Faded red Chinese lanterns line Gin Ling Way, a spacious alley in the heart of Los Angeles's Chinatown. Off to one side stands a water fountain with Buddha statues. A few dozen coins litter the algae-covered bottom of the once grandiose monument now surrounded by yellowing bamboo, ivy, and scattered weeds.

Five blocks away is a different sight: At 701 W. Cesar Chavez Ave., builders plan to start construction on a boxy Wal-Mart Neighborhood Market, set to open in early 2013. While Wal-Mart would bring new business to the area, some locals fear it could harm small businesses and alter the ethnic environment.

Donald Liu, who lives and works in Chinatown, worries that Wal-Mart could drive out many of the tiny shops run by recently arrived ethnic Chinese immigrants from countries like Vietnam, Thailand, and Cambodia.

"If Wal-Mart opens, a lot of small stores will close," said Ocean Li, who operates a tiny herbal shop not far from where the Wal-Mart would go.

But Wal-Mart spokeswoman Rachel Wall points out that the market will only sell groceries, pharmaceuticals, and a limited selection of paper goods. Wal-Mart executives selected the Chinatown location after they determined the area lacked stores that sell fresh food.

The new site will be underneath four stories of Grand Plaza Senior Apartments. The senior apartments' manager, Amy Lewis, has mixed reactions.

"It's convenient," Lewis said. But she also recognizes that the Wal-Mart could negatively impact small shops in the area: "It's just common sense, if [Wal-Mart] opens, it affects mom and pop stores."

The Chinese Chamber of Commerce of Los Angeles has also supported the project, citing benefits such as job opportunities, more shopping options, and easier access for senior citizens living above. They have received more than 500 positive responses to the new market.

The company expects to hire 65 associates, in addition to temporary jobs created during construction.

With many ethnically Chinese moved out to areas like Monterey Park, some residents like Nicki Ung, executive director of the Chamber, believe a new market could help bring new life to an old area: "Revitalization of Chinatown should have started years ago," she said.

But Lisa See, author of bestsellers On Gold Mountain and Shanghai Girls, disagrees: "I personally don't buy the argument that [Wal-Mart] will bring new people to Chinatown or help to revive Chinatown." See's family has lived in LA's Chinatown since the 19th century.

LA City Councilman Ed Reyes was so concerned about the new Wal-Mart that he fast-tracked a bill that temporarily blocked chain stores over 20,000 square feet from Chinatown. But Wal-Mart secured the building permit one day before the vote to ban chains.

Reyes said his proposal would safeguard Chinatown's small businesses. "My intent is to protect the character of Chinatown," Reyes told the L.A. Times.

In contrast to the Gin Ling Way fountain, a new circular fountain sits near the Wal-Mart site. While it fits in with the modern surroundings, it represents something See believes could be harmful for the preservation of the historic area.

"We as a city, I think, don't pay much attention to that [Chinatown] history or that diversity, but once you cover it up it's gone for good."

The Associated Press contributed to this report.