XIAMEN, China — On a back street next to a hardware store and a few holes-in-the-wall frying up rice and dumplings after sunset in this breezy Chinese city located on an island across the ocean from Taiwan is a tiny bar called Thank You. Situ Zhiwei and his wife Yu Jing, who goes by the name Cotton, own the bar and also live there with their cat.

This story first appeared in the March 6, 2012 issue of WWD. Subscribe Today.

On the walls of Thank You hang posters of collections by Cotton, a designer who sells her clothes on Taobao, China’s largest e-commerce site. There are also drawings from Zhuang Xiao-ke, a local artist. In a corner, below the loft where Situ, Cotton and the cat sleep, is a pile of stereo equipment used by DJs who spin trance and trip hop on weekends. In another corner, a stack of CDs from 44, Situ’s electronic band, which are next to a stack of the most recent issues of Salt, an indie magazine edited by a woman who calls herself Muffin. (Her Chinese name is Guo Jing-ya.)

A number of cities across China have enclaves of artists and other creative types. Beijing, for example, has “798,” a trendy district of galleries, as well as Song Zhuang, an art village outside of the capital. In Shanghai, there is the Moganshan Art District and a street called Taikang that is filled with cutesy cafes and boutiques selling Communist kitsch and clothes and paintings from domestic designers and artists. Chengdu, an inland city, has the North Village Art District.

But there is perhaps no other community of artists like the one in Xiamen. It consists of a small but growing group of twenty- and thirtysomethings who say they moved to this seaside city because of its chilled-out hippie vibe underscored by a sense of freedom to create what they want and to be who they want, combined with a feeling of disillusionment with the rat race in places like Shanghai and Beijing where millions of young people with college degrees fiercely compete for employment in job markets that simply are not big enough to absorb them all.

“Here I can calm down and focus and have more fun,” said Situ, whose Thank You bar is the de facto hangout for the creative crowd almost every night. “When you live here, you have to have a strong passion to do things. We are chasing real stuff, real emotions. We are all really real people.”

Up the hill from Thank You is a cluster of low-rent studios occupied by painters, musicians and clothing designers, which are above about a half dozen boutiques selling their wares. About 15 minutes away by taxi in a nondescript apartment building is the showroom of Min Liu, a fashion designer from Fuzhou, the capital of Fujian Province, where Xiamen is located.

Like Cotton, Min sells her vintage-inspired designs on Taobao. Another Xiamen-based independent designer named Zhe Zhi has garnered thousands of fans on the e-commerce site and via stores that he has in several major cities.

“Xiamen is very quiet and clean, and the energy here is very free,” said Min, who studied at the London College of Fashion and later moved to Xiamen to work as an assistant designer for Ports International, the Canadian brand acquired by a Chinese entrepreneur in the late Eighties. “I believe everything is developing organically, and I think that is a real gift for the city.”

Unlike art communities in other urban areas that usually require the local government’s blessing before they’re built (or risk being torn down), Xiamen’s creative community is organic and unorganized, exuding an ambience that envelops the entire city rather than a designated space.

There are, however, some historical and more contemporary factors that help explain its formation.

Taiwan, which is visible on a clear day across the Taiwan Strait, has had considerable economic influence on Xiamen. When the city was made a special economic zone in 1980, Taiwanese money was one of the fastest-growing sources of foreign capital. With it followed Taipei’s culture industries — pop songs, fashions, celebrities — that continue to influence the island today.

The city is home to several arts colleges, including Xiamen Academy of Art and Design, and, according to Situ, a growing number of Europeans are opening galleries around town, such as the Chinese European Art Center at Xiamen University. There are a number of factories in the area that mass produce oil paintings and various other types of artwork as well.

Additionally, Xiamen has become the home for the headquarters of a number of quickly expanding Chinese clothing brands, including Ports International; Septwolves, which is owned by a tobacco company, and VLOV, a men’s wear line whose founder, Richard Wu, was invited to show his collection at the Mercedes-Benz Fashion Week in New York in September.

The brands are attracting domestic and foreign fashion designers, some of whom, like Min, end up leaving to start their own lines.

International retailers are setting up shop in the city to tap into its increasingly wealthy population involved in industries ranging from textiles to telecommunications.

In May 2010, Coach opened its first store in the Paragon shopping mall, which is attached to a hotel and office complex. Other tenants include Burberry, Gucci, Emporio Armani, Ralph Lauren and Hugo Boss.

According to Jonathan Seliger, head of Coach’s China operations, the brand’s high-end men’s collection has been performing particularly well in the Xiamen store, which is a dual-gender retail concept featuring separate boutiques for men’s and women’s accessories.

“Our store is doing very, very well, and it is doing well in the higher end of the spectrum,” said Seliger, adding that up to 20 percent of sales are from men. “I think it bodes well for additional points of sale in the city.”

While Seliger said he had heard of new retail space slated for construction in the next year or so, for now, it seems, real estate, at least for luxury brands, is fairly limited. Apart from the Paragon, the Marco Polo, a hotel located next to a sprawling park in the center of the city, is the only other outlet for luxury retailers. Salvatore Ferragamo, Versace, Louis Vuitton, Paul & Shark and Ermenegildo Zegna are among the handful of brands occupying the first floor.

Farther out in the suburbs are a couple of massive shopping malls, including a Wanda Plaza that is owned by the Wanda Commercial Properties Co. Ltd., a giant commercial real estate developer based in Dalian, a city in northern China. The complex has a Wal-Mart and a multistoried retail space with dozens of brands, including Guess, Calvin Klein, Zara, H&M and Mango.

The question for Xiamen’s creative crowd is whether brands, foreign or otherwise, will tap into their creativity to reach more consumers in their country. Already, companies including Adidas and Absolut Vodka are engaging artists, illustrators and musicians from across the country to create marketing campaigns and product designs.

Situ said he has either worked with or been approached by such brands as Converse and G-Shock to help promote their products among a segment of young Chinese becoming more engrossed with skateboarding and an overall street-culture aesthetic. Movie producers frequently send Situ material for films, which he will promote with small events at Thank You. Cotton has been asked to do styling for a Beijing-based culture magazine.

It seems, however, the potential could be much, much more.

“I feel more and more people know us,” said Situ. “But we have no plan, we are just going for it. Every day, just going and going.”

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