Final Report - Asian Development Bank

into the Province’s tourism industry 13 . These and other enhancements will be needed for the Shaanxi
Province and the city of Xian to achieve the major increases in tourist numbers and revenues from
both domestic and international sources called for in the Shaanxi 11th FYP.
57. With government policy changes from exploitation of natural resources to the protection of
the environment and conservation based on “non-use”, many existing institutions have yet to
restructure or reorganize to deliver these new mandates. For example, the Louguantai Forest Farm
has moved from relying on logging revenues to pay for staff costs to being dependent on the
Government budget, and the Shaanxi Forest Department formed new units such as the Shaanxi
Animal Rescue Center which support its increasing role in conservation. These new enterprises all
suffer from weak management standards, budget shortfall requiring them to adopt cost recovery or
revenue generation activities.
58. The historical manner for PRC to address these issues was to create accountability through
assigning one manager to each business or enterprise. While achieving accountability for specific
functions this approach has, over-time, created a proliferation of new enterprises often with
overlapping jurisdictions and mandates. A similar organizational fragmentation exists within the nature
reserves that fall under national, provincial and county bureaus which are often linked to differing
National Ministries. These agencies, while providing similar functions, compete for their share of
revenues and resources often to the cost of wider conservation objectives. Interventions that
successfully address resource degradation require a multi-stakeholder integrated landscape approach
to address the underlying causes of degradation. The prevailing organizational and institutional
framework is however multi-agency based with little coordination or cooperation while the individual
agencies compete for market share.
59. The ambiguity created by current organizational arrangements for the Project Area has been
further compounded by the agreement to assign the Project to the Qinling Botanical Garden
government unit effectively duplicating existing organizational and legal mandates of the Louguantai
Forest Farm, Shaanxi animal Rescue Center and the 16 collectives and their land. Organizational
consolidation that unifies these interests into a unitary institutional model is a critical success factor to
achieving long term commercial sustainability and better resource use outcomes and has been
agreed in principle by the SPG.
60. A significant constraint to achieving sustainable natural resource management outcomes is
the government safeguards for changing land use and accessing water resources. These safeguards
seek to protect food security by ensuring that there is no net loss of basic cultivated land within a
county or province. However, this precludes the movement of land into higher value and perhaps
more sustainable land uses such as the proposed development of large scale commercial tourism
attractions.
61. The Project seeks to support the Shaanxi 11 th FYP implementation and its expected impact,
outcome and outputs for the Project Area and wider Qinling Mountains will provide a significant
contribution to the 11th FYP goals. In addition, the tourism facilities and other commercial activities
proposed for financing under the Project will benefit significantly from: (i) the transportation
investments, (ii) the overall tourism development strategy, (iii) the further development of Xian as a
major Asian and international city, (iv) the improvements to rural family incomes, (v) the more
balanced, diversified and dynamic economic structure, and (vi) the higher levels of science
development, innovation, and urban prosperity that will result from the Shaanxi Provincial
Government’s 11th FYP as well as broader trends in the provincial, national and international
economies over the longer term.
13 The requirement and trend for tourism in China to emphasize higher quality and high value added over
quantity-based tourism were discussed in a recent article in the China Business Review. In particular, this
article discussed the new demand for luxury among US baby boomers and tourists from other OECD
countries. This is creating a broader market of travel purchasers who are willing to pay premium prices for an
up-scale travel experience to China. These tours often have a starting price of $500 per day and their duration
on average is 14 days. This kind of luxury tourism will have a small but growing market in China as the
country’s upper income and upper middle class continues to expand. See Chase Poffenberger and David
Parry, “Travel and Tourism: The New Face of Tourism in China” China Business Review, January-February
2007.
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