From all the work AM2 was doing at the end of Shenmue 2, working on generating enormous, organic forests, and what they said in the livestream about taking place in smaller villages, I think it's pretty obvious this one takes place in rural, wooded china.
I am curious to see what Yu Suzuki's forest simulation algorithms look like. Shenmue I and II were awesome because they did 2 very different things - Shenmue I was an insanely intricately detailed tiny city, where everything was scripted for months upon months down to the smallest detail. Shenmue II was, of course, a full simulation of one of the largest cities on the planet. It's neat that they're doing something different yet equally ambitious with Shenmue III. There are videos recently of Yu Suzuki talking about how they generated forests at the end of shenmue II and where the tech would have eventually gone, and how he had created this system to store ridiculously huge, detailed forests into tiny pieces of code that resided a very little space in memory. Crazy stuff, especially for 2000.
I have no idea what type of odd jobs they'll have this time. But man I can't wait. This is going to be so freaking cool.