Nanluoguxiang is a fun Hutong area with some unique souvenir shops with nicer products than some of the other tourist streets.
We spent a couple of hours strolling up and down having some snacks and buying gifts. There are a few nice cafes which are good places to relax, people watch and escape the bustle of Beijing (but be prepared for higher prices-50RMB for two coffees).
Highlight of our visit was the "Dumpling Lady" on a side street: we visited her many times. Not sure exactly which side alley she is on (see picture)- if you are heading North from the subway, turn right. Dumplings were cheap (5rmb per tray) and she was open early for breakfast (which was great when we were leaving for our Great Wall tour with the Downtown Backpackers Hostel-highly recommended).
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