasionally practiced here.

What tensions still exist come not from the long forgotten Westerners, but from the Vietnamese. Until a few weeks ago they occupied what our impromptu guide said was the old Canton commissioner's house, the residence of the British government agent who used to govern most of the island. It is a cream-colored two-storey building with brown shutters, shaded by many trees with a small, ornamental pagoda and birdbath in the rear garden. Two Chinese Army guards patrolled the corner where it stood, one with fixed bayonet and one with ammunition clip in his rifle.

"It is a large house, very nicely furnished inside," the white-haired man said. Since the Vietnamese were ordered home by a Chinese government enraged by threatment of ethnic Chinese in Vietnam, only small Polish and North Korean consulates remain on the island as the last vestiges of foreign influence.

THE WESTERN POWERS set themselves up at Shamien after their victory in the second opium war in 1858. The war had won them greatly expanded trade privileges and territory throughout China, but their homes and warehouses in Canton had been burned. They decided this time to settle on a partly submerged sandbank on the Pearl River, adjacent to Canton's main docks.

With $300,000 and the labor of countless Chinese coolies, a tree-shaded island of spacious homes and offices was created that provided a fair approximation of the niceties of genteel European life. Christ Church was built at one end for the English, a small Catholic church was built at the other for the French. There was a gentlemen's club and a lawn tennis and croquet club.

Standard Oil, Texas Oil and British-American Tobacco were there with several British companies. "We used to do our bit of business and seemed to have plenty of time to play football . . . or go to the club, play tennis or bowls and every so often we'd have regattas on the river," one of the few surviving businessmen who remembered those days once told the trade publication, Canton Companion.

Those who were bored could take a three-hour train ride to Hong Kong for the weekend and come back Sunday on the night boat. "Then if you were a spoilt chap like me, your boy would bring a clean change of clothing on board for you in the morning and you'd go straight to the office," the businessman recalled.

THE BUILDINGS still remain, although many are desperately in need of paint. The French church is a factory, its vestry littered with machinery. The British church which, we gazed at, the man told us, was now a carpentry shop for repairing furniture.

A Chinese tour official had earlier told us his most vivid memory of Shamien. One night just before the Communists took over Canton, he watched two Europeans get off their rickshaws at a hotel on Shamien, toss their money onto the ground, and laugh as the rickshaw men scrambled in the dust for the coins made almost worthless by wartime inflation.

The official said he vowed to tell his children some day about that moment of humiliation, and he eventually did, several times. "But they seemed rather bored by it," he said.

The man who has stopped to talk to us said he works now for one of the government trade organizations. His office has helped turn the old exploitation around by making a tidy profit from dealings with the Westerners who flood the semiannual Canton trade fair. The past has deserted Shamien, he said, nodding toward the young people still watching us. "They don't know anything about the foreign concessions or the church," he said. "They don't remember, or ignore, what it was like then."