I am an American who lives in China, in Zhejiang Province in Hangzhou. I have been here for 11 years and just today have gotten another year Residence Permit until June 30, 2013.

I have travelled or been in Yunnan about six times since I have been in China. Granted, I have only really been in Kunming, Dali and Lijiang. Lijiang I went in 2003 and we were barely there a day. Long story.

I want to retire there. I have a Chinese wife which makes living there on an L visa maybe not that difficult. I would like to live in Dali or Lijiang with a small hotel, computer room and maybe bar. This is a fantasy perhaps, but I would love to live there and do something.

What I like about Kunming.........

THE WEATHER! At least the summer weather! Hangzhou is stiffling in July and August. Horrible 40* C weather with full on humidity. I remember walking off the plane to the outside in Kunming and have that soft, coll, conforting, slightly breezy 25* C afternoon weather that intoxicated me.

But I know firsthand that the sun's UV rays are very stong there because of the altitude. I know, I got burned hanging my elbow out of a truck window. So, even i the weather is 25* and heavenly, the UV rays can cook me and I wont know it until an apple hits my mouth and I am Thanksgiving dinner.

What is the winter there around Chinese New years?

Kunming for a city of this size has a lot of venues and a lot more options on "foreigner food" or bars/clubs.

What is bad about Yunnan or Kunming? Kunming is probably the cleanest Chinese city I have ever been in. There are some funky parts (seen them) but has every city. But a nice city?

Earthquakes?

There are too many foreigners in kunming, that is whats bad about it. Please go to Dali or Lijiang.

If you are thinking of a bar/hotel. The business culture is black, even for China.Ditto local government.

I really like Kunming. I do not see much that is bad about it, to be honest.

Chili & salt - Yunnan loves its chili and for various reasons - salt the hoorah out of everything.

Yunnan or most places in China are a great place to live. Unlike the USA, Yunnan is not a police state. SWAT teams do not raid homes and kill the people in their own homes. People in the streets and in buses and trains are not frisked by police doing random searches and the Chinese military does real humanitarian work here as evidenced by the earthquake of 2008 and the annual floods in certain regions of China. The military does not patrol the streets and they are not flying around in black helicopters doing terrorist training in the streets (Urban Warrior). Chinese military does not shoot its own residents during natural disasters like the USA did during Katrina when it killed people trying to leave a flooded area by crossing a bridge to higher ground due to flooding. Chinese are not racists and foreigners are welcomed from all corners of the world. All people in China must pay income tax but they are unaware of it because it is done by employers and 80% of the people do not need to file income tax (Only rich and business owners). There are no IRS raids on people here in Yunnan that confiscate all your property. China does not spray chemicals on its own people with airplanes (Chemtrails). Anyone can buy penicillin or simple antibiotics over the counter without paying a doctor $100-$200 for a doctor's visit to get a presciption. The infrastructure in Yunnan is at most 8 years old (Dali/Kunming highway) or as new as today as evidenced by the new airport and metro line as opposed to the crumbling infrastructure of the USA that was built between 1930 and 1950. 70% of Americans are overweight and 50% are obese due to the garbage that is sold as food. Here in Yunnan, fresh vegetables and fruits can be found anywhere. China has a huge population but it does not have the homeless problems of the USA. 60% of Americans have some sort of addiction; drugs, alcohol, sex, gambling, rage, shopping, etc. and the USA has the highest rate of mental illness despite its small population because of the high stress. 30% of adults are on prescription drugs such as zoloft, xanax and prozac and 20-35% of children are on prescription drugs for behavior problems such as ritalin and lithium and the number keeps rising each and every day.

Unlike in Beijing, it's impossible to find nice shoes for big feet in Kunming. The alternative music scene is basically non-existent, the local art scene a bit lacking, the western food options are mediocre, and muslim (i.e, good) bread is too hard to come by. Except for this, Kunming is an amazing place.

Most of Yunnan is pretty nice, but my top 3 complaints are:

1. racism - racism is very bad, unless you have white skin... but if the economy tanks don't expect that to last.

2. lack of water

3. drug abuse - chain smokers everywhere, and of course please destroy your liver at every meeting/event possible...

1. It's getting too big (Kunming that is)

2. Too many foreigners moving here and trying to turn it into a sort of PC Chinese version of " insert name",if you don't smoke, don't drink (or like others that do), don't come, move to Boulder CO, instead.

3. I'll have to get back to you on that .

I have lived in both Hangzhou (only two months) and Kunming (one year), and, while I've grown to love Kunming, and plan to stay here another year, I must say, compared to Hangzhou and other more developed eastern cities, it feels like quite the backwater (15 years behind Hangzhou?). I guess you could say that's part of its charm.
But if you plan to live here (totally different than just visiting a place), be prepared for some striking contrasts from Hangzhou. Kunming is much more chaotic and less organized. Some of the things that stand out most to me:

Noise pollution — Unnecessary horn-honking, e-bike alarms and loud lugey-hocking are constant.
Air pollution (micro) — While Kunming's general air quality is still better than HZ or most cities in China, it is nearly impossible to walk or bike for more than a minute or two without getting one of the following in your face/lungs: black bus exhaust, cigarette smoke, construction site dust (large portions of the city are under construction).
Hazards — One needs to always be on alert for: blatant traffic violations, oblivious pedestrians, anything-goes on sidewalks (bikes, silent e-bikes, uneven pavement)
Cleanliness — dirty buildings and sidewalks, restaurants, bathrooms.
Unprofessional business culture in Yunnan — very difficult to get things done or depend on people to deliver on what they say they're going to do. Seems that people are less educated here and more set in their (inefficient) ways.
There are many exceptions, of course, and these are just my impressions. Am interested in hearing what others think...

On the positive side, besides what's already been said, because Kunming is smaller, it's easier to get around in and get to know people. There's a vibrant live music scene and student life — feels more laid-back and less touristy than HZ, easy to get out of town for fun day trips like mountain-biking, hiking, etc.