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The area has been under almost constant regeneration since the late 20th century as part of a city-wide project of economic regrowth. It currently houses many bars and clubs popular with both expatriates and locals as well as international brand-name stores such as American Apparel, Apple Inc. and Adidas. It is notable for housing the largest Adidas store in the world. In recent years, the Sanlitun Village shopping mall has become a popular destination for both expatriates and young Chinese.
Prior to 1949, the Beijing Legation Quarter was the center of diplomatic activity in the capital. After the foundation of the People's Republic of China, the government wanted to move the diplomatic district outside the inner city. Sanlitun was chosen as the area where foreign legations and embassies to be reallocated in the late 1950s. The area was called Sanlitun to designate its location from Dongzhimen gate (东直门). With tun means 'locality', san li means 'three li' (a li is 0.5 km), the name is translated as 1.5 km away (from Dongzhimen Gate).
Sanlitun began to grow when, along with the economic reforms of the late 1970s and early 1980s, bars serving expatriates and later locals began to open. International hotels introduced the first bars, but in the 1990s, standalone establishments appeared.
A small lane known as Nan Jie was demolished in the summer of 2005 to make way for new buildings. However, bars and restaurants continue to operate on both sides of Gongti Bei Lu.
The Village and Nali Mall shopping areas opened in the summer 2008, giving the area many new shops, restaurants, bars and a multiplex cinema.
In April 2008, prior to the 2008 Summer Olympics and as part of an ongoing operation to clean up the city, a major drug bust occurred in Sanlitun and many arrests were made.  A total of four bars and clubs were effectively closed, including a notorious bar known as Pure Girl for its cheap alcohol and availability of drugs, both its bartender and manager were executed for distribution of drugs. However it has since reopened a year later with new management. The police operation was widely criticized for its violence and absence of proper due process. A number of drug dealers as well as a barman are believed to have received the death penalty as a result of this operation.
Sanlitun has become one of the most popular places in Beijing, especially for its nightlife, and attracts many foreign tourists. More than 40% of the bars in Beijing are located at Sanlitun area.
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- Bars in Sanlitun
- My parents cannot imagine my life, but they let me choose the way I live - The Guardian, 9 August 2007
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- "Sanlitun". Basic Beijing. Retrieved 2 July 2012.
- Beijing police raid popular bar district for drugs