Chengde is not an ideal location for families with small kids. Our kids enjoyed the cable car ride at Hammer Rock and the boat ride at the Mountain Summer Resort. If you have small kids, I recommend you stay in a hotel with a swimming pool. Also find out whether swimming is allowed all day (we travelled to a hotel nearby Chengde Hotel to swim, only to find that the public was only allowed to swim in the afternoons due to swimming coaching).
Restaurant Tip : Restaurant right across the road (don't recall the name, but has red lanterns in alley next to it) has lovely atmosphere and extensive menu, including Western dishes. Pizza quite good.