THE CHINESE GOVERNMENT MAKES TOURISM A DEVELOPMENT STRATEGY

The Chinese government is making tourism an important rural development strategy. Local governments and outside developersjointly manage and develop natural and cultural resources to increase tourism revenues. The government sells development andmanagement rights to large for-profit corporations. This article examines one such project in Fenghuang County, Hunan Province,where Yellow Dragon Cave Corporation (YDCC) and the local government of Fenghuang County are jointly promoting tourism.Pleasant climate, stunning views, colorful ethnic minority cultures, and the newly discovered and partially restored MingDynasty and Southern China Great Wall are the primary tourist attractions in Fenghuang County.

This project impacts 374,000people, made up of 29 national minorities and representing 74 percent of the local population. Some researchers argue that thispublic-private partnership successfully produces profits for developers and creates economic growth. The present research usesa power and scale perspective to identify the preliminary socioeconomic impacts of this capital-intensive development modelon local communities. Open-ended interviews with residents, government officials, and business representatives are combinedwith demographic and economic statistics to identify the decision-makers, document the distribution of social power, andidentify the flow of costs and benefits through the tourism system.

The Chinese government is making tourism an important rural development strategy. Local governmentsand outside developers jointly manage and develop natural and cultural resources to increase tourismrevenues. This paper examines the specific example of tourism development in Fenghuang County, Hunan Province,
which the Chinese government portrays as one of their mostsuccessful development models. Pleasant climate, stunningviews, “colorful” ethnic minority cultures, the newly discovered (in 2000) and partially restored Ming Dynasty SouthernChina Great Wall, along with other relics of old fortressesand historic buildings, are the primary tourist attractionsin Fenghuang County. Since 2002, Yellow Dragon CaveCorporation (YDCC) and the local government have jointlypromoted tourism, which impacts 374,000 people, 74 percentof whom are members of 29 national minorities.

The most prominent features of the local governmenttourism development policies are: separation of ownershipand the right to manage and separation of local residentsfrom tourist attractions. In late 2001, the county governmentsold the management rights to eight major tourism sites inthe county for a period of 50 years at a price of ¥0.83 billionyuan (about $102 million 1) to YDCC, headquartered in theProvincial Capital of Changsha City. The Phoenix AncientTown Tourism Co. Ltd (PATT) was then established in Fenghuang County as a branch of the YDCC to execute thoserights. To reduce population pressure and accommodate arapidly increasing number of tourists, the local governmentis attracting outside investment to expand Tuo River Townto nearby areas to resettle local residents.
Policies and programs designed to mitigate negative impacts of tourism and enhance positive effects will undoubtedlyinvolve trade-offs based on understanding the dynamics of tourist impacts and how these vary under different conditions.

Previous researchers haveevaluated the present model of tourism development in ruralChina, focusing on economic indices, while overlooking theactual distribution of economic benefits and socio ecologicalcosts resulting from growth.Even though some researchers observed negative impactsand advocated sustainable development, planning for touristimpacts with this goal in mind has been rudimentary.

China’s Contemporary Economic Context
Before the late 1970s, the capitalist market was lookedupon as evil in socialist China. A state-owned, special interest-avoiding, planned economy was the single economicform. In 1978, Deng Xiaoping, the second Chairman ofthe Communist Party of P. R. China, announced his theory,“Build Socialism with Chinese Characteristics,” which meansChina should develop socialism according to its own nationaldemography and economics instead of adopting the formerSoviet Union model or the model developed by Marx withoutany adjustment. This idea was based on the assumption thatin the preliminary stage of building socialism, the biggest“contradiction” is that the “backward” forces of productionfettered the “advanced” social relations of production.

