THE CHINESE GOVERNMENT MAKES TOURISM A DEVELOPMENT STRATEGY

The Chinese government is making tourism an important rural development strategy. Local governments and outside developers jointly manage and develop natural and cultural resources to increase tourism revenues. The government sells development and management 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 Ming Dynasty and Southern China Great Wall are the primary tourist attractions in Fenghuang County.

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

The Chinese government is making tourism an important rural development strategy. Local governments and outside developers jointly manage and develop natural and cultural resources to increase tourism revenues. This paper examines the specific example of tourism development in Fenghuang County, Hunan Province,
which the Chinese government portrays as one of their most successful development models. Pleasant climate, stunning views, “colorful” ethnic minority cultures, the newly discovered (in 2000) and partially restored Ming Dynasty Southern China Great Wall, along with other relics of old fortresses and historic buildings, are the primary tourist attractions in Fenghuang County. Since 2002, Yellow Dragon Cave Corporation (YDCC) and the local government have jointly promoted tourism, which impacts 374,000 people, 74 percent of whom are members of 29 national minorities.

The most prominent features of the local government tourism development policies are: separation of ownership and the right to manage and separation of local residents from tourist attractions. In late 2001, the county government sold the management rights to eight major tourism sites in the county for a period of 50 years at a price of ¥0.83 billion yuan (about $102 million 1 ) to YDCC, headquartered in the Provincial Capital of Changsha City. The Phoenix Ancient Town Tourism Co. Ltd (PATT) was then established in Fenghuang County as a branch of the YDCC to execute those rights. To reduce population pressure and accommodate a rapidly increasing number of tourists, the local government is attracting outside investment to expand Tuo River Town to nearby areas to resettle local residents.
Policies and programs designed to mitigate negative impacts of tourism and enhance positive effects will undoubtedly involve trade-offs based on understanding the dynamics of tourist impacts and how these vary under different conditions.

Previous researchers have evaluated the present model of tourism development in rural China, focusing on economic indices, while overlooking the actual distribution of economic benefits and socio ecological costs resulting from growth. Even though some researchers observed negative impacts and advocated sustainable development, planning for tourist impacts with this goal in mind has been rudimentary.

China’s Contemporary Economic Context
Before the late 1970s, the capitalist market was looked upon as evil in socialist China. A state-owned, special interest-avoiding, planned economy was the single economic form. In 1978, Deng Xiaoping, the second Chairman of the Communist Party of P. R. China, announced his theory, “Build Socialism with Chinese Characteristics,” which means China should develop socialism according to its own national demography and economics instead of adopting the former Soviet Union model or the model developed by Marx without any adjustment. This idea was based on the assumption that in the preliminary stage of building socialism, the biggest “contradiction” is that the “backward” forces of production fettered the “advanced” social relations of production.

The mission for China was to stimulate the forces of production by unleashing the free market in appropriate economic sectors to a limited degree. Policymakers called for the coexistence of the free market and the planned economy. They believed that developing a mixed economy and encouraging foreign investment 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 become less that of the vital economic actor than as a guarantor of the social and legal conditions (stability, legitimacy, and accountability) for the free play of market forces. This marked the beginning of China’s Reform and Open-up policy.
Since that time, Chinese leaders have sought to shape a work force and citizenry that fits with this reform policy, for example, low-skilled and technical workers and newly affluent consumers who are attractive to global capital. They have continued to integrate China into the global market system, joining the World Trade Organization (WTO) in 2001. Since the beginning of the Reform and Open-up policy, GDP has grown about 9.5 percent per year on average, making China the world’s fastest-growing economy. However, as a consequence, the disparity in economic development between rural and urban areas and between western and eastern areas has emerged as an urgent problem. The gap between the average incomes of urban and rural residents has risen to about 3.3 to 1, which is higher than in the United States and is one of the highest in the world.

In distinct contrast to the emphasis of regional development policy since 1978 that had favored its coastal and eastern parts, China launched in 1999 the campaign to “Open Up the West” as a major state project of nation building directed at the interior and western provincial-level jurisdictions. This campaign is to encourage endogenous economic growth, to reduce socioeconomic inequalities, and to ensure social and political stability in non-Han areas of China.
The campaign forms part of a dynamic that is extending capitalist development from China’s seaboard to the interior.
The novel contribution of the campaign to Open Up the West has been a highly publicised state commitment to correcting the growing imbalances between eastern and western China. During the campaign, the central government provides special financial support directly to the western regions, or encourages private capital to invest in them to stimulate local economic growth.

