Actually, it's more like the opposite. If prices are getting high about a week before flight (i.e. the deep discount seats are gone), that means the flights are filling up, and you should consider booking with ctrip then. If plenty of cheap seats still available, then no hurry, and you can just book after you get to Shanghai.

My method is to start checking about 3-4 weeks before travel and check regularly up until a week or so before travel. I usually have a particular time of day I prefer to travel so I tend to prefer not to wait until the day or two before travel. I have found that sometimes a steep discount (70-80% off) will pop up 3-4 weeks out and if it does for the day and roughly the time I want I will snag it. Generally though the standard discount is 30-40% off, sometime 50%. Then often in the last week before travel sometimes a good discount will appear. Since you have two days to play with and seem fairly flexible on time then you should be able to hold out for a good price. But I would recommend a periodic check early on just in case a nice discount appears in which case I would go for it.

Also another point that you may or may not be aware of, Shanghai has two airports one is PVG - Pudong (handles International and some domestic) and then the old one is SHA - Hongqiao (handles most domestic). There is quite a distance between the two, some of the others here can probably give you more specifics. There are some flights from Pudong to Kunming but only a few a day (3 a day right now) most flights are from Hongqiao (right now 12 a day). This should be a factor in your planning, just be aware as this may affect your hotel choice and other plans.

Once again, excellent advice rkkwan and AndT. Thanks ! I will certainly use your booking strategies to find a good price. Yes, I was aware that there are two airports in Shanghai but didn't know that SHA had many more flights than PVG.

BTW, I finally did get a price on ctrip and the lowest I could find (Shanghai-KMG) was about $500 r/t in coach. That seems like a lot of money to me. What about you guys who seem to travel regularly inside China? I think I could do a lot better by waiting.

That's because --and I think you posted up thread that ctrip told you this much -- you can't buy tickets more than ~6 weeks in advance (it's a bit more complicated than that, and policies change frequently).

I've used ctrip. It has an English page, and foreign CC is ok. I recall they confirm the booking 24 hours later by email. Do note that most US CC will be charged a 3% surcharge. I use Cap-1, which is free of the surcharge.

Unless things of changed recently, like most Chinese travel agents, they charge a surcharge on all international CC transactions. Whether or not your card tacks on a surcharge of its own, is a different matter.