Themission for China was to stimulate the forces of productionby unleashing the free market in appropriate economic sectorsto a limited degree. Policymakers called for the coexistenceof the free market and the planned economy. They believedthat developing a mixed economy and encouraging foreigninvestment was necessary for such a large developing country as China, and that the benefits would far outweigh the risks.
The role of the state within this mixed economy has becomeless that of the vital economic actor than as a guarantor ofthe social and legal conditions (stability, legitimacy, and accountability) for the free play of market forces. This markedthe beginning of China’s Reform and Open-up policy.
Since that time, Chinese leaders have sought to shape awork force and citizenry that fits with this reform policy, forexample, low-skilled and technical workers and newly affluent consumers who are attractive to global capital.They havecontinued to integrate China into the global market system,joining the World Trade Organization (WTO) in 2001. Sincethe beginning of the Reform and Open-up policy, GDP hasgrown about 9.5 percent per year on average, making Chinathe world’s fastest-growing economy. However, as a consequence, the disparity in economic development between ruraland urban areas and between western and eastern areas hasemerged as an urgent problem. The gap between the averageincomes of urban and rural residents has risen to about 3.3to 1, which is higher than in the United States and is one ofthe highest in the world.

In distinct contrast to the emphasis of regional development policy since 1978 that had favored its coastal and easternparts, China launched in 1999 the campaign to “Open Up theWest” as a major state project of nation building directed atthe interior and western provincial-level jurisdictions. Thiscampaign is to encourage endogenous economic growth, toreduce socioeconomic inequalities, and to ensure social andpolitical stability in non-Han areas of China.
The campaign forms part of a dynamic that is extendingcapitalist development from China’s seaboard to the interior.
The novelcontribution of the campaign to Open Up the West has been ahighly publicised state commitment to correcting the growingimbalances between eastern and western China. During thecampaign, the central government provides special financialsupport directly to the western regions, or encourages privatecapital to invest in them to stimulate local economic growth.

The western regions are characterized by economic underdevelopment, large number of minority nationalities, and a lackof economic infrastructure, as well as being in the far interiorof the land mass. The West included on the development listof this campaign consists of 11 provinces and autonomousregions and a municipality, which together occupies a totalarea of 6.85 million km2and has a population of 364 million.
The average per capita GDP in these regions was only about40 percent of per capita GDP in the more developed easterncoastal regions.
Fenghuang County and its PopulationFenghuang County lies in the southwest of the XiangxiHmong and Tujia Ethnic Group 4Autonomous Prefecture inHunan Province. It covers an area of 1759 km2,and has a population of 374,000, of which 89 percent areagriculture population. Twenty-nine ethnic minority groups constitute 74 percent of the local population, among which theHmong is the largest, accounting for 54 percent of the totalcounty population.

Nine zhen (towns) and 22 xiang (townships) exist inFenghuang County. Both townships and towns belong to thetownship administrative level, and the distinction is based on the criteria that towns are more urbanized than townships and have a higher percentage of residents employed innonagricultural pursuits. Tuo River Town,the location of the county government, is the capital of thecounty, and also the tourist center. The population of thistown is 11 percent of the total population of Fenghuang. Thepopulation density in Tuo River Town is 638/ km2, which ismuch higher than the county’s average population density(212/ km2), and the national population density (125/ km2).
The high density of the local population, plus the large numberof tourists, puts significant pressure on the local ecosystem.Fenghuang is located in a mountainous area on the YunGui Plateau, including 47 high mountains and 156 rivers.The forest coverage was around 40 percent. The southeastpart of the county is below 500 m above sea level; the partbetween the northeast and southwest is between 500m-800m;and the northwest part is higher than 800m. The county hasa semi tropical monsoon humid climate, with an averagetemperature is about 61oF. Average rainfall is 1347 mm/year.

On one hand, Fenghuang County has rich natural andcultural resources; on the other hand, it is one of the Nation’sPoor Counties. In 2000, the per capita GDP of the eastern cityChangsha (the capital of Hunan) was ¥11,262 yuan ($1,390),not only more than double of the provincial overall per capitaGDP (¥5,626 yuan) ($695), but also even much higher thanthe national overall per capita GDP (¥7,066 yuan)($872);this disparity is unusual, especially considering that Hunan
is one of the poor provinces in China. Fenghuang’s per capitaGDP was ¥2,079 yuan ($257), just 18 percent of Changsha.

