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Will the real "Shangri-La" please stand up? The prototype for this happy valley celebrated in James Hilton's 1933 novel, "Far Horizons" is found - depending upon who you’re talking to - from Hunza in Pakistan’s Karakoram Ranges to Bhutan, Mustang and several other Himalayan pockets.

Not to be outdone, the Tibetan enclave of Zhongdian in the southern Chinese province of Yunnan also claims to be "Shangri-La". But first you have to get there. This usually involves starting in Kunming, one of those places that visitors love to leave. Yunnan’s capital is far from unpleasant; however its own attractions can't compete with those in the surrounding region.

Before heading out of town to view exotic people and places, Kunming deserves a good look around. There are unexpected discoveries, such as wandering off Dongfeng Avenue into little Xinwen Street and finding its row of shopfront clinics where blind masseurs apply traditional Chinese therapeutic techniques to customers.

The Stone Forest, 100 km. (two hours drive) southeast of Kunming, is the city's most famous excursion. To walk amid its 80 hectares of erosion-sculpted limestone pillars is like undergoing a paleolithic Rorschach test. The Moon-Gazing Rhino, Everlasting Fungus, George Washington and Napoleon's Hat are among the interpretations that are placed on these spectacular karst upthrusts, some as high as 30 metres. The entrance fee to the park is 55 yuan (around A$11); because of midday crowds, it's best to visit later in the afternoon.

The Yunnan towns of Lijiang and Zhongdian are so far out of Kunming that they are best reached by plane. Lijiang, a traditional town 340 km. northwest of Kunming, sits in a highland valley of baize paddy fields and sunflowers. Among it population of 210,000 are many Naxi people, one of China's so-called "minority nationalities".

Our guide, Thomas, is an enthusiastic young blade whose wardrobe is more Nike than Naxi. He explains how the old town of Lijiang was reconstructed after a devastating earthquake in 1996. The cobbled squares, pagoda-roofed houses, willow-shaded canals and lanes are now postcard-perfect, and further enhanced for photographers by the Naxi women who stroll around in traditional garb.

The market square is filled with curios and the curious - Chinese and international tourists hunt for momentos from the trinket-sellers' carts or dine at the small restaurants which line the canal, selling everything from pizza to sushi. Lijiang invites you to linger, get lazy, go no further.

"We are very obedient people. When our government said 'destroy this', we did." Recalling these irony-laden words I had heard from an old Kunming Maoist, describing the Cultural Revolution, I expect that the Tibetan enclave of Zhongdian (190 km north of Lijiang) might still bear the scars of that 1966 upheaval.

Instead there is a prosperous township where Tibetan Khampas, Naxi and other Yunnanese, as well as Han Chinese, seem to rub shoulders without apparent friction. At the large Songzanlin Monastery, founded in 1679, volunteer artisans are finishing a giant new gompa (temple), a "living Buddha" monk is busy blessing Taiwanese tourists and 700 other monks are in residence. It all seems business as normal, but for a pointed absence of Dalai Lama portraits.

Our guide to Zhongdian is an ebullient Tibetan schoolteacher named Dawa - "Agnes", the Western name given by her English tutor, never seems quite right. She leads us through city markets bursting with lush vegetables, then on a short horseback expedition beside Napa Lake, and finally along Zhongdian's main thoroughfare, Long March Street - that sports both traditional Tibetan architecture and chain-smoking, serial-phoning Chinese businessmen.

Framed by mountains and mustard fields, the Tibetan-styled Gyalthang Dzong Hotel sits on the outskirts of town. Manager Craig Evans no longer thinks of Zhongdian as "frontier country", but his guests who undertake wildflower tours or mountain treks into surrounding Dechen County will find themselves in exactly that - the frontier lands of Tibet.

In the fertile lands around Zhongdian, Tibetan homes the size of small fortresses seem the most substantial housing I've seen in China - and the corn is as high as a capitalist's eye.

Zhongdian now promotes itself as the mythical "Shangri-La". And well it may. After all, it has brand new airport, the only one in the world whose official name is Shangri-La Airport.

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