This Inside China: Budget Travel guide has been started with the intent to cover conventional travel.  It is not intended to provide specific info on backpack travel opportunities which are better outlined by the Lonely Planet and Rough Guides.    

Your biggest expense: getting here 

China can be the most affordable great culture left to explore on your own.  If you have international travel experience, you can do it on your own and save money and time.  You can scale your eating, drinking, sleeping and transportation to local customs and standards of living, or live like a king.  A couple can enjoy China in its largest cities for less than US$50 a day, and much less in rural areas.  Getting to China can be the biggest expense, even on a per-day basis, so before you press the "buy" button on the internet to your international air tickets, stop, and remember, that you will also need a visa to enter mainland China. 

Airfares

China becomes affordable only when you get a great airfare.  It is easy to pay over USD $1,000 per person round trip from the U.S., and similar rates from the other continents.  When a couple spreads the airfare over a two-week vacation, it will be higher per day than the cost of hotels.  There will always be a sale to China when you want to go.  The problem is finding it and then knowing when to buy. 

Will the airlines run out of seats?  Get the tickets now?  Left behind with no way to get to China? 

This is very unlikely with all the new routes which have opened up in the last three years.  There are intermediate hub cities to and from China from almost anywhere now, so your choices to get here are numerous.  The question is not the former, "Can I get a seat?" but rather, ""How cheap can I get a seat?"

From the U.S., the are two types of sales.  First is the "new route" fare sale.  Some airline seems to always be launching a new route to China, and when it does so, it cuts rates to about 60-80% of normal.  Then the others from the same markets match it.  So it is easy to ride the wave of an introductory sale.  Routes generally are launched in peak air seasons for tourists or business, so you are not likely to see them in the off-peak months.  During those, you will find "excess capacity" fares.  These are when there are too many seats and too few passengers.  These fares usually pop up within four to eight weeks of departure, sometime as much as 10 weeks in advance.  It can be nerve wracking to wait for excess capacity fares.  For weeks the airfare will be from USD $1,200-$2,000 r/t, and then one day it becomes, for example, US$850.  If it is six weeks or so in advance, buy it.

There is one discount airline flying into China, Air Asia (airasia.com). It flies from several cities in Australia and all over Asia.  They fly into Beijing. Chengdu, Chongqing, Guangzhou, Guilin, Hangzhou, Kunming, Nanning, Shanghai, Shenzhen, Wuhan and Xi'an. Their hub is Kuala Lumpur and many flights will connect there.  Beware, it's on-time performance is below 80%.

 See this thread on a real-life international airfare situation.  http://www.tripadvisor.com/ShowTopic-...

China Travel Pricing

Before you think about the rest of the trip, here is how the Chinese travel industry prices its products, mainly internal transportation and hotels.  Travel is a perishable product, like the peaches in your supermarket.  If there are too many getting ripe, they go on sale.  Likewise, hotels and airfares in China are at the seasonal full price three months or more in advance.  If you are a compulsive travel planner for the China vacation of a lifetime, buy everything three months or more in advance and you will pay the premium price.  That is, you will be paying at least 25% too much, and more likely 50% too much.  On a USD $4,000 vacation, you will pay $1,000 too much guaranteed.  And perhaps you paid USD $2,000 too much.  The TripAdvisor forums indicate that people do this every day.  You just saved over a thousand USD dollars by reading this TA article on China Budget Travel.

Internal airfares in China are priced at list and then by discount, sometimes less than 50% of the full list price.  So there is a lot of room in airline pricing for a flight from Bejing to Chengdu or Shanghai to Xi'an.  (Caution though, as any fare involving Hong Kong is an international fare, not an internal fare, and thus not subject to these deep discounts.)  If you are on a competitive route, such as the examples between Chinese cities above, then several airlines will be flying many flights a day.  The early and latest flights will be cheapest in general, as well as one-stop flights.  Fares will vary by day of the week.  On Friday the airfare might be discounted around 20%, but on Saturday the discount might be 40%, depending on the type of routes.  Virtually all internal flights are priced this way.  Thus, before you nail down any itinerary in China, it is best to consult the last-minute airfares to determine how to save the most money. 

Many report that prices are cheap up front.  Those generally are highly competitive routes with several carriers.   Or prices do not decline for airfare or hotels as the arrival time gets closer.  This is true if you are tracking a particular flight on a particular day or specific hotel.  However, the whole matrix of low prices on flights and in hotels does change.  In other words, a particular city pair might never change for a particular date.  It might even go up closer to departure as those flights sell out.  However, you have options of days and airlines.  And if indeed prices start to inch up, buy if you need that flight on that day.  This is an art, not a science. Flexibility in itinerary planning saves you money.  Move a flight up or back one day.  Move a hotel stay to catch a weekend deal.  All sorts of bargains may be available.   

