If the business of Shanghai is business, the business of Hangzhou is leisure. Two hours south of Shanghai’s city centre by bus, train or taxi, this city of 6 million has built its economy around tourism, and it shows. The temples are well-maintained, the tree-lined streets are immaculately swept, the landscaping would put a Japanese temple to shame, and the people are both carefree and relaxed.

With both hills and water, Hangzhou is the very stuff of a traditional Chinese landscape painting. Built along the shores of West Lake, Hangzhou was described by Marco Polo as the world’s most beautiful city. Whether that still holds is open to debate, but it is certainly the loveliest city in mainland China. Boats ply the waters of West Lake – the jewel in the city’s tourism crown – as they have for hundreds of years. Opera fans gather around amateur performers in the parks after dark as lovers walk by hand in hand. Friends solve the problems of the world at outdoor teahouses and beer gardens into the wee hours.

Hangzhou’s lakeside neighborhoods have an Italianate flair that goes beyond the proliferation of espresso bars and pizzerias that have sprung up in recent years. It’s not so much the Ferrari dealership or the Casa Armani boutique that have just opened on tony Hubin Road that give the district its unmistakable Mediterranean feel. It is, rather, the attention to detail – the easy coexistence of old and new, the traditional Chinese rooflines and the walls clad in what appears to be limestone, and the natural materials used to pave the streets and walkways that crisscross the district.

As capital of the kingdom of Wuyue during the Five Dynasties and the Southern Song, Hangzhou is steeped in history. One of its most famous products is Dragon Well Tea, reputedly one of the country’s ten best types. There are tea farms and teahouses in nearby Meijiawu. Teahouses – many housed in lovely traditional style buildings along the shores of West Lake – also dot the urban landscape. Silk, which has been produced in the region for more than 5,000 years, is the city’s other most important product. Other local specialties include Wangxingji fans, West Lake silk umbrellas and Zhang Xiaoquan scissors.

Surrounded by tree-clad hills on three sides, West Lake – the diamond in Hangzhou’s tourism crown – is reputedly the most beautiful urban lake in China. Start by hiring a boatman to tour the lake by paddle boat, which will set you back 80 yuan for a one-hour voyage. The physically fit might want to explore the lakeside districts on foot, but make sure to wear good walking shoes. Others might prefer to reach some of these sites by taxi as the distance between them can be lengthy.

The only natural island in West Lake, Solitary Hill Island is home to several ancient relics, including imperial palaces from the Southern Song and Qing Dynasty periods. Attractions include Zhongshan Park, named after Sun Yat-sen, popularly known as the Father of Modern China, and the Xi Leng Seal Society, an academic community devoted to the study of seal-cutting. The Crane Pavilion, built in memory of Lin Bu, a poet of the Southern Song, is located to the West and is abloom with plum blossoms in early spring.

The historic structures lining Beishan Street include both traditional Chinese and Western style buildings from the earlier period of the last century. While many are still under renovation, others are already up and running, housing restaurants, cafes, exhibition spaces and museums.

Located on tony Hubin Road, the awkwardly named Hubin International Boutique Compound is a collection of beautifully upgraded low-rise structures housing several coffee houses, upscale European boutiques and nightclubs, and more are on the way. There is plenty of action even on weeknights at the Touch Club (9 Hubin Road, Tel: 8717 2588), Channel No. 9 (3 Hubin Road, Tel: (0571) 8717 2611) and babyface bar.,club.lounge (126 Pinghai Road, Tel: (0571) 8779 1168). The Ferrari dealership (129 Pinghai Road) has an upstairs espresso bar with outdoors seating on a small terrace overlooking Hubin Road. Boutiques run from a Casa Armani for interior design to Dolce & Gabbana, Steffano Ricci, and Ermenegildo Zegna.

Sitting at the heart of the Nanshan Road Arts and Leisure district, Xihu Tiandi comprises restaurants, coffee houses, bars, shops and cultural venues – all housed in restored grey buildings and connected by meandering paths amid lush landscaping. There are the inevitable Starbucks (House 6, 147 Nanshan Road, Tel: (0571) 8702 7990) and Haagen-Dazs (House 5, 147 Nanshan Road, Tel: (0571) 9702 6180) outlets as well as the Yongjin Lakeside Teahouse (House 1, 157 Nanshan Road, Tel: (0571) 8702 6098), the Xihu Crystal Jade Garden Restaurant (House 10, 147 Nanshan Road, Tel: (0571) 8702 6618) and Hong Kong-based Va Bene Italian Bar & Grill (House 8, 147 Nanshan Road, Tel: (0571) 8702 6333).