The western regions are characterized by economic underdevelopment, large number of minority nationalities, and a lack of economic infrastructure, as well as being in the far interior of the land mass. The West included on the development list of this campaign consists of 11 provinces and autonomous regions and a municipality, which together occupies a total area of 6.85 million km2 and has a population of 364 million.
The average per capita GDP in these regions was only about 40 percent of per capita GDP in the more developed eastern coastal regions.
Fenghuang County and its Population Fenghuang County lies in the southwest of the Xiangxi Hmong and Tujia Ethnic Group 4 Autonomous Prefecture in Hunan Province. It covers an area of 1759 km2 ,and has a population of 374,000, of which 89 percent are agriculture population. Twenty-nine ethnic minority groups constitute 74 percent of the local population, among which the Hmong is the largest, accounting for 54 percent of the total county population.

Nine zhen (towns) and 22 xiang (townships) exist in Fenghuang County. Both townships and towns belong to the township 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 in nonagricultural pursuits. Tuo River Town, the location of the county government, is the capital of the county, and also the tourist center. The population of this town is 11 percent of the total population of Fenghuang. The population density in Tuo River Town is 638/ km2, which is much 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 number of tourists, puts significant pressure on the local ecosystem. Fenghuang is located in a mountainous area on the Yun Gui Plateau, including 47 high mountains and 156 rivers. The forest coverage was around 40 percent. The southeast part of the county is below 500 m above sea level; the part between the northeast and southwest is between 500m-800m; and the northwest part is higher than 800m. The county has a semi tropical monsoon humid climate, with an average temperature is about 61o F. Average rainfall is 1347 mm/year.

On one hand, Fenghuang County has rich natural and cultural resources; on the other hand, it is one of the Nation’s Poor Counties. In 2000, the per capita GDP of the eastern city Changsha (the capital of Hunan) was ¥11,262 yuan ($1,390), not only more than double of the provincial overall per capita GDP (¥5,626 yuan) ($695), but also even much higher than the 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 capita GDP 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 Hunan Province. From 1985 to 1995, influenced by the Reform and Open-up policy, Fenghuang’s annual economic growth rate was about 17 percent. In 1997, due to the bankruptcy of Fenghuang Tobacco Company, which was the backbone of the local economy, Fenghuang’s economy slumped again, and its economic growth rate was only 0.68 percent from 1995 to 2003. With the help of supportive policies and special financial support during the campaign to Open Up the West, the Fenghuang economy began to recover. The local government chose tourism as the best way to take advantage of the rich, local natural and cultural resources to increase local revenue and develop the local economy. However, growth in GDP in the county still has been slow. In 2003, the second year since the adoption of the new tourism development model, the per capita GDP of Fenghuang County was ¥2,644 yuan ($326), only 29 percent of the national average, 37 percent of the provincial average.
Impressions of Fenghuang’s Tourism My 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 capital of 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 river views. 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 Environment Since 2002, the first year that the PATT began developing tourism resources, the number of tourists has increased remarkably. From 2002 to 2006, the number of tourists had increased by 296 percent from 890,000 to 3,520,000. Fenghuang’s infrastructure and facilities could hardly keep up with its sudden tourism “Great Leap Forward.” Tourism affected the local physical environment in negative ways.

The Tuo River offers attractive views for tourists. The old stilt houses along both sides of the river, together with the four scenic routes along it, are the tourist center of Fenghuang County. These old stilt houses have been rehabilitated and converted into lodges, which is one of the accommodations most desired by tourists. More and more restaurants are appearing along the river. The Tuo River is the soul of Tuo River Town, and its high quality water is essential for activities such as swimming and boating. Local residents used to wash their clothes beside the river. The many restaurants and lodges along the river now discharged large amounts of waste and sewage, resulting from increased numbers of tourists, which flowed directly into the river and hastened the process of eutrophication.

