View with houses roofs and Erhai Lake in Tian Long Ba Bu Film and TV city. Dali is a county-level city in Dali, Yunnan province, China. Dali is located on a fertile plateau between Mount Cangshan to the west and Erhai Lake to the east. It has traditionally been settled by the Bai and Yi minorities. It is also the capital of the Dali Bai Autonomous Prefecture.