Historic Hoi An is UNESCO gem

The Japanese once thought Hoi An so important they believed the heart of the Asian dragon lay beneath the Vietnamese port. But Hoi An was already famed long before the Japanese arrived.

In the first century the central coast city had the biggest harbour in South-East Asia when the Cham, a Sanskrit-speaking Hindu people, controlled the Spice Route from the Thu Bon River estuary, which links the port with the South China Sea.

By the 1500s, the Cham had been pushed out by the Mongols and the Viet but Hoi An continued to grow as the locals, Chinese, Japanese, Portuguese and Indians, exported spices such as cinnamon and anise as well as silk, incense, elephant tusks, paper and Chinese medicines to Europe.

The town was split by a canal and on one side the Japanese founded their trade village, building a covered bridge in the 1590s so they could trade with the Chinese on the other side. It still spans the canal today, a simple structure lacking the ornate designs of the Vietnamese and Chinese merchants' houses that have earned the city its UNESCO heritage listing.

When the Japanese emperor recalled his citizens from foreign colonies, the village was taken over by the Chinese and 3000 of their descendants still live in Hoi An.

Through the generations they've built grand Taoist assembly halls where the community would discuss business and give thanks to the sea goddess and a legion of other deities. Young Chinese couples still come to pray before the statues of the three mothers and 12 midwives, or to write their names on cardboard and attach it to long red spirals of incense that hang from the ceiling and burn for a month.

Hoi An is no longer the great trading power it was; much of the shipping trade has moved further north to Da Nang, but it has lost little of its mercantile spirit.

Across the Japanese Bridge, the old village is now a glut of shops selling suitcases, whistles, umbrellas, hats and T-shirts. Women hawk guavas, pawpaws and bananas from pairs of baskets linked by a wooden plank balanced on their shoulders. Others dispense freshly cooked sugary doughnuts from mobile stalls.

Hoi An is the tailoring capital of Vietnam and whole streets are fronted by battalions of headless mannequins in suits and dresses. These are made to measure tailors who promise the garment overnight and it is said they can copy anything.

Silver and silk are also traded in a city where it seems everyone has something, however unlikely, to sell.

I was taking photos of the blue and red junks on the palm-lined bank of the Thu Bon River when a shape emerged from the shadows on the other side.

An old man came into view paddling his wooden boat one-armed across the river. As he got closer, he whooped and laughed maniacally. He held a silver coin between his two fingers and then pointed at my camera. From a niche in his boat he took a blue cigarette box and from it, a lit cigar.

Jabbed between his gums, it was so short he was virtually biting the ash. His head fell back as he laughed again before flashing four gold teeth.

The old man's no oil painting but he's trading on his looks.

·Niall McIlroy visited Hoi An as a guest of World Expeditions.

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Hoi An is included on most of World Expeditions Vietnam itineraries, including the 11-day Classic Vietnam package. The tour includes accommodation, most meals and an overnight junk cruise on Halong Bay. The package costs from $1590 with a single supplement of $380. The 15-day Vietnam By Bike package also visits Hoi An. The tour includes all accommodation and many meals and is priced from $2390 per person, twin-share with a single supplement of $430.

For dates on both tours, see worldexpeditions.com.