IT SHOULD have been the triumphant return of a prodigal son. Chen Kaige, the director whose Farewell to My Concubine this year became the first Chinese film to win the Palme d'Or at Cannes, was taking his award-winning baby home. But it seems China's hardline authorities do not want to kiss a baby which details 50 turbulent years in the country's recent history. Farewell 's long-awaited release in China is in disarray. The film, which stars Hongkong's Leslie Cheung Kwok-wing and diva Gong Li, was scheduled to open in Shanghai tomorrow and in Beijing on Wednesday, with a press conference in Shanghai today. About 30 cinemas were lined up in each city to show the film. Everything seemed to be in place until last week when Tomson Films, the Hongkong-based production company, was told the press conference had to be called off. Then, on Wednesday, word suddenly came from Beijing that the release of the film could also be in jeopardy. ''I feel very, very sad about what is happening,'' said Chen during a brief trip to Hongkong. ''I actually don't under- stand. ''When I won this award, the Palme d'Or, I was very, very happy. I thought that others would be happy, too, and that this would be good for China.'' It was the first time in 46 years of the Cannes festival that a Chinese film had walked away with the top prize - it was also the foremost international honour ever accorded a Chinese film. Chen, who had been in Cannes twice before with The Yellow Earth (which launched the New Chinese Cinema in 1984) and Life on a String (banned in China), had made cinema history. But it seems to be a history lost on the powers that be in China. News about Farewell 's release has come via the head of the Beijing Film Studio, the Chinese co-producer of the film and the studio where Farewell was made last year. But it seems the decisions have been made by a higher authority - higher even than the Film Bureau, which oversees the Chinese film industry, and which sits under the umbrella of the powerful Ministry of Propaganda. Chen is uncertain about the real source of the directives, since he does not communicate directly at those levels. But a few weeks ago, a story appeared in the Hongkong press claiming the Chinese politburo had ordered a private screening of Farewell after Chen's Cannes triumph to see what all the fuss was about. Farewell had already been approved by the Film Bureau both in script form and in completed film version. According to the press report, some party members left before the film was finished, others outwardly expressed their distaste. General Secretary Jiang Zemin allegedly ordered that no publicity be given to the film in newspapers, radio, or television. Since the screening the Beijing Film Studio has made three cuts to the film. Chen did not know what the cuts were and although he was reluctant to talk about specifics, he said it was rumoured the film's problems focused on its politics. In the film, theatre people are forced to denounce one another during the Cultural Revolution - a common enough occurrence in every work unit during the period. In another scene that might have irked the authorities, the main character Cheng Dieyi and Master Yuan get drunk and act out a Peking opera scene in the courtyard, where they embrace. Suggestive, perhaps, but hardly outrageous. The whole controversy points to a fundamental weakness in the system: there is no formal code or criteria by which Chi- nese censors judge movies. And while Film Bureau approval is usually enough, now others, more powerful, have become involved, and they are not obligated to provide any reasons for their disapproval. Chen feels the international acclaim the film has already earned makes it too big for the Chinese Government to bury. ''They don't like the film, but they can't ban it,'' he said. Of the problems with publicity and distribution, he said: ''It's so hard to change people, it's like going back 10 years. These are the kinds of problems we had 10 years ago.'' Given the problems with Farewell, Hsu Feng, the film's energetic producer, is concerned about the future of her next project - Nien Cheng's Life and Death in Shanghai. An international bestseller about a woman's stand against persecution and incarceration during the Cultural Revolution, Hsu bought the option to make the film last year. Originally, Tomson Films had planned to turn to the production of Life and Death right after the international distribution of Farewell, but earlier this month it took out an extension on the film option. One problem is getting approval from the Film Bureau for the script, a mandatory review for all films to be shot in China. Hsu said: ''We've been advised the climate just isn't right for submitting our script right now, so we'll have to wait it out and see if things change,'' Chen said he anticipated such difficulties. ''Early on I knew it would be very difficult to make this film in China,'' he said. ''But all along I wanted to make a story about a woman, an individual, one human being's life experience and how she is tested. ''Some people in China always see things from a political point of view. I tell people I'm not a politician.'' With Life and Death on the back burner, Chen wants to turn next to Shadow of a Flower, a love story set in the 1920s. Recently he signed up two writers to do the screenplay, including one of China's top screenwriters, Hsiao Mao (Bloody Morning and The Blue Kite ). One of the two male parts will be played by Cheung, while the female lead will probably be a fresh face, yet to be dis- covered. Despite the drama in China, Chen is busy publicising Farewell abroad. In September, he will be one of the judges at the Venice Film Festival and Farewell to My Concubine will make its debut in Canada at the Toronto Film Festival, and in the United States in October at the New York Film Festival. Scarlet Cheng, managing editor of Asian Art News magazine, writes frequently about film and the arts.