Cocktail culture makes an unlikely debut in a far-flung corner of China.

There were many skeptical eyebrows raised in 2001 when, in a bid to boost tourism, the Chinese town of Zhongdian and the surrounding region were officially renamed Shangri-La. Whether visitors are genuinely attracted by the area’s claim to be the location of James Hilton’s classic 1930s novel Lost Horizons, or whether they come (as they always have done) for the spectacular mountain scenery and ethnic Tibetan culture, isn’t clear. But what is indisputable is the local tourism boom, facilitated by massive infrastructure projects- from a new airport five years ago to new highways today. What will visitors who make it to this once fabled and remote part of Yunnan province want when they get there? To a new generation of local and expatriate entrepreneurs, the answer is drinks and cafés and bars are everywhere. In the highly improbable surroundings of Zhongdian’s old quarter- known in Tibetan as Dukezong- there are now some 25 cocktail bars.

“If I had a dollar for every time somebody came in to just look, I wouldn’t need to sell alcohol to pay the rent,” says the manager of the Cow Bar, Peter Larsen, as a group of brightly clad Tibetan women peer into his premises. The Cow Bar (housed in a former barn) and other establishments have become a subject of great local curiosity. “People just can’t believe that we’re using this animal’s den to serve martinis.”

But that kind of juxtaposition is precisely the charm of Zhongdian’s cocktail circuit. With steep, cobbled lanes, wooden houses, courtyards and prayer flags fluttering in the wind, Dukezong was little more than a ramshackle residential area of 15,000 inhabitants two years ago. Now, it’s being buffed and polished for the outside world, with B-52 cocktails served alongside bai jiu, the local firewater, and macchiatos almost as readily available as yak-butter tea. The bars attract a lively, mixed crowd of residents, young travelers, artists and adventurers, doubtless hoping to find their own Shangri-La. Chances are they’ll do a better job than Hilton, who never went to China, or Tibet for that matter.

Our pick of Zhongdian’s hot spots:

The Cow Bar
Located behind a temple, the Cow Bar ((86-887) 8288774), comes with earthen walls, a pool table and plenty of quirks (there’s a mannequin’s hand poking through the ceiling, for one). Everyone seems to pass through- even the county chief has dropped in for a beer and a game of pool.

The Raven
With jazz and coffee in the afternoons, and hip-hop and martinis in the evenings, this expat-owned bar ((86-887) 8289239), is Zhongdian’s trendsetter.

The Treehouse
Under Tibetan-Hawaiian management, the laid-back Treehouse, ((86-887) 8231296), is an ideal place to sip tea and snack on sunflower seeds while warming your toes beside a wood fire.

Hazel Bar
Run by a former policeman from Xi’an and his wife (after whom the bar is named), this friendly pub, ((86-887) 8223210), consistently hosts the noisiest, merriest parties in town. The food is excellent; and there’s an attached guesthouse. Don’t forget your earplugs if your threshold for bar-room rowdiness is low.

This article appeared in a May 2005 issue of TIME Asia.