The introduction of pollutants into the river is not only environmentally damaging but also economically disastrous for water-based tourist resorts. In the Tuo River, excessive weed growth makes the river difficult to navigate. The PATT is concerned because of the effect on tour boats. PATT considered cutting the weeds, but the cost was too high. Even if the weeds were cut, they would grow again quickly. The only solution is for the local government to build a sewage network. A local government official told me that this project was in progress with no more detail provided. There is a dam and power station in the upper river. When the dam cuts the water flow to generate electricity, the lower river becomes even shallower. As a result, conflicts have arisen between the PATT and the power station.
In Fenghuang County, infrastructure is unable to cope with 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 and natural gas water heaters for urban tourists, which increase the use of the fossil fuels. During my stay in a family motel in Fenghuang County, I observed frequent power outages. One night when I was on one of the busiest streets in Tuo River Town, suddenly everything went dark because of a power outage. The number of tourists has also been exceeding the capacity of local accommodation during peak periods, when many tourists have to stay in lodging outside Fenghuang County. The head of the county tourism bureau told me, “Last year’s gold-weeks, there were so many tourists that I even had to let some stay at my house.”
Because of the overload on the infrastructure, the local government is planning to expand Tuo River Town into nearby areas, which is expected to be finished before 2020.
This is Fenghuang County’s primary urbanisation project. A new bus station and a new bridge are already under construction now as part of this project. The local government will expropriate large cropland areas from the peasants. The plan calls for the residents of Tuo River Town to be relocated in the expanded areas, but they still may work or run their businesses in town. This commute will, therefore, increase energy and transportation costs. The spatial separation of tourist areas from the rest of the society will create social segregation, which means the mass of tourists will be surrounded by, but not integrated with, the host society. This project will undoubtedly generate major impacts on the lives of local people. The ambitious local government is 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, local people are left with little choice but to embrace it.

The local government made efforts to solve environmental problems caused by tourism, but these efforts were limited. For example, the local Environmental Protection Bureau (EPB) began regulating traffic within the downtown Tuo River Town to control air pollution. Two taxi companies bought the exclusive right to operate transportation in town.
In 2003, the EPB banned 1,100 motorcycles. One hundred taxis took the place of the motorcycles as the primary means of transportation for tourists in town. In addition, 10 battery powered buses were running in downtown area. The EPB also adopted policies to regulate the entry of private cars in downtown. These restrictions reduced traffic congestion, noise pollution, and the high cost of maintaining the historic stone road in town. By the summer of 2005, these were the only positive measures carried out by the local government to mitigate the environmental problems. I interviewed the head of the EPB about what the bureau was doing about the negative environmental impacts of tourism development. I found out that the EPB stopped monitoring the quality of water and air several years before, although this was supposed to be one of its basic duties. The head said: We just don’t have enough funds to do more. We have proposed that the PATT should return one yuan from every tourist’s ticket payment for an environmental protection fund, but, you know, the PATT of course isn’t willing to do so.

It is not clear whether the local government or the PATT should be responsible for carrying out specific conservation measures. Because the PATT pays a government tax and a fee 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 been contributing 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 itself into commercialism. I was in Fenghuang County in early 2002, 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 have lunch or dinner with their families. Much has changed since then. In the summer of 2005, a Hmong woman told me that if I wanted to take pictures of her, I must either buy some of her knitted goods or pay her for the pictures. There were no public 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 sell their 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 people who had left town years before to seek employment in the cities have come back. They expect to find more opportunity back in their hometown due to the new tourism industry.
They invest in small businesses with the money they saved for years working in cities, or assist their families in running their family motels or restaurants. For example, a woman told me that she migrated to Beijing several years ago and found a job there. Hearing about the tourism industry in Fenghuang County, she went back to help her brother and sister in-law run their family motel, which had been established two years previously and had 38 beds then.
Secondly, community bonds also are enhanced because local residents have united together against the PATT and against the local government. The PATT has bought the eight sites in Fenghuang County, and local residents no longer have free access to these tourism resources.

