One of my most fantastic budget trips is my trip to China. I travelled around China for 5 weeks on a budget. First of all China is fairly cheap compared to Europe. So for an European it's not a difficult task to travel on a budget in China.
China is unsurprisingly a really huge country, so my advice is that you concentrate on specific regions, if you don't like too much transportation. And lesser transportation means lesser expenses. I personally don't mind transportation, especially not when it is possible to travel with night trains. When travelling with night trains it is possible to visit more areas while not using precious daytime.
I spent most of my time in China enjoying life, sightseeing, meeting other backpackers and partying. In a backpacker perspective China is fairly different from other typical backpacker-destinations like India and Thailand. China is for example more party-like than India, but far from the full moon parties in Thailand.
I visited Shanghai, Yangshou, Lijiang, Chengdu, Xian and Beijing. And I highly recommend all of them and especially Yangshou and Lijiang. Expecially the trek at Tiger Leaping Gorge at LIjiang is amazing. All inclusive I spent around 1.600 euros, including airfare, insurance etc.
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