The San Francisco Of Sichuan

Chengdu is the place where businesses are tapping China’s LGBT community.

- Sharon Chen and Han Miao, with Zheping Huang and Dandan Li

It’s 11 p.m. at AMO, an underground lesbian nightclub in Chengdu, and 17 women—in androgynous clothing, their hair closely cropped—line up at the front door to welcome partygoers. Among them is Yang Yang, 25, who started working at AMO (Esperanto for “love”) more than three years ago when she moved to the Sichuan capital in the southwest of China. In that time she’s earned enough to buy a 645-square-foot loft. “I can have fun and drink while making money,” says Yang, who’d trained to be a kindergarten teacher. “How much better does it get than that?”

Yang, her workplace, and her apartment are all part of China’s growing rainbow economy: the ecosystem of consumers, companies, and workers that serve the nation’s LGBT population. State media estimate that this segment of the nation’s economy is worth $300 billion a year—making it the world’s third- largest after Europe and the U.S., they say—fueling a consumer base that companies are eagerly, if cautiously, trying to tap.

“Companies are getting braver, but they can do more and will do more as they grow more accustomed to the market,” says Darius Longarino, a senior fellow at the Yale Law School Paul Tsai China Center who studies LGBT issues. “I understand their caution, because things can change with the snap of a finger. And there’s a perception that in China nothing’s allowed unless it’s explicitly allowed.”