Likewise, in specific situations where there are few flights, little competition, you will see fewer discounts generally.  Some destinations always have high prices, such as northern Yunnan and Sichuan vacations areas.  Traffic here primarily consist of tourists, and many group tours buy bulk seats, sometimes leaving few for the general public.  Look into alternatives such as rail into Dali and Lijiang. 

Hotel booking

Hotel pricing is similar.  As you get within two weeks of arrival, empty hotels will be discounting.  You will find these most readily at the Chinese air and hotel booking sites such as www.ctrip.com, http://www.elong.net, www.travelzen.com, and others. Hotel rates between these sites can vary widely, so do not trust any site as the "best."  They are all the best when they give you the lowest market rate on a given day.  On top of this discount pricing model, the international chains (www.ihg.com, www.starwoodhotels.com, www.accor.com, www.the-ascott.com, etc.) will create their own international sales and deals.  So you might find a "buy two, get one free" deal, or a deeply discounted "Asia Sale" for the brand or chain.  When these pop up, they are sometimes in addition to the discount pricing.  So it is possible in some hotel deals to "double-dip," that is get the lowest close-to-arrival China price and also get a bonus from the chain.  You can readily get a five-star luxury hotel chain room for under US$100 in the largest cities on certain days of the year.  These same rooms will be sold for US$240-400 other days of the year.  You get these deals depending the flexibility you have in planning your itinerary in China.

Some international last minute booking sites have outstanding values, such as www.wotif.com and www.lastminute.com (UK edition).  Again in February 2011 you could save 35% per night comparing ctrip with lastminute.  There really is no logic to this.  A few strokes on your computer keyboard can save you hundreds of USD$ over a week's stay.  The overriding rule is to never trust just one website as the best or lowest price.

Booking package deals in advance rarely are a great deal, but may be what you are looking for.    Most of them will quote you rack rates, the full price, and throw in some extra features..  You must go into the details to see if you are getting anything other than the full price. 

Itinerary planning

First step, what do you want to see?

There are many ways to plan an international trip.  Given the pricing systems in China, here is one way to plan where you can get the lowest prices and still see everything you want.  Start your itinerary planning from the bottom up.  What specifically do you want to see in China?  Is it the Great Wall, or the giant panda bears or the steep karst mountains along the Li River?  Or all of those and much more?  Your first step is to make a list of the "must-see" things and then list the corresponding cities.  Be realistic and just list the top five or ten things that symbolize your dreams of China travel.  Perhaps it is hiking through Tiger Leaping Gorge, or laying out in the sun on a sandy beach with Russians and Chinese, or feel as if you are in old Shanghai (while it still exists).  Agree on this list and you have the basic outline of your trip to China.

Print out an internet map of China, and mark the top five or ten things on your list.  See how many clusters you have.  For your first trip to China, chances are you will have at least two or three centered around Beijing.  Then your trip might fan out to Sichuan, Yunnan, Shanghai, Zhejiang and Guangxi.  You should attempt only two clusters a week with a maximum of three if you like to run to trains, planes and taxis.  Five clusters in two weeks is the absolute maximum to keep your sanity, and you will have better memories of a relaxed and enriching trip with just three or four. 

So now you can match your vacation length (time on the ground in China) with the number of clusters of must-see places.   A typical trip might be Beijing, Shanghai, Zhejiang and Guangxi.  Most likely you will see the cities of Beijing, Shanghai, Hangzhou and Guilin/Yangshuo, plus maybe side trips to the Great Wall, Suzhou, Tongli, or Xitang.  This is just an example, not a recommendation as there is an abundance of must-see places and things in China.  It would be a great waste if everyone followed the same tourist trail.  Better that you match your specific interests, whether they be music, archaeology, architecture, history, natural scenic wonders  or general people-watching, to your itinerary.  

Don't worry about filling out your time at each place in this beginning of your itinerary planning.  That comes much later when everything else has been nailed down.  For now, you know how many places in your dreams of China travel will be seen in your first trip.  You have a general idea of how many intercity trips you will be taking and can allow proper time for packing, check-out, taxi/bus, transportation, taxi/bus and check-in.  As a rough guide, each change requires about a half day.  If you want to travel on China's overnight trains, you can save some time in this change in locations or eliminate it altogether.  However, in doing so you usually sacrifice some privacy in sleeping arrangements and some of your normal daily hygiene habits (such as a morning or evening shower).  You rarely save money taking a train over an airplane, so the savings of the hotel is the big savings.

The objective here is to plan a logical progression of clusters throughout China so you minimize travel time and cost, and so you do not backtrack and wonder why you went south to go north or vice versa.  There are many systems to plan your trip, and the main objective is enjoy as much as you can without wasting your time or money.

What transportation do you prefer?