Therefore, intense conflict has arisen between local people and the PATT over the issue of tourism resource use. For example, sightseeing by boat is one of the most attractive entertainments for the
tourists. The PATT has its own boat team and hired 50 local boatmen, but the tickets for it are expensive. The local boatmen, who are not hired by the PATT, also are interested in this business. They began to attract tourists to choose their boats by offering much cheaper prices, which negatively influenced the PATT’s tours. The PATT took it for granted that they should monopolize this business since they have paid the local government to manage the major local tourist resources for 50 years. Because they were unable to prevent competition 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 local boatmen to enter the central sightseeing part of the Tuo River for three days a month. However, the rest of the month, they could just enter the upper and lower part of the river, where the 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 and more money out of their monopolisation of the eight sites in Fenghuang 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 Tuo River Town where tourists assemble to pass out flyers and stop or follow tourists on the street, soliciting them to visit their villages. Other villagers stay at the entrance of the villages and sell tickets. The prices of these tickets are usually expensive, around ¥100 yuan ($12), but are not fixed. Village leaders are developing cooperative relationships with bus drivers and tourist guides, promising them a considerable kickback for each tourist they bring. The kickback is usually more than 50 percent of the ticket price. To entertain tourists, village girls dress up in Hmong costumes and perform traditional Hmong dances such as the Hmong drum dance (see Feng 2007a for a detailed discussion of Gouliang Hmong Village tourism development 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 an increasing number of tourist complaints. Several tourists warned me, “Don’t go to those places, they are not good. All the people there want is your money.”
On one hand, family and community cohesion is enhanced. However, on the other hand, the conflicts among the PATT, the local residents, the local government, and the tourists are becoming fierce. This was especially demonstrated in the case of Yellow Silk Village in Ala Town, 12 miles away from Tuo River Town. The historic rampart around Yellow Silk Village is one of the eight sites leased to the YDCC represented locally by the PATT. It was first built in 687 a.d. during the Tang Dynasty. The stone architecture added in 1700 a.d. during the Qing Dynasty has been well restored. The rampart around the village is the only one of its kind in Hunan Province. The PATT is interested in investing to rebuild the whole village to what it was like hundreds of years ago to make the village as the PATT’s new tourist attraction rather than just the village’s rampart. So the local government required the villagers to move out and allocated a piece of land to resettle them. As compensation, each household was given a piece of this land to build a new house, along with ¥350/m2 in compensation. The original village consists of more than 90 households, and about two-thirds have moved out. The remaining 30 households refused to move because they thought the compensation was too low. These villagers believed that the PATT bought the management rights only to the rampart around the village. The 30 households then organized their own business selling tickets to tourists at the opposite side of the village entrance, where the PATT was selling tickets. A villager who served as my guide said indignantly, “They are just a bunch of outsiders, how can they beat us? We need to unite together to strive for our own benefit!” The presence of two ticket booths and two different kinds of tickets confused the tourists. The villagers raised funds to rebuild their temple and pavilion inside the 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 to control the situation. The PATT turned to the local government for help. Even though the local government was eager to make the villagers move out too, there was not much they could do besides persuading the villagers. However, this didn’t meet the villagers’ expectations of either raising the compensation fee, or letting them share the PATT’s profits from their village’s rampart. As I was interviewing the CEO of the PATT, he answered a call on his cell phone, telling the caller, “We don’t want to deal with the residents in Yellow Silk Village any more. If the government can’t take good care of it as soon as possible, we will cancel investments to rebuild this village.” Hanging up the phone, he told me the caller was the head of Fenghuang County. Until the day I left Fenghuang, the local government was still trying to persuade the villagers to move out, but the villagers, who believed that the government appropriated part of the resettlement fund provided by the PATT, wouldn’t do so until their request for more benefits was met.

Besides, the role of local women is also changing, as some 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 traditional dances, renting out costumes, selling souvenirs, and soliciting tourists to favor their family motels or restaurants. During peak periods, women can make more cash faster from tourism than in agriculture, which improves women’s status in the family for a detailed discussion. Crime rates have also increased. The presence of a large number of tourists with conspicuous money and valuables, such as cameras and jewelry, increases robbery. Many bars have sprung up during the past three years. Some tourists enjoy staying late and getting drunk, which threatens local safety. My host family always reminded me, “Don’t come back too late. Be careful and be safe.” They told me that they missed the old days when no one locked their doors at night.

Mapping Economic Benefit Distribution and Social Power
Typical Fenghuang tourists frequently spend weekends and short holidays relatively close to their places of residence. Their desire is to escape the pressures of everyday urban living, to experience a change of environment, and to seek leisure outlets beyond the limits of the city. The colorful Hmong culture, the stunning natural views, and the traditional laid-back lifestyle in Fenghuang County satisfy their desire for the enjoyment of rural scenery, open space, and exotic ethnic attractions.
According to the survey conducted by the PATT in 2004, Fenghuang tourists mainly belong to middle and lower income class. In the summer, college students constituted a large segment of the tourists. Most tourists were from the nearby cities in Hunan Provinces (about 54.96%), in southwest China, and in Guangdong Province. A few were from more distant cities such as Beijing and Shanghai. In 2004, the average expenditure per tourist per visit (averaging 2 days) in Fenghuang County was ¥153 yuan ($19). In 2005, it increased to ¥230 yuan ($28). The relatively low expenditure was reasonable, given the income and origin of Fenghuang
tourists. According to the local officials, the local tourism industry lacked the ability of attracting tourists to stay longer and to spend more in local businesses rather than towards the PATT. This partially resulted from the overcrowding of the accommodations, services, infrastructure, and facilities in Fenghuang County.
Estimates of tourist expenditures show that the PATT and 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 directly by PATT were limited and poorly remunerated.