In the early 1980s, according to economic indices, Fenghuang County ranked last among 108 counties in HunanProvince. From 1985 to 1995, influenced by the Reformand Open-up policy, Fenghuang’s annual economic growthrate was about 17 percent. In 1997, due to the bankruptcy ofFenghuang Tobacco Company, which was the backbone ofthe local economy, Fenghuang’s economy slumped again, andits economic growth rate was only 0.68 percent from 1995 to2003. With the help of supportive policies and special financial support during the campaign to Open Up the West, theFenghuang economy began to recover. The local governmentchose tourism as the best way to take advantage of the rich,local natural and cultural resources to increase local revenueand develop the local economy. However, growth in GDP inthe county still has been slow. In 2003, the second year sincethe adoption of the new tourism development model, the percapita GDP of Fenghuang County was ¥2,644 yuan ($326),only 29 percent of the national average, 37 percent of theprovincial average.
Impressions of Fenghuang’s TourismMy first visit to Fenghuang County was in early 2002,just before any signs of its large scale and capital-intensive tourism boom started showing. Tuo River Town, the capitalof Fenghuang County, was quiet and peaceful, an ideal getaway place where urban people could experience a slow and
laid-back traditional lifestyle with scenic mountain and riverviews. But when I went back to Tuo River Town in the summer of 2005 to start carrying out my dissertation research,my impressions were much different.

Physical EnvironmentSince 2002, the first year that the PATT began developing tourism resources, the number of tourists has increasedremarkably. From 2002 to 2006, the number of touristshad increased by 296 percent from 890,000 to 3,520,000.Fenghuang’s infrastructure and facilities could hardly keepup with its sudden tourism “Great Leap Forward.” Tourismaffected the local physical environment in negative ways.

The Tuo River offers attractive views for tourists. Theold stilt houses along both sides of the river, together with thefour scenic routes along it, are the tourist center of FenghuangCounty. These old stilt houses have been rehabilitated andconverted into lodges, which is one of the accommodationsmost desired by tourists. More and more restaurants areappearing along the river. The Tuo River is the soul of TuoRiver Town, and its high quality water is essential for activities such as swimming and boating. Local residents used towash their clothes beside the river. The many restaurants andlodges along the river now discharged large amounts of wasteand sewage, resulting from increased numbers of tourists,which flowed directly into the river and hastened the processof eutrophication.

The introduction of pollutants into the river is not onlyenvironmentally damaging but also economically disastrousfor water-based tourist resorts. In the Tuo River, excessiveweed growth makes the river difficult to navigate. The PATTis concerned because of the effect on tour boats. PATT considered cutting the weeds, but the cost was too high. Evenif the weeds were cut, they would grow again quickly. Theonly solution is for the local government to build a sewagenetwork. A local government official told me that this projectwas in progress with no more detail provided. There is a damand power station in the upper river. When the dam cuts thewater flow to generate electricity, the lower river becomeseven shallower. As a result, conflicts have arisen between thePATT and the power station.
In Fenghuang County, infrastructure is unable to copewith the intensity of tourist impacts, especially at peak periods. The results are not only pollution, but also supply failures.

The tourism boom put a huge load on local electricity capacity. Family-owned motels have installed air-conditioners andnatural gas water heaters for urban tourists, which increasethe use of the fossil fuels. During my stay in a family motel inFenghuang County, I observed frequent power outages. Onenight when I was on one of the busiest streets in Tuo RiverTown, suddenly everything went dark because of a poweroutage. The number of tourists has also been exceeding the capacity of local accommodation during peak periods, whenmany tourists have to stay in lodging outside FenghuangCounty. The head of the county tourism bureau told me, “Lastyear’s gold-weeks, there were so many tourists that I evenhad to let some stay at my house.”
Because of the overload on the infrastructure, the local government is planning to expand Tuo River Town intonearby areas, which is expected to be finished before 2020.
This is Fenghuang County’s primary urbanisation project.A new bus station and a new bridgeare already under construction now as part of this project. The local governmentwill expropriate large cropland areas from the peasants. Theplan calls for the residents of Tuo River Town to be relocatedin the expanded areas, but they still may work or run theirbusinesses in town. This commute will, therefore, increaseenergy and transportation costs. The spatialseparation of tourist areas from the rest of the society willcreate social segregation, which means the mass of touristswill be surrounded by, but not integrated with, the host society. This project will undoubtedly generate major impactson the lives of local people. The ambitious local governmentis hiring experts from Beijing to make a blueprint for Fenghuang County’s eighteen-year (2002-2020) urbanization plan(CACP and PGFC 2005). In this elite-imposed process, localpeople are left with little choice but to embrace it.

