Erhai Lake is the second largest lake in Yunnan Province. Its main village, Caicun, is a maze of unpaved alleys and mud houses. On the eastern shore of the lake is the picturesque Bai village of Wase, and just offshore is Little Putuo Island (Xiao Putuo Dao), named for the mythical mountain home of Guanyin, the Chinese Goddess of Compassion. There is a statue of the goddess, who is said to guard the lake??? waters, in a temple on the island.

Dali is the ancient capital of both the Bai kingdom Nanzhao, which flourished in the area during the 8th and 9th centuries, and the Kingdom of Dali, which reigned from 937-1253. Situated in a once significantly Muslim part of South China, Dali was also the center of the Panthay Rebellion against the reigning imperial Qing Dynasty from 1856-1863. The old city was built during Ming Dynasty emperor Hongwu's reign (1368??398).