Harrison Lee is a past president of the Washington Chinatown Development Co. Inc., contrary to his claim in a profile of the Chinatown community published in the July 12 Real Estate section. Lawrence Y. Locke is the current president.

Tony Cheng's new Mongolian restaurant in the heart of Chinatown looks like it belongs in Georgetown. Its subdued, soft-plum interior and marble foyer with crystal chandeliers stand in sharp contrast to the more traditional Chinese restaurants with their minimal decor and simple, inexpensive fare.

"People think of Chinatown and they think dirty and cheap," Cheng said. "I want this restaurant to be better. I want this restaurant to say there is a new Chinatown."

Cheng's half-million-dollar investment in fine dining in Chinatown may well mark the beginning of a long-awaited economic renaissance for the deteriorated neighborhood in downtown Washington.

But that same renaissance may also hasten the decline of Chinatown as a residential neighborhood because of sharply increased land values in the 13-block mixed commercial and residential neighborhood immediately to the east of the D.C. Convention Center.

City Council member John Wilson (D-Ward 2), who represents Chinatown, said that it is too late to think of Chinatown as a residential neighborhood.

"There hasn't been any new housing in Chinatown since the Wah Luck a rent-subsidized, 153-unit high-rise built in 1982 ," he said. "And I don't think we will see any more housing there because of the land costs. Chinatown will become a commercial and tourist area only."

In 1980, the last census available for the tract that includes Chinatown shows that only 487 Asians of a total population of 1,085 lived at that time in the area bounded by Fifth, Ninth and G streets and Massachusetts Avenue NW. In the whole city during that same year, there were 6,636 Asian residents and 82,148 in the greater Washington area.

Those figures are challenged by Harrison Lee, president of the Chinatown Development Co., which built the Wah Luck, meaning Chinese Happiness. He said he believes there were more Chinese living in Chinatown than the census showed, but they were not counted properly because the census takers did not speak Chinese and missed a number of residents.

"We have no exact population figures for Chinatown," he said. "Nobody does. We would have to go door to door to make an accurate count."

Whatever the population, housing in Chinatown is limited. Other than the Wah Luck, it mostly consists of row house apartments and rooming houses, many of which are in poor shape. Lee said that most apartments are one- and two-room flats that rent for an average of $200 a month per room.

Few of the houses in Chinatown are occupied by their Chinese owners. According to the Rufus S. Lusk & Son real estate reporting service, most owners live in the suburbs and rent their Chinatown property.

"The landlords get what they can for those places," Lee said. "Right now there is big demand for housing because of the new restaurants which have opened, but there is no housing available. We have reached a saturation point."

Lee said that two rooming houses in the 600 block of I Street were recently demolished, making it all the more difficult for employes of the new restaurants to find housing in the neighborhood.

Lee said that the one- and two-bedroom apartments in the red and gray Wah Luck high-rise would rent for $500 to $700 a month if market rates were paid for them. Because rents in the building are subsidized, tenants pay varying amounts of rent, up to 30 percent of their income.

He said the number of restaurants has risen from 12 in 1980 to 25 today and that there are now six grocery stores instead of three.

There are other signs of economic development in Chinatown.

Construction of the controversial, $1 million ceremonial archway across H Street near Seventh Street NW was started late last month. The elaborately ornate arch, which is being jointly financed by the District and Peking governments, was hailed by Mayor Marion Barry in 1985 as an effort to enhance Chinatown and to create "a visual symbol of the cultural and economic exchanges which will be part of our sister city agreement and part of my program to make the District a visible world-class city."

The arch was opposed by the Chinese Consolidated Benevolent Association, many of whose members fled China after the 1949 communist takeover. They said they were offended by the concept of a "communist arch."

Bosco Lee, past chairman of the association, said that his group as a counterpoint has decided to build its own arch at Fifth and H streets NW.

"We have raised $300,000 so far," he said. "Our goal is $600,000 and we expect to have our arch built by 1987."At the intersection where Lee's group plans to construct Chinatown's second arch, an 11-story hotel, the $11.9 million Comfort Inn, is partially completed.

The 197-room hotel will serve the "middle market," according to sales director Trish Foshee. "We chose to locate in downtown Washington so as to attract customers from the Convention Center on the far edge of Chinatown as well as tourists," she said.

Two other major projects within Chinatown, the Techworld complex just south of Mount Vernon Square and the Far East Trade Co. along Seventh Street between G and H streets NW, have cleared their properties, but have yet to begin construction, leaving Chinatown with an abundance of vacant lots. The fate of Techworld, a high-tech trade mart, is currently tied up in lawsuits.

Several new restaurants, the arch and the hotel are the bright spots in an otherwise faded neighborhood where five non-Chinese furniture stores, two major black churches and a huge branch office of the District government are mixed in with the low-rise, Chinese-owned businesses and row houses.

Dr. Toon Lee, a former longtime Chinatown resident and chairman of the Chinatown Steering Committee, said he has watched the Chinese population decline during the 20 years he has practiced medicine from his parents' house at 616 I St. NW.

Lee said that when he opened his office 20 yearstwo decades ago, all his patients were Chinese. Now, he says only about half of his business comes from the Chinese community.

"I am worried that eventually there will be a Chinatown with no Chinese," he said. "Many of the large developers are non-Chinese. The development in Chinatown is a positive step, but not if we cannot stay here when it is all over."

Lee also cited the rapid increase in the assessed value of property within Chinatown as yet another deterrent to maintaining the Chinese population. He said that his parents' real estate taxes on the house where they live doubled to $10,000 three years ago and that they are now facing yet another increase of 30 percent.

City records show that Lee's parents' three-story row house had an assessed value of $66,750 in 1977, $285,000 by in 1982 and $695,000 this year, almost entirely attributable to increases in the value of the land.

One of the residents of the Wah Luck is 67-year-old Foo Chow Lin, who has just opened his fourth restaurant, the Hong Kong Palace at 807-809 Seventh St. NW, which features a carryout for fully cooked whole ducks, chickens and pigs. His brightly painted restaurant, which opened in late June, resembles many of New York's Chinatown restaurants with the cooked meat displayed in steamy, front windows.

After several decades of owning restaurants in other parts of the city, Lin decided to open his first restaurant in Chinatown.

"Business is now very good in Chinatown," he said. "I expect to make back my investment in one to two years."

Lin's residential and business situation represents the dilemma of those Chinese who want to invest or live in Chinatown.

Lin believes that his $150,000 is well invested in his new restaurant because of the increased economic activity in Chinatown. But he said he is unable to buy the building which that houses his restaurant -- assessed at $742,000 in 1985 -- because it is too costly. He said he was only able to obtain a three-year lease.

And when Lin decided to move back to Chinatown after living in the suburbs for several years, the only apartment he could find was in the high-rise Wah Luck.

Wilson said the expensive new restaurants, the arch and the hotel are all indicative of the future of Chinatown.

"Considering the proximity of Chinatown to the Convention Center, commercial development is the best way to go for that area," Wilson said. "It is just too expensive for people to live in Chinatown or any other far downtown neighborhood.

"Downtown is a lost cause as a residential neighborhood," he said. "Progress doesn't come without pain. But on the other side, all that progress will benefit those in the Chinese community who own investment property there."