The local government made efforts to solve environmental problems caused by tourism, but these efforts werelimited. For example, the local Environmental ProtectionBureau (EPB) began regulating traffic within the downtownTuo River Town to control air pollution. Two taxi companiesbought the exclusive right to operate transportation in town.
In 2003, the EPB banned 1,100 motorcycles. One hundredtaxis took the place of the motorcycles as the primary meansof transportation for tourists in town. In addition, 10 battery powered buses were running in downtown area. The EPBalso adopted policies to regulate the entry of private carsin downtown. These restrictions reduced traffic congestion,noise pollution, and the high cost of maintaining the historicstone road in town. By the summer of 2005, these were theonly positive measures carried out by the local government tomitigate the environmental problems. I interviewed the headof the EPB about what the bureau was doing about the negative environmental impacts of tourism development. I foundout that the EPB stopped monitoring the quality of water andair several years before, although this was supposed to be oneof its basic duties. The head said:We just don’t have enough funds to do more. We haveproposed that the PATT should return one yuan fromevery tourist’s ticket payment for an environmentalprotection fund, but, you know, the PATT of course isn’twilling to do so.

It is not clear whether the local government or the PATTshould be responsible for carrying out specific conservationmeasures. Because the PATT pays a government tax and afee for its monopoly, it ascribes this responsibility to the local government. Regardless of which party should be responsible,both regard the cost of conservation as too high.
Social Environment
Apart from visible effects on the local physical environment, the present model of tourism development has beencontributing to certain social changes in Fenghuang County,including changes in value systems, traditional lifestyles,women’s roles, community cohesion, and social tension.Original spontaneous hospitality is transforming itselfinto commercialism. I was in Fenghuang County in early2002, just before the PATT began to promote tourism development. At that time, local people were very hospitable.
Those I interviewed on the street often invited me to havelunch or dinner with their families. Much has changed sincethen. In the summer of 2005, a Hmong woman told me thatif I wanted to take pictures of her, I must either buy some ofher knitted goods or pay her for the pictures. There were nopublic restrooms available on the streets for tourists. Many local households hang signs in front of their houses: “Bathroom,one yuan/ person,” charging tourists for using their bathrooms.
Local people stop tourists or even follow them to try to selltheir crafts or to solicit tourists to favor their family businesses,such as restaurants, family motels, or boat tours.
Tourism to some degree has enhanced family and community bonds in Fenghuang County. At first, some peoplewho had left town years before to seek employment in thecities have come back. They expect to find more opportunityback in their hometown due to the new tourism industry.
They invest in small businesses with the money they savedfor years working in cities, or assist their families in runningtheir family motels or restaurants. For example, a woman toldme that she migrated to Beijing several years ago and founda job there. Hearing about the tourism industry in FenghuangCounty, she went back to help her brother and sister in-lawrun their family motel, which had been established two yearspreviously and had 38 beds then.
Secondly, community bonds also are enhanced becauselocal residents have united together against the PATT andagainst the local government. The PATT has bought the eightsites in Fenghuang County, and local residents no longer havefree access to these tourism resources.

Therefore, intenseconflict has arisen between local people and the PATT overthe issue of tourism resource use. For example, sightseeingby boat is one of the most attractive entertainments for the
tourists. The PATT has its own boat team and hired 50 localboatmen, but the tickets for it are expensive. The local boatmen, who are not hired by the PATT, also are interested inthis business. They began to attract tourists to choose theirboats by offering much cheaper prices, which negativelyinfluenced the PATT’s tours. The PATT took it for grantedthat they should monopolize this business since they havepaid the local government to manage the major local touristresources for 50 years. Because they were unable to preventcompetition from local boatmen, the PATT turned to the local government for help. With the effort of the local government,after negotiation, the PATT finally agreed to allow the localboatmen to enter the central sightseeing part of the Tuo Riverfor three days a month. However, the rest of the month, theycould just enter the upper and lower part of the river, wherethe views are inferior. This means that the local boatmen can’t
really benefit much from the tourists. Their resentment is increasing towards both the PATT and the local government.With the flood of tourists, the PATT is making more andmore money out of their monopolisation of the eight sites inFenghuang County. Local Hmong villagers also have organized themselves to develop their villages into new resorts,attracting tourists with scenic natural views and Hmong traditional cultures.

