A wet and wild New Year's celebration. Water splashing and rockets mark south China's most exotic festival

Hai Oun and his wife walked for three days from Burma to attend the Dai New Year festival in Xishuangbanna this year. Sitting on a six-inch-high stool in his cousin's stilt house with chickens clucking on the ground a few feet below the woven bamboo floor, the Burmese businessman said he had brought with him several dozen pairs of Hong Kong-made blue jeans to sell in China to make the trip worthwhile.

``There are no roads on our route, only mountain paths,'' he said. ``I come to China three or four times a year to do business and we always come for New Year's.''

He spoke softly while his Thai wife and her two sisters slept a few yards away in the large common room. They were still resting from the trek.

Since the mid-1970s when the festival was revived, thousands of visitors have converged on the Xishuangbanna region each April for the traditional Dai New Year celebrations.

The pageant of colorful dress and ethnic diversity of more than a dozen minority peoples who live in the region make it southern China's most exotic, if little known, cultural event.

The three-day celebrations in Jinghong include folk dances, cock fights, boat races on the Lancang River (known as the Mekong south of the Chinese border), and a frolicsome water-splashing festival. Another traditional entertainment is the firing of small rockets, mounted on the end of long bamboo poles and launched from platforms several stories high for thousands of onlookers to see.

Walking is the chief form of transportation here since most people do not own bicycles and more than a hundred villages can be reached only by footpaths. The main route to Burma is a dirt road.

There is a languor to this setting of lush rice paddies, rubber plantations, and tea estates with its unusually large variety of tropical plants and animals. But this does not mean the region's biggest festival is merely a spectator sport. Turning heads in Jinghong

Dressed in their finest brightly-colored wraparound skirts and silk blouses, Ai Nin and her friends had been turning heads in Jinghong for two days. In earlier times, they might have passed for Dai princesses from one of the 12 petty kingdoms of Xishuangbanna.

On the first day of this New Year -- the year 1347 on the Dai calendar -- their shyness and delicate beauty masked particularly playful spirits. They had been looking forward to the raucousness of the water-splashing festival.

``Last year, I was too inhibited and stayed indoors. This year I want to enjoy myself,'' said Miss Ai as she and her friends took sanctuary in a private courtyard off the main street to dry off.

Both had been drenched by the aggressive Han Chinese boys who roamed the streets looking to hurl basins of water at passers-by. The exquisitely dressed young women were especially vulnerable, and Ai Nin's Chinese boyfriend was helpless to protect her.

After the elephant-foot drum dance at the local temple, when Dai boys traditionally favor prospective spouses with a gentle sprinkle, the courtship ritual of water splashing turned into open warfare in the town.

Foreign tourists as well as the open windows of cars and buses were all fair game. No one on foot or on bicycle could escape. The scene was repeated on a smaller scale in hundreds of villages scattered across the paddy fields and remote mountain valleys throughout the prefecture. Dai rites and rights

The dominant minority group in Xishuangbanna is the Dais, who are closely related to the Thais in language and customs. About one-fourth of China's 800,000 Dais live in the mountainous region of Xishuangbanna which consists of three counties in the southeast corner of Yunnan Province, all bordering on Burma.

The Dais are the only local minority with their own written language and newspaper. Before 1949, a local aristocracy of Dais ruled in collaboration with the imperial administration of the Han Chinese.

Other than the Dais, several hundred thousand more people of various ethnic backgrounds live in the region, including the Hanni, Lahu, Bulang, and Jino. Many of them, especially the women, wear distinctive folk costumes even in the markets of Jinghong during the annual Dai festival. Many have walked for several days to witness the fireworks, rockets, and dragon boat races in this capital of the Dai autonomous prefecture.

They come from all over China's sprawling Yunnan Province. Some, such as Hai Oun, travel from the nearby countries of Burma, Thailand, and Laos. (Hundreds came from Burma this year, including a group of four young novice monks who said they intended to settle permanently in China to escape the fighting among ethnic groups inside their country.)

``This is a crazy time for the Dai people,'' said a Peking-born university teacher in Kunming who lived in Xishuangbanna for nine years.

He explained that, traditionally, Dai couples would marry the day after the festival if their relationship from the previous year's festivities had produced a child. Under Chinese influence this custom has changed, but Dais still often marry in their late teens, a much younger age than is permitted for Han Chinese.

Peking's family-planning policies also are more flexible for ethnic minorities, who are permitted more than one child. Officials in Jinghong insisted there were no regulations limiting the number of children for minorities. But visits with half a dozen Dai families revealed that sterilization is common after the second child. Becoming a monk

Besides courtship practices, other Dai traditions are changing, including the practice of sending young boys to study at a Buddhist temple for several years. This was not possible during the Cultural Revolution (1966-76), when monks were forced to work in the fields and temples were vandalized or razed.

Now modest temples are being rebuilt in many villages and the custom of Buddhist schooling has been revived. In Xishuangbanna, Dai boys may wear the saffron robe of a novice monk for three to five years while they study the Dai language, Buddhist scriptures, and other topics peculiar to their religious and cultural heritage.

From discussions with Dai families, however, it appears that the importance of Buddhism, both as a religion and as a source of culture, has diminished since the Cultural Revolution.

Some Dai parents now discount such education and prefer that their children stay in government-run schools, where they are taught a standard curriculum by Han Chinese teachers from other provinces.

``I want my children to get ahead,''said one Dai mother of two boys. ``They don't learn anything as monks and they fall behind in their regular studies.''

This woman was a model worker who had excelled at raising pigs and received a trip to Peking courtesy of the local government. Her sentiments were echoed by other ambitious Dai parents in nearby villages.

As for the Dai language, its study has become voluntary since the Cultural Revolution, and it is no longer a part of the normal school coursework.

Dais also say that the number of monks has not yet returned to the level of the 1950s and early '60s. There are 3,000 monks in Xishuangbanna for some 110,000 households, according to local officials, though the numbers seem too large.

In Jinghong, which has a population of 10,000, the main temple has one senior monk, an assistant, and 14 novices, many of whom live at home.

Officials deny that, to be socially acceptable, men still have to serve as monks and have their arms tattooed with Dai verse. But some Dai women say they would prefer to marry a man who has been a monk because they think it makes him more virtuous.