While it is true that downtown Washington has been suddenly inundated with lavish Chinese restaurants, it is inexplicable to me why Ted Liu's has bee nearly empty at dinner. On a good day it is the best of the new lot, and even on a bad day it is no worse. Perhaps the secret is nothing more complicated than location: Ted Liu's is hidden in a courtyard between L and M streets; people may not know it is there.

What is there is one of the most beautiful dining room in Wahington no dragon-red cliche. The walls of this two-story restaurant are pale-blue quilted cotton. Forest green Formica tables are set with pink runners and napkins. The carpet is green, the leatherette banquettes are teal blue, the color scheme is as refreshing as disembarking on a Caribbean island. But there are touches of urban magnificence on this island. Embroidered silk kimonos are suspended between sheets of glass as space dividers and focal points. Niches in the walls hold arrangements of vases somewhere between Oriental and Art Deco. On the tables are small tiger lilies. And in the second-floor dining room, up a grand staircase, glass walls open the room to the sunlight or moonlight.

The lunch menu is simple: spring rolls, shrimp toast, spare ribs and a couple of soups as appetizers; a half-dozen each of beef, chicken, pork, seafood and vegetable main dishes. Prices are modest, particularly considering the size of the portions. The dinner menu is six pages long, its 14 appetizers ranging from fried bean curd skin to cold spiced duck, not to mention a half-dozen soups.

Once you know that Ted Liu is the originator of Potomac's Szechuan Garden, you probably know what to expect on the menu. The problem is that you don't know what to expect in terms of quality from day to day. Even the drinks -multihued Polynesian powerhouses -were one day sticky sweet, another day all right. I am sure about the egg rolls, however. They have been repeatedly gummy and starchy inside, their dough wrappers delicate but greasy.

With the fried dumplings (their spicy filling bursting with juices as you bite into them, their thickish dough pan-fried to crispness though again greasy) and the extraordinary fried bean curd skin (its gingery meat stuffing as light as a mousse and crunchy with water chestnuts, its bean curd wrapper light and crisp) you might put Ted Liu's at the top of the Chinese restaurant heap. The shrimp toast is also good -light, moist and crunchy -but it, too, is greasy. With a little more draining, those fried appetizers would be superb. Cold appetizers, too, come close to excellence. Spiced duck is moist and aromatic, rubbed with five-spice powder and roasted to just the right point. Ours, however, was icy in the middle. And wine chicken, similarly sliced and served cold, was beautiful pale white, perfectly cooked, but much too salty.

On three visits to Ted Liu's I found one superb, one rather good an one merely passable. To start with the best, Hunan beef was large chunks of steak coated with a glaze that included fresh ginger and a restrained touch of pepper, then quickly cooked so the coating was crusty, the inside faintly pink. A fire-eater might have perferred it more peppery, but it was a delicious dish, the beef counterpointed with just done broccoli florets. It was, in addition, beautifully arranged on the platter and decorated with carved vegetables. And that night jumbo shrimp, grilled in the shell, were cooked just as carefully (and were equally peppery), sauced with a thick tomatoey paste spicy and crunchy with scallions. A bit too sweet, but still a fine shrimp dish.

At lunch, though, the beef was in slices and had a mushy tenderized texture. Its sauce was overthickened and oily, though just as acutely seasoned as at dinner. Shrimp with cashews suffered also from an overthickened sauce, but again its flavor -this time delicate -was excellent, the shrimp themselves were of very high quality and the cashews were crunchy.

By the third visit, the doldrums seemed to have set in. Again the tomatoey Szechuan sauce -this time on a huge and beautiful whole fried fish that was unfortunately dry and tasted as if it had been frozen -was pungently seasoned but too sweet. The beef, this time with scallops, was again nicely seasoned but clumsily cooked and dried out. From seafoods to noodles, the seasonings were bright, the flavors intricate and delightful, but overthickening and greasiness prevailed.

The staff one night was sitting in a corner eating tiny snails that smelled wonderful. Why don't they serve them to customers? "They're not authentic Szechuan," was the answer. Ah, authentically is not all.

Still, one's chances seem good at Ted Liu's. And the niceties of perfumed not towels after dinner, service that is personable without being instrusive (except at the height of lunch hour, when it can be neglectful) and decorative touches to the food compensate for flaws here and there. Ration the kitchen's cornstarch and oil supply, and the food could be outstanding.

Besides, such a beautiful dining room deserves to be enjoyed by more people.