THERE has been no official announcement and there will be none. ''I told my board and staff early in December that I would be leaving at the end of March, but it didn't come as a surprise,'' says Hong Kong Arts Festival chief Tseng Sun-man. ''A year ago, I informed our chairman Martin Barrow that I wouldn't be staying after the next festival. ''It's a bit too early to start thinking of a new job. I plan to enjoy the luxury of a two-month break. After 51/2 years with the festival, I'm totally burned out.'' He will be missed enormously. Few in the local arts scene have earned greater respect and affection than this slight, modest 38-year-old who has superintended Hong Kong's premier cultural event. Even fewer are so alert to the challenges and dangers of the next four, crucial years. ''All local arts organisations including the Provisional Arts Development Council (PADC) have to look very carefully at the whole question of China and 1997 and that includes the negative side. ''With its enormous fund of manpower and cheap labour, China will provide a lot of competition and we must be prepared for it. ''I've never forgotten the words of Gary Trinder (the former artistic director of the Hong Kong Ballet). 'We have to be realistic and ask: do we need a ballet company in Hong Kong or should we just bring in the Shanghai Ballet and Central Ballet of Beijing twice a year?' he said. ''My main concern is that while Hong Kong people are quite rightly placing an emphasis on local identity, one also has to balance that with internationalism. ''I believe there will be an important niche for Hong Kong in its relationship with China - providing we don't become so narrow-minded that we only support local talent. ''International exchange is so important for us and we mustn't lose out on that.'' The eldest of four children born in Hong Kong to a couple who met on the job - ''my mother and father were both nurses and he's still working for the MacLehose Rehabilitation Centre in Sandy Bay'' - Tseng Sun-man's involvement with the arts began early. ''My mother has always loved music and was determined all of us should play an instrument, so at the age of six, I was started on the piano. ''It wasn't a very pleasant experience - I was much too active to sit still and practise - but by the time I was about 12, I was going to hi-fi concerts at the City Hall and enjoying them tremendously. It was great. There were these two huge speakers andit cost just a dollar to get in.'' At King's College in Bonham Road the reluctant pianist was soon pressed into useful service. As one of the few in the school adept at the keyboard, the young Sun-man found himself accompanying the choir and numerous soloists. ''Suddenly I felt I was of some use and when I became chairman of the school's music society, I started thinking seriously about a career. ''My parents had hoped I'd become a doctor, but when I decided to major in music at the Chinese University, they were very supportive.'' Dreams of glory soon faded. Never mind; if he couldn't be another Artur Rubinstein (''my teachers warned me it would be tough'') he could still use his training in arts administration, decided Tseng. Luck was on his side. ''The Music Office was set up the year before I graduated and I was in the first group hired as assistant music officers. ''We had a great boss, Gordon Siu (now Secretary for Economic Services) and his instructions were straight-forward. 'Think up some programmes to promote music in your district, give me your proposal and if it's okay, you've got it,' said Gordon. ''My district was Hong Kong Island and I came up with a few good ideas. One was my Hi-Fi Appreciation series in Central - a series of lunchtime concerts accompanied by slide shows - and I also liked my Island Youth Music Festival.'' In 1979, the Music Office gave Tseng a year's leave to do his master's degree in piano at New York's Manhattan School of Music. Two years later, thanks to a British Council scholarship, he enrolled in a post-graduate diploma course in arts administration at the City University, London. ''I'd applied to do it earlier and been turned down - quite rightly - because I lacked work experience, but this time there were no problems. ''It was an excellent course and I really enjoyed London. The most valuable thing I learned was the importance of good contacts. Thanks to the British Council connection, I was able to travel around and meet a lot of people.'' The experience served him well when, in 1982, he joined the Hong Kong Philharmonic Orchestra as Appeals Co-ordinator and launched an Endowment Fund Appeal for $50 million. Promotion followed, then in July 1988, Tseng Sun-man was appointed general manager of the Hong Kong Arts Festival. Few would have had the courage to take on the job. For a year, following the resignation of Briton Keith Statham, the festival had been without a chief and the problems which had bedevilled him soon took their toll of the new boss. They never went away. Statham, who, through prudent management, had built up a healthy surplus, had been outraged when the Government cut the festival's grant, effectively ending any hope of saving for a rainy day. Now Tseng found himself battling the same blinkered approach. He has fought to the end. Without realistic funding, a decent festival in 1995 would be impossible, warned Tseng after his grant was frozen for the second consecutive year. Sponsorship and fund-raising can never be more than a partial answer, adds the executive director. ''Since I took over, donations have risen from eight per cent of our budget to 16 per cent, but the Government has to realise there is a natural plateau and very little hope of going higher. ''I would say 20 per cent is the maximum we can expect and that will take at least three years to achieve.'' It hasn't been all gloom. ''Before, I did everything, which wore me out, but now the festival is on the right track,'' says Tseng, who recently appointed Grace Lang as programme director (''the artistic side'') leaving himself free to concentrate on administration. As the founding director, and currently chairman, of the Hong Kong Arts Administrators' Association, he also been heartened by the establishment of the PADC - ''it won't be another rubber stamp, but what's needed now is a system of checks and balances'' - and the rapidly growing clout of the arts community. ''In 1993 we saw it become really vocal for the first time and artists now feel they have the power to influence the Government. ''At the same time, the arts community should beware of over-simplification, especially when it comes comparisons between established groups and up-and-coming ones. ''To criticise a company like say, Chung Ying, for getting too much financial support at the expense of some young, deserving local playwright, is ignoring the fact that Chung Ying can commission that playwright and promote him professionally.'' Playing the biggest role of all in future will be that ''potentially huge money-spinner'' - China. ''Five years from now, people in Guangzhou will be joining tours to come to the Hong Kong Arts Festival,'' predicts Tseng Sun-man.