These villages send representatives to TuoRiver Town where tourists assemble to pass out flyers and stopor follow tourists on the street, soliciting them to visit theirvillages. Other villagers stay at the entrance of the villages andsell tickets. The prices of these tickets are usually expensive,around ¥100 yuan ($12), but are not fixed. Village leaders aredeveloping cooperative relationships with bus drivers andtourist guides, promising them a considerable kickback foreach tourist they bring. The kickback is usually more than 50percent of the ticket price. To entertain tourists, village girlsdress up in Hmong costumes and perform traditional Hmongdances such as the Hmong drum dance (see Feng 2007a fora detailed discussion of Gouliang Hmong Village tourismdevelopment as one such case). Because they lack capital,experience, and professional training in tourism management,the effort of villagers failed to meet the expectations of tourists, and conflicts arose between the villagers and the tourists.

The Tourism Bureau of Fenghuang County has received anincreasing number of tourist complaints. Several touristswarned me, “Don’t go to those places, they are not good. Allthe people there want is your money.”
On one hand, family and community cohesion is enhanced. However, on the other hand, the conflicts among thePATT, the local residents, the local government, and the tourists are becoming fierce. This was especially demonstrated inthe case of Yellow Silk Village in Ala Town, 12 miles awayfrom Tuo River Town. The historic rampartaround Yellow Silk Village is one of the eight sites leased tothe YDCC represented locally by the PATT. It was first builtin 687 a.d. during the Tang Dynasty. The stone architectureadded in 1700 a.d. during the Qing Dynasty has been wellrestored. The rampart around the village is the only one of itskind in Hunan Province. The PATT is interested in investing torebuild the whole village to what it was like hundreds of yearsago to make the village as the PATT’s new tourist attractionrather than just the village’s rampart. So the local governmentrequired the villagers to move out and allocated a piece of landto resettle them. As compensation, each household was givena piece of this land to build a new house, along with ¥350/m2in compensation. The original village consists of more than 90households, and about two-thirds have moved out. The remaining 30 households refused to move because they thought thecompensation was too low. These villagers believed that the PATT bought the management rights only to the rampart aroundthe village. The 30 households then organized their own business selling tickets to tourists at the opposite side of the villageentrance, where the PATT was selling tickets. A villager whoserved as my guide said indignantly, “They are just a bunch ofoutsiders, how can they beat us? We need to unite together tostrive for our own benefit!” The presence of two ticket boothsand two different kinds of tickets confused the tourists. Thevillagers raised funds to rebuild their temple and pavilion insidethe village. They also appointed their own guides, showing
their customers around, except for the rampart.

The PATT was angry with the villagers, but was unable tocontrol the situation. The PATT turned to the local governmentfor help. Even though the local government was eager to makethe villagers move out too, there was not much they could dobesides persuading the villagers. However, this didn’t meet thevillagers’ expectations of either raising the compensation fee, orletting them share the PATT’s profits from their village’s rampart. As I was interviewing the CEO of the PATT, he answereda call on his cell phone, telling the caller, “We don’t want todeal with the residents in Yellow Silk Village any more. If thegovernment can’t take good care of it as soon as possible, wewill cancel investments to rebuild this village.” Hanging upthe phone, he told me the caller was the head of FenghuangCounty. Until the day I left Fenghuang, the local governmentwas still trying to persuade the villagers to move out, but thevillagers, who believed that the government appropriated partof the resettlement fund provided by the PATT, wouldn’t do sountil their request for more benefits was met.

Besides, the role of local women is also changing, assome of them now take an active role in tourism. Formerly,women worked in the domestic arena—cooking, cleaning,raising children, and helping husbands work the land. Now,women provide services guiding tourists, staging traditionaldances, renting out costumes, selling souvenirs, and soliciting tourists to favor their family motels or restaurants. Duringpeak periods, women can make more cash faster from tourism than in agriculture, which improves women’s status inthe family for a detailed discussion. Crimerates have also increased. The presence of a large number oftourists with conspicuous money and valuables, such as cameras and jewelry, increases robbery. Many bars have sprungup during the past three years. Some tourists enjoy stayinglate and getting drunk, which threatens local safety. My hostfamily always reminded me, “Don’t come back too late. Becareful and be safe.” They told me that they missed the olddays when no one locked their doors at night.