China has a train network which is better in many ways than Europe's, however getting tickets is difficult for those with language skills.  In a few years China had gone from a wide network mainly of the proverbial "milk trains" to a wide intercity network of "fast" and "bullet" trains.  It seems every month another new route, another new train technology or higher speed is being announced.  Later in 2011, the average traveler will be able to go from Shanghai to downtown Beijing in the same or less time by rail than by plane, including all wait and taxi times at either end.  China's transportation infrastructure policy has been built upon rail, first as the most affordable way to move the most people, and now as almost the fastest.  Comfort levels and modern conveniences have improved as the trains' speeds have increased.  For the best overview of China train travel, see:  Train travel in China...  Bear in mind that no matter what an on-line train reservation agency might imply, there is no guarantee of ticket availability.  And although the train network is vast there is no automated booking system.  Therefore train seats actually go on sale from 20 to five days before departure.  As a result of the non-automated system, tickets are allocated to stations based on prior demand.  This means that these seats quickly get taken, and smaller stations do not get ticket allocations.  Peak periods (such as Spring Festival and National Week) mean that the Chinese will regularly wait in lines overnight at stations to buy all available tickets when the windows open in the morning. ***Note that as of June 2011, China is implementing automatic ticket purchases. At the time of writing this, one can only purchase ticket online for "fast trains" on certain routes and the website is only in Chinese: http://www.12306.cn/mormhweb/ ***

While trains move the most people in China, flights are plentiful and still easy to get.  With the rapid expansion of their fleets, the main China airlines, Air China, China Southern, and China Eastern, have increased their flights.  They have been joined by Hainan, Spring, Shanghai and some provincial airlines.  The safety record for all of them is fairly good, especially in the last few years when their new fleets are almost exclusively made by Airbus and Boeing.  Amenities are better than in the USA and the budget airlines of Europe.  Most longer flights feature a hot meal and the shorter flights usually have snack boxes.  Service is universally bilingual.  Weather and air traffic control (operated by the military) are the usual reasons for flight delays.  With younger plane fleets, mechanical delays seem to be rarer.  The best advice on flight timing is the same as everywhere, take the earliest flights you can as the day's weather and other air traffic delays have not yet accumulated into a major system-wide problem.   Try to avoid the last flights of the day.  They are perpetually late.

China does not have a hub-and-spoke flight system.  Rather it is a city-pairs system, from point to point.  Therefore, there is no baggage transfer or single check-in system for multiple flights.  If you are changing planes, even on the same airline, you deplane, wait for luggage, leave security, carry it to the next check-in counter (usually upstairs), check-in, check your bags again and then go through security again.  Any one of these steps can involve lines and delays.  Thus, it is usually preferable to take non-stop flights whenever you can.  Even a one-stop "through" flight with the same flight number may involve deplaning, waiting in the departure area and boarding a different plane for the continuation of the same flight.  For a connecting flight, you should allow at least two hours to transfer, including a small buffer for a late arrival, then the transfer process.  In a few airports, you might have to change terminals.  Check-ins usually cut off at a minimum of 30 minutes, sometimes more.    Thankfully, there is a plentiful supply of nonstop flights between all major cities.  If you are headed to one of the seasonal tourist destinations, such as Jiuzhaigou, Lijiang or Jinghong, Zhangjiajie etc., you will usually have to transfer at the provincial capital to get to your destination. 

The most frequent mass transportation service is provided by intercity buses.  You can go most anywhere in China on a bus, and they are  inexpensive.  On many intercity routes, buses can be a very good option - fast, comfortable and easy to get tickets on new empty highways. Sleeper buses are also a possibility if you wish to save a night's accommodation costs, although comfort is not great. On some bus trips be prepared to start with several people on the bus only to have another 10 board outside the bus station gate and pay the driver direct.   Some public buses also pick up and drop off passengers along the way (often on the side of the road), so they might not take the major highways.  This means they avoid the tolls as well and can add a lot of time to the "advertised" arrival time.  Bus stations are not ordinarily bilingual, even if they have a advertised "English Speaking" window.  The larger the station, the more confusion.  So get to the bus station early to sort things out and make sure you are in the right place at the right time.  There is now an option for independently travelling using a dedicated Backpacker Bus network in China with the launch of a new "Hop On & off" style Bus network called Dragon Bus China.  The service, which is not really budget, operates several routes around China and is similar to the Bus About concept in Europe or Oz Experience in Australia.    Public bus transport is also, in rare cases unsafe and people avoid night buses in rural areas because of  accidents.  

Travelling between close cities, say within 100 km more or less, private taxis become practical on a cost and sightseeing basis, however the prices vary greatly, especially for foreigners.  You should expect to pay less than USD $100, however this can greatly vary, a day for your private taxi which might be preferred in some locales where sites are not easily connected by other transport.  Also, there might be interesting indigenous villages and sights along the way of a route that you would otherwise miss by bus, train or plane.