Housed in a beautifully renovated contemporary villa on the shores of West Lake, the Hangzhou Charming Music Library (Beishan Road and Huansheng West Road, Tel: (0571) 8703 8678) is reputedly the first coffee house of its type in the Chinese mainland. Each table has a mini-stereo and headphones. For the price of the cup of coffee or a pot of tea, you can listen to one of the more than 5,000 CDs on hand. Western classical music predominates, but there is also a selection of Chinese opera and some popular Mandarin soundtracks.

Located near the shores of West Lake, the Ancestral Hall of Emperor Qian (1 Qiangwangci Road, Hangzhou, Tel: (0571) 8707 7321) is a complex of temple buildings with deep crimson walls and dark brown tile roofs was built in homage to five emperors of three dynasties.

Hangzhou’s historic and scenic sites are not limited the lakeside districts. Take Hefang Street, a strip of traditional Chinese-style two- and three-story buildings that has been closed to vehicles. The Hua Bao Zhai (231 Hefeng Street, Tel: (0571 6332 5439) sells calligraphy, books and scrolls in time-honoured Chinese surroundings. Traditional teashops and pharmacies rub shoulders with some rather tacky souvenir shops that, predictably, seem the most popular with tourists. There are also antique shops, restaurants, cafes and a couple of pubs.

Beautifully lit at night, Chenghuang Pavillion (3 Wushan, Shangcheng District, Hangzhou, Tel: (0571) 8703 3300) is one of the two most prominent traditional structures topping the peaks surrounding West Lake. Located atop 94-metre-high Wu Hill, the seven-storey structure provides stunning views of West Lake and the rest of the city.

The Pagoda of the Six Harmonies (16 Zhijiang Road, Hangzhou, Tel: (0571) 8659 1401) is a chocolate brown 13-storey brick and structure rising 59.89 meters over the landscape, affording striking views of the Qiantang River, famous for its spectacular changing tides. Founded in 970 during the Northern Song, it has been rebuilt numerous times through the years. The final resting place of Wu Song and Lu Zhishen of the legendary Outlaws of the Marsh, it is named after the six Buddhist harmonies: heaven, earth, north, south, east and west. With a light on top, the original pagoda served as a navigation tower.

See how the other half lived in the Former Residence of Hu Xueyan (18 Yuanbao Road, Hangzhou, Tel: (0571) 8682 1131). This rich man’s compound, the Former Residence of Hu Xueyan (1823 – 1885), one of the most powerful and wealthiest businessmen during the Qing Dynasty, comprises moon gates, fish ponds, arched bridges, latticework windows, rock gardens, bonsai plants and balconies.

Dating back to the Eastern Jin Dynasty, Lingyun Temple (1 Fayun Lane, Hangzhou,
Tel: (05710) 8796 8665) contains a gilded statue of the Sakyamuni. At 24.8 meters, it is the tallest sitting Buddha in the country. You enter the temple through a bucolic park called Flying from Afar Peak.

Situated at the foot of Qixia Hill, Yue Fei Temple (1 Houshan Road, Solitary Island, Hangzhou, Tel: (0571) 8799 6663) in its current incarnation was rebuilt during Emperor Qianlong’s rule during the Qing Dynasty.

Cool and shady, Tiger Springs (39 Hupao Road, Hangzhou, Tel: (0571) 8798 1900) is a calm oasis of trickling creeks and croaking crickets. Unfortunately, the peace and quiet is occasionally broken by tour guides describing the landscape through loud hailers. Reputedly one of the three best-known springs in the country, the water is considered perfect for making Dragon Well Tea. The Green Cliff, Temple of the Monk Ji Gong and the Li Shutong Memorial Hall are all worth a visit.

Regular performances of Shaoxing Opera are held at the Yellow Dragon Cave Taoist Temple (69 Shuguang Road, Hangzhou, Tel: (0571) 8798 5860). According to legend, a dragon was consecrated at the site to pray for rain during the Southern Sung.

For a bird's eye view of Hangzhou, you can't beat Yuhuang Hill (1 Yuhuang Hill Road, Hangzhou, Tel: (0571) 8791 5091). It is reputedly the best in the city.