Mapping Economic Benefit Distribution andSocial Power
Typical Fenghuang tourists frequently spend weekendsand short holidays relatively close to their places of residence.Their desire is to escape the pressures of everyday urbanliving, to experience a change of environment, and to seek leisure outlets beyond the limits of the city. The colorfulHmong culture, the stunning natural views, and the traditionallaid-back lifestyle in Fenghuang County satisfy their desirefor the enjoyment of rural scenery, open space, and exoticethnic attractions.
According to the survey conducted by the PATT in2004, Fenghuang tourists mainly belong to middle and lowerincome class. In the summer, college students constituted alarge segment of the tourists. Most tourists were from thenearby cities in Hunan Provinces (about 54.96%), in southwest China, and in Guangdong Province. A few were frommore distant cities such as Beijing and Shanghai. In 2004,the average expenditure per tourist per visit (averaging 2days) in Fenghuang County was ¥153 yuan ($19). In 2005, it increased to ¥230 yuan ($28). The relatively low expenditurewas reasonable, given the income and origin of Fenghuang
tourists. According to the local officials, the local tourismindustry lacked the ability of attracting tourists to stay longerand to spend more in local businesses rather than towardsthe PATT. This partially resulted from the overcrowding ofthe accommodations, services, infrastructure, and facilitiesin Fenghuang County.
Estimates of tourist expenditures show that the PATTand other outside investors, along with a few local people,are the main beneficiaries. The result was increased
resentment among local people for two reasons. First, employment opportunities for local people provided directlyby PATT were limited and poorly remunerated.

Second, local people who directly benefited from the tourismindustry were a small minority of the residents of a few towns(largely in Tuo River Town), and an even smaller minorityof the whole county.
In Fenghuang County, those who had more politicalpower also gained more economic power. Some local peoplewho were most actively involved in tourism were relativesof the local government officials, or even the officials themselves. Another group benefiting from tourism includes thosewho had migrated to cities to seek opportunities severalyears earlier. They then moved back and invested the capitalaccumulated during those years in the tourism industry: hotels, family motels, restaurants, photo shops, and real estateconstruction. The other local beneficiaries were those whoown old stilt houses by the Tuo River. These houses were
not only old, but also outdated and dangerous. But nowtheir unique local architectural style, integrating perfectlyinto the natural environment, has become tourist gold. Thelocal government allocated funds to restore these old houses.
Lacking the necessary experience and capital, only a fewindigenous owners run their own businesses. Instead, mostof them rented the houses to investors. The rental income wasrelatively low compared to the income they might earn fromrunning a family motel themselves, but it was risk-free anda considerable amount of extra income for the owners whoin the past were quite poor.
The local tourism boom generated employment opportunities for ordinary people, but these opportunities were neithersignificant nor profitable. For example, land values wereincreasing in Tuo River Town with the tourism boom, whichattracted more and more builders and real estate agencies.Surplus agricultural laborers temporarily gained employmentin construction, but when construction was finished, many ofthem again joined the ranks of the unemployed.

As the biggest outside investor, the PATT receives themajority of the economic benefits. According to the contractsigned in November 2001, the PATT can monopolize themanagement of eight sitesin Fenghuang County for 50years at the price of ¥0.83 billion yuan ($102 million),which is paid in installments every year starting in 2002.
During the first three years of its monopoly, the PATT’sgross income from tickets increased rapidly by 137 percentfrom ¥13.6 million yuan ($1.7 million) to ¥32.2 millionyuan ($4.0 million) between 2002 and 2004. At the sameperiod of time, the PATT’s deficit dropped dramatically fromabout ¥45.4 million yuan ($5.6 million) to ¥7.3 million yuan($0.9 million). The primary investment by the PATT is inthe rehabilitation of historic buildings. During the first fewyears, this investment necessarily was large, but after a fewmore years, capital expenditure would be small, and muchless would be required for daily maintenance. The PATTwas very optimistic that large profits would be realized ina few years.
The county government receives ¥0.83 billion yuan($102 million) for granting management rights to eight sitesfor 50 years. During this period, it also collects annual taxfrom the PATT. Because tourism development in FenghuangCounty is still at an early stage, the magnitude of total costsis uncertain. The question is whether the increased revenuewill be able to at least cover the increased expenditures causedby the tourism, for example, the expenditures on reinvestingin infrastructure and facilities, mitigating environmentaldegradation, and resettling local residents.

