The word on the street in Chinatown here is that the China's gold-medalist women's volleyball team went easy on the Americans last week, letting the United States win a match before beating them Tuesday in the final.
This unlikely folktale has sprouted amid the general exuberance of Chinese nationalism set loose worldwide by China's splashing emergence as an Olympic power.
In China, the women's volleyball victory brought people to the streets, setting off fireworks, according to Zhang Tingquan, sports editor of the New China News Agency, who is in Los Angeles with a 30-member sports staff. Chinese television, which had originally planned two hours of Olympic coverage a day, is now broadcasting seven hours a day, by public demand.
And in Los Angeles, a Chinese woman behind the cash register at a Chinese restaurant felt much the same way. ''We're very proud. ... I'm not for communists, but at least they are doing something constructive.''
''Everybody's happy,'' says Calvin Fong, secretary of the Chinese Consolidated Benevolent Association in Chinatown. His organization supports the Taiwan government rather than the Communist regime of Peking, but politics has been cast aside for the moment.
Kuomintang or communist, says Mr. Fong, ''everybody's very proud.''
This adds up to an effective bit of cultural diplomacy for the Chinese. ''I think they really are cultivating an image of quiet, dignified strength and pride,'' says Richard Baum, a professor of political science at the University of California at Los Angeles.
This image of strength, Dr. Baum adds, ''is very powerful in overcoming political doubts about the Peking regime'' in world opinion, especially among Chinese outside the mainland.
The Chinese team has been popular around the Olympic city, partly for their graciousness as winners, losers, and guests at many receptions. The Maoist slogan ''friendship first, competition second'' - recalling days when the Chinese occasionally would purposely lose a ping-pong match to flatter their foreign opponents - has been set aside, but not entirely forgotten.
Observers like Baum and Gilbert McNeill, a vice-president at Security Pacific National Bank, see Chinese Olympic diplomacy as dovetailing with its negotiations with Britain over the future of Hong Kong. Although the negotiations are private, the talks appear to be going smoothly, and the Chinese are showing great respect for Hong Kong's free-market economy, Mr. McNeill says.
This display of good citizenship, respectful of other systems and points of view, says Baum, may eventually help the Chinese toward a long-sought objective, the peaceful takeover of Taiwan.
Chinese athletes and officials have been especially warm toward their Taiwanese competitors here, carrying their ''united front'' effort to win the hearts and minds of Chinese in Taiwan, Hong Kong, and Singapore into the athletic realm.
Mr. Zhang of the New China News Agency says his reporters cover Taiwanese athletes closely. ''We hope in the future we will have one single team.'' He adds, however: ''It seems to me they have been avoiding meeting us or talking with us.''
Mainland China withdrew from the 1956 games because the International Olympic Committee had adopted a two-China policy.
Chinese officials have been planning the nation's reentry into the Olympics for years.
Baum, who has accompanied American sports delegations to China and talked with top Chinese athletic officials, says that as early as 1975, officials were anxious for an Olympic debut, but felt their athletes were not ready.
''They wanted to make a big splash,'' he says.
The Soviet-led boycott of the Los Angeles Games has allowed the Chinese a less crowded forum for making a strong Olympic entrance.
The Chinese women's volleyball team earned China its 14th gold medal Tuesday by beating the United States team. China followed only the US in the medal counts, and had already done better than even the Chinese themselves had expected.
The Chinese are not sports fans in the sense that Americans are, notes Perry Link, chairman of UCLA's East Asian language and culture department and a translator for the American ping-pong team in China in 1972.
Chinese current enthusiasm for sports, he says, is an interest mainly in the country's world profile.