Dunhuang (敦煌; Dūnhuáng) is a city on the old Silk Road.It is in Gansu Province in north west China.. Understand []. The city was founded by Emperor Wudi of the Han dynasty in 111 BC at the cross roads of two trading routes on the Silk Road, and the name 'Dunhuang', meaning to 'to flourish and prosper,' gives some indication of the town's prominence in ancient China.