Leaders of both the county government and the PATTclaim that tourism provides both the incentive for conservation and the economic means by which the rehabilitationand maintenance of scenic areas and historic sites can becarried out, and that it would economically benefit the localpeople evenly. According to my research in the summer of2005, however, I found these claims to be dubious, as it wasconfirmed both by my impressions of Fenghuang in 2005 incontrast of those in early 2002, by the following data on thecounty government’s annual deficit, and the per capita annualincome of the local population.
The county’s government’s annual deficit had beenclimbing especially since 2002, from ¥161.86 million yuan($19.98 million) in 2002 to ¥238.93 million yuan ($29.50million) in 2005 (CACP and PGFC 2005:13; FenghuangStatistical Yearbook 2004, 2005). This demonstrates that atthis stage, the investment needed in the county’s infrastructureand facilities with the rapid tourism boom was far beyond theeconomic benefit the county government was getting fromthe deal with the YDCC.
According to the per capita annual incomes of the localagricultural population and non-agricultural population from2001 to 2006, the disparity gap between them had been widening, even though both their incomes increased: the per capitaannual income of the local non-agricultural population (theminority of the total local population) increased from ¥3,316yuan ($409) to ¥6,895 yuan ($851) with an annual average rate of 16.2 percent; and that of the local agricultural population (the majority of the total local population) only increasedfrom ¥1,254 yuan ($155) to ¥1,984 yuan ($245) with an annual average rate of 9.6 percent. Nonmonetary subsistenceactivities alone cannot possibly fill the gap between them.
From 1995 to 2001, the percentage rate of agriculturalto non-agricultural per capita annual income was generallyincreasing, closing the income disparity between the twopopulations, and in 2001, it reached the peak of 38 percent.However, from 2001 to 2006, the trend reversed with a decrease from 38 percent to 29 percent, widening the incomedisparity. The first year of Fenghuang tourism Great LeapForward, it dropped the most by 8 percent.
According to the analysis article by the Statistical Bureau of Fenghuang County, what the local residents,especially in Tuo River Town, have concerned the most forthe past several years since its tourism boom are: increasing commodity prices (especially food, fossil fuel, and realestate); increasing education fees; tourism developmentissues (especially the environment); and increasing incomeinequality.

Marketing Public Resources forTourism in Hunan
In January 1998, Datong Industrial Corporation of China(DICC) in Beijing took over the Yellow Dragon Cave tourismconservation in the Wu Ling Yuan Area of Hunan Province,which the United Nations Educational, Scientific, and CulturalOrganization (UNESCO) has designated a World NaturalHeritage site.
The YDCC was established by the DICC,with capital investment from 19 corporations. Since then, theYDCC has increasingly monopolized tourism resources inHunan Province, including Yellow Dragon Cave in Wu LingYuan Area for 45 years since 1998, eight sites in FenghuangCounty for 50 years since 2002, Mountain Jia National Parkand Mountain Huping in Shimeng County for 50 years since2002, and Mountain Lang in Shaoyang areafor 48 years since 2003.
The infusion of large-scale, capital and energy intensivetourism as a strategy for reducing rural poverty in HunanProvince is a new phenomenon. Some scholars in Chinaquestion if public resources should be sold as a commodity. They argue thatpublic resources such as natural views and cultural heritage should be considered commonwealth and non-profitresources, shared by the whole nation. They believe that thegovernment, instead of any profit-oriented company, shouldmanage public resources. During China’s transition periodfrom planned economy to market economy, however, “commodity fetishism”10 is growing among local policymakers.
With rich natural and cultural resources but low economicgrowth rates, local policymakers in rural China are eagerto take advantage of these resources to stimulate economic growth. Economic development often takes priority at thelocal level and is still the main criterion for judging theperformance of government officials in reality. Chinesescholars and politicians were paying close attention to thetourism development in Fenghuang County. If it were successful, they might advocate revising relevant regulationson managing public resources to accommodate such tourismdevelopment.