Second, local people who directly benefited from the tourism industry were a small minority of the residents of a few towns (largely in Tuo River Town), and an even smaller minority of the whole county.
In Fenghuang County, those who had more political power also gained more economic power. Some local people who were most actively involved in tourism were relatives of the local government officials, or even the officials themselves. Another group benefiting from tourism includes those who had migrated to cities to seek opportunities several years earlier. They then moved back and invested the capital accumulated during those years in the tourism industry: hotels, family motels, restaurants, photo shops, and real estate construction. The other local beneficiaries were those who own old stilt houses by the Tuo River. These houses were
not only old, but also outdated and dangerous. But now their unique local architectural style, integrating perfectly into the natural environment, has become tourist gold. The local government allocated funds to restore these old houses.
Lacking the necessary experience and capital, only a few indigenous owners run their own businesses. Instead, most of them rented the houses to investors. The rental income was relatively low compared to the income they might earn from running a family motel themselves, but it was risk-free and a considerable amount of extra income for the owners who in the past were quite poor.
The local tourism boom generated employment opportunities for ordinary people, but these opportunities were neither significant nor profitable. For example, land values were increasing in Tuo River Town with the tourism boom, which attracted more and more builders and real estate agencies. Surplus agricultural laborers temporarily gained employment in construction, but when construction was finished, many of them again joined the ranks of the unemployed.

As the biggest outside investor, the PATT receives the majority of the economic benefits. According to the contract signed in November 2001, the PATT can monopolize the management of eight sites in Fenghuang County for 50 years 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’s gross income from tickets increased rapidly by 137 percent from ¥13.6 million yuan ($1.7 million) to ¥32.2 million yuan ($4.0 million) between 2002 and 2004. At the same period of time, the PATT’s deficit dropped dramatically from about ¥45.4 million yuan ($5.6 million) to ¥7.3 million yuan ($0.9 million). The primary investment by the PATT is in the rehabilitation of historic buildings. During the first few years, this investment necessarily was large, but after a few more years, capital expenditure would be small, and much less would be required for daily maintenance. The PATT was very optimistic that large profits would be realized in a few years.
The county government receives ¥0.83 billion yuan ($102 million) for granting management rights to eight sites for 50 years. During this period, it also collects annual tax from the PATT. Because tourism development in Fenghuang County is still at an early stage, the magnitude of total costs is uncertain. The question is whether the increased revenue will be able to at least cover the increased expenditures caused by the tourism, for example, the expenditures on reinvesting in infrastructure and facilities, mitigating environmental degradation, and resettling local residents.

Leaders of both the county government and the PATT claim that tourism provides both the incentive for conservation and the economic means by which the rehabilitation and maintenance of scenic areas and historic sites can be carried out, and that it would economically benefit the local people evenly. According to my research in the summer of 2005, however, I found these claims to be dubious, as it was confirmed both by my impressions of Fenghuang in 2005 in contrast of those in early 2002, by the following data on the county government’s annual deficit, and the per capita annual income of the local population.
The county’s government’s annual deficit had been climbing especially since 2002, from ¥161.86 million yuan ($19.98 million) in 2002 to ¥238.93 million yuan ($29.50 million) in 2005 (CACP and PGFC 2005:13; Fenghuang Statistical Yearbook 2004, 2005). This demonstrates that at this stage, the investment needed in the county’s infrastructure and facilities with the rapid tourism boom was far beyond the economic benefit the county government was getting from the deal with the YDCC.
According to the per capita annual incomes of the local agricultural population and non-agricultural population from 2001 to 2006, the disparity gap between them had been widening, even though both their incomes increased: the per capita annual income of the local non-agricultural population (the minority of the total local population) increased from ¥3,316 yuan ($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 increased from ¥1,254 yuan ($155) to ¥1,984 yuan ($245) with an annual average rate of 9.6 percent. Nonmonetary subsistence activities alone cannot possibly fill the gap between them.
From 1995 to 2001, the percentage rate of agricultural to non-agricultural per capita annual income was generally increasing, closing the income disparity between the two populations, 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 income disparity. The first year of Fenghuang tourism Great Leap Forward, 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 for the past several years since its tourism boom are: increasing commodity prices (especially food, fossil fuel, and real estate); increasing education fees; tourism development issues (especially the environment); and increasing income inequality.

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