Open daily, 11:30 a.m. to 11 p.m. AE, MC, V. Reservations. Prices: appetizers and soups $1.25 to $3.25; main courses average $6 to $7 at dinner.

One of the most promising of American culinary traditions is the neighborhood Chinese restaurant. Whatever else declines in this Great Society -- sneakers, rocking chairs, $20 bills -- Chinese restaurants just continue to get better.

Peking Palace, for instance.Like many Chinese restaurants, it occupies the premises of a previous Chinese restaurant. (One begins to wonder whether a new Chinese restaurant moves into an old one's location just because there is already a supply of soy sauce.). In fact, its location may have housed several Chinese restaurants. This one shows promise.

If you look at the standard tests, Peking Palace passes most with flying colors, flunks only a few.

The egg roll test: Here they are called spring rolls, and wrapped with the light, thin, crisp dough that name implies. The filling is mostly cabbage, but if you like cabbage you'll be ready to admit that it tastes very good anyway. Subtract a point or two for occasional pastry texture of the filling.

The dumpling test: These fried dumplings are definitely homemade -- a plus -- but you can tell that by the heaviness of the dough -- a minus. The meat filling has been sometimes overwhelmed by garlic -- a plus or a minus, depending on your viewpoint.

The general appetizer test: Crisp shrimp balls are not yet widely available in Washington's Chinese restaurants, but they should -- and probably will -- be. They are light and airy puffs, utterly delicious, at least at the Peking Palace. Spareribs here are an unorthodox preparation, stewed in a dark sauce rather than barbecued; they are tasty, but not what most diners expect.

The soup test: Barely passing this one, Peking Palace lists only four, and the two I sampled (wonton and hot-and-sour) were based on almost flavorless broths.

The mu shi pork test: This restaurant spells it with individuality (moo hsu) and prepares it with obvious care, assuring that the vegetables -- mushrooms, cabbage, tree ear fungus -- remain crisp yet the mixture tastes well-browned and smoky. The pancakes are fine, the meat-vegetable ratio satisfactory, the dish an honor roll candidate.

The shrimp test: Cooking shrimp to the crisp, moist just-done stage is a challenge this restaurant meets. The shrimp are decent-size and, athough sometimes iodiney, generally of good quality, particularly for the price. Eight different preparations are available, from an aromatic (but not very incendiary) Szechuan version with garlic sauce to mild and deliciously delicate tung ting shrimp with salty ham, straw mushrooms and clouds of poached egg white.

The chicken, beef and vegetable tests: Bravo to a restaurant that can capture the bit of flavor today's chickens have retained. Peking Palace stars with two of its chicken dishes, both of them fried. General Tso's chicken is coated with a paste of spices, faintly sweet and minced with long hot red peppers. It shows that magical Chinese interplay of crusty and moist, sweet and spicy, pale and brilliant. No less succulent is chicken a la Peking, a flattened batter-fried breast covered with a tangle of julienned vegetables and a subtle sauce of concentrated chicken stock. Beef, on the other hand, has varied from crusty-and-juicy to pale-and-soggy -- the fault of insufficient heat or trying to cook too much at a time. No problem with the vegetables: the cook knows when to stop.

The duck test: Here the testing method failed. We ordered yu ling duck because it was available by the half. The other half must have been sold long before, because it had the distinctive taste of reheated poultry, though its skin was crisp and appealing; in all, it was a lackluster bird. Nearly, every other table, though, ordered Peking duck, available only as a whole bird, presented with a flourish and carved with impressive precision at the table. We felt envious.

The sauce test: Up a few points for flair with seasonings, but down a few for lack of courage with peppercorns, for frequent excessive oiliness and for too much sauce, leaving a pool behind in the empty plate.

Fish test: Ah, it looked beautiful, the crisp whole Hunan fish, curled so that its head nearly met its tail. And its carmelized sweet-hot sauce was savory and heroic in its proportion of garlic. But the fish flesh was dry, more like opaque cellophane than moist fresh flakes of ocean meat.

Noodle test: Winter is always more bearable after a steamy bowl of soft, gravy-infused noodles webbed with mushrooms and shrimp and chicken. And the Peking Palace's noodles Peking-style are a big boost to February.

You should not expect this to be a superstar Chinese restaurant. Its menu is predictable, and its environment is nothing more grand than leatherette booths with brown tablecloths and quiet niceties like silk flowers on the tables and napkins folded in birdlike shapes. The prices -- $5 to $6 for pork or vegetable dishes, $6 to $7 for beef or chicken, $7 to $8 for seafoods, $16 for a full duck -- are modest, and its carryout menu averages $1 to $1.50 cheaper for each dish. Peking Palace works at being a nice place, and succeeds at that work. It is not a Chinese restaurant worth traversing the Beltway, but it is the sort you would certainly like to have in your neighborhood.