BOOSTING RURAL INCOMES: THE CASE OF TOURISM IN

UNCLAS SECTION 01 OF 02 BEIJING 021970

SIPDIS

SENSITIVE
SIPDIS

USDOC FOR 4420
STATE PASS USTR FOR STRATFORD, WINTER, ALTBACH
STATE PASS CEA FOR BLOCK
TREASURY FOR OASIA/CUSHMAN
USDA/ERS FOR LOHMAR, TUAN, SYLVANA LI
USDOL FOR ILAB

E.O. 12958: N/A
TAGS: ECON EAGR ELAB PGOV SOCI CH
SUBJECT: BOOSTING RURAL INCOMES: THE CASE OF TOURISM IN
HUNAN

SUMMARY
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1. (SBU) Tourism has emerged as an important source of non-
farm income in Hunan Province and may account for as much
as 50 to 60 percent of rural incomes in tourist
destinations in Hunan's countryside. Provincial officials,
motivated by this trend, plan to provide additional
resources to expand the sector. Discussions with officials
from other provinces underscore a more general and
widespread interest promoting domestic tourism in China's
rural areas. During a visit to Mao Zedong's hometown, Shao
Shan, local officials and farmers told Econoff that the
livelihoods of the region's residents are largely dependent
upon tourism, or as one farmer stated, Shao Shan "still
depends on Chairman Mao." END SUMMARY.

TRAVEL TO HUNAN
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2. (SBU) Shang Bin, Director of Planning and Financial
Division, Hunan Provincial Tourism Bureau, met with Econoff
in Changsha on September 25 and discussed recent
developments in the province's tourism sector. Econoff met
with Xiangtan Municipal Tourism Bureau officials in Shao
Shan on September 28 and interviewed farmers and
shopkeepers in Shao Shan on September 28 and 29.

RED, YELLOW, OR GREEN, HUNAN HAS LOTS OF PLACES TO BE SEEN
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3. (SBU) Shang stated that tourism is developing quickly in
Hunan's rural areas, accounting for 6.9 percent of the
province's GDP in 2005. According to Shang, there are
three types of tourism: (1) "Red" tourism to Communist
Party "revolutionary" destinations, (2) "Yellow" tourism to
imperial destinations, including the tombs of Emperors Yan
and Shun, and (3) "Green" tourism to ecological tourism
destinations, including Zhangjiajie. Hunan is a
particularly important Red tourism destination, with 12 of
the country's 120 Red tourism sites, including Mao Zedong's
hometown, Shao Shan. Tourists to Red tourism sites have
increased dramatically in recent years, and the number of
visitors to Shao Shan, for example, grew by 50 percent from
1 million to 1.5 million between 2000 and 2005.


4. (SBU) The majority of tourists to Hunan Province are
Mainland Chinese travelers, with some Japanese and Korean
tourists as well, Shang stated. Local governments want to
boost rural incomes by encouraging domestic tourists, who
have more disposable income than ever before, to visit
rural areas and spend money on hotel rooms, food, tour
guides, and souvenirs. Shang said that Hunan Province has
not been as successful attracting foreign tourists, but the
province is actively promoting ecological destinations in
order to do so.


5. (SBU) Shang emphasized how tourism in rural areas boosts
farmer incomes. He offered the optimistic view that even
in areas such where only a few hundred thousand people
directly receive an income boost from tourism, there may be
a few million rural residents who benefit indirectly
through improved infrastructure or wider availability of
other public goods.


6. (SBU) Hunan is not the only province promoting tourism
destinations in rural areas, and the province's experiences
represent a national trend towards encouraging domestic
tourism. Yang Shengdao, Director of the Henan Provincial
Tourism Bureau, told Econoff in March 2006 that Henan, as
the "origin of Chinese civilization" has a unique
opportunity to attract tourists, but that the province sees
itself in fierce competition with other provinces for
limited tourist revenues. Henan Province therefore is
aggressively promoting its tourism sector, and Yang, for
example, spends most of the year traveling to other parts
of China to promote the Shaolin temple (famous for martial
arts) and other noteworthy tourist destinations in the

BEIJING 00021970 002 OF 002


province. The goal of promoting tourism in the countryside,
Yang said, is to help boost rural incomes.

RED TOURISM IN SHAO SHAN: STILL DEPENDING ON CHAIRMAN MAO
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7. (SBU) According to officials at the Xiangtan Municipal
Tourism Bureau, per capita income for the 102,000 residents
of Shao Shan (which falls under Xiangtan Municipality)
increased from RMB 6000 (USD 750) to RMB 9928 (USD 1241)
between 2000 and 2005 with Shao Shan's rural resident
incomes growing from RMB 2936 (USD 367) to RMB 5150 (USD
643) during the same period. As much as 80 percent of Shao
Shan's population is engaged in tourism, the officials said,
with many of them working part-time on small farm plots and
part-time in the tourism industry. With tourism as the
primary driver, Shao Shan's GDP grew by 34 percent in 2005.


8. (SBU) Although still farmers in name, many of Shao
Shan's residents interviewed by Econoff said that their
primary occupation is now tourism-related. Many young
shopkeepers said that while they have relatives (including
parents or siblings) who are farmers, they enjoy a more
relaxed life and earn more money by selling Mao trinkets in
roadside stands. For others, the tourism industry is a
lifeline and an escape from a much harder life. One farmer
told Econoff that she derives approximately 60 percent of
her income from hawking Mao pins with the remainder of her
income dependent on growing rice. She said that without
the tourism revenue, it would be difficult to survive on
agricultural production alone. "You could say that we
still depend on Chairman Mao," she said.

COMMENT
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9. (SBU) People all too quickly sum up China's countryside
as the home of 800 million poor farmers, but the reality is
far more nuanced, involving widespread migration to large
cities and rural residents living urban lifestyles in large
towns with increasing reliance on non-farm income. Local
government's efforts to expand tourism--even though it
remains a small share of provincial GDP--illustrate the
importance that they attach to boosting non-farm income and
the recognition that agriculture alone will not help rural
residents narrow the rural-urban income gap. END COMMENT.

RANDT