 |
Four Rivers & New Heights
A travel report on the development of tourism in Sichuan and the opportunities for foreign investors in the tourism industry.
After an absence of 13 years the architect Yang Bo is coming home. It’s not homesickness that’s bringing him back; neither is it marriage or retirement, or some other personal reason. It’s opportunity that’s luring him back: thirteen years after he found prosperity in Shenzhen, the boom-town across the water from Hong Kong, now it’s Sichuan that’s booming. "In Sichuan we have saying that water by nature always goes down the mountain, but people can’t be like water – people need to go up the mountain,” Yang Bo told me when I met him in Deyang, a small city in Sichuan. He had just clinched a partnership agreement with a real estate company, and he was working on another scheme, a Western restaurant. Then he was due to fly back to Shenzhen, pack his things in his car and drive to Sichuan. "People need to improve themselves, people need to keep moving up the mountain, and money can be made here now.”
In his long drive home, Yang Bo is going up literally and figuratively – a journey from the coastal plains to some of the highest mountains in the world (three-fourths of Sichuan is mountains), and a journey to the new centre of gravity in China’s vast western hinterland. Indeed, the frenetic development is visible in the traffic roaring along newly-laid highways: an endless straggle of buses (ferrying an increasing number of tourists between attractions) and cargo trucks (hauling products and building materials). Statistically, real estate investment in Sichuan grew by thirty-eight percent last year (compared to a growth rate of twenty-three percent in Shanghai, Beijing, Shenzhen and Guangzhou). And the provincial capital Chengdu, already the cultural and commercial hub in western China, is an emerging international city. Last year, for example, Air France and KLM became the first airlines to operate direct flights to Chengdu from outside Asia.
“Chengdu has emerged as the top investment location in inland China due to a large graduate population, relatively low operating costs, a reputation as the most liveable large city in the west region, combined with the professional skills of the Chengdu government in dealing with foreign investment,” concluded a report, titled China 30, by Jones Lang LaSalle earlier this year. The report, which gave Chengdu the thumbs-up in every sphere, says the city is "gradually appearing on the radar of those multinational companies and real estate investors trying to build a strong pan-China presence, as well as those multinational companies seeking to access the large domestic consumer markets in west China… the city is also a large strategically located inland city which will continue to attract diverse businesses.”
One of those businesses is the new Shangri La hotel, a sleek glass tower that opened a portion of its 594 rooms to guests at the end of last May, and, within a month, was running at over eighty percent occupancy. “Shangri La has had its eyes on Chengdu for some years,” confided Johnson Wong, the general manager. “Chengdu is now one of the best locations, especially given the boosts it’s receiving by the central government’s efforts and directives designed to develop China’s interior.”
“The hotel is mostly geared for business guests, especially those travelling for meetings and conferences, but at the same time we’re not neglecting leisure visitors,” Mr Wong added. “Tourism is another growth area, and the city was named by the central government as one of the best cities for tourism in China. They evaluated many things in the selection process, such as infrastructure, scenic spots and environment protection, and Chengdu scored high in all.”
Tourism is swelling dramatically, although it's hard to gauge the precise numbers of annual visitors because of people who arrive overland, in trains and buses, from nearby provinces. Additionally, numbers can be blurred by the various categories of tourists – Sichuan residents who travel within the province, Chinese nationals from other provinces, and foreign visitors. Yet, working with various statistics, it’s reasonable to extrapolate that the number of foreign tourists might hover at just below a million. Wang Weijin, deputy director of the foreign investment division at Sichuan’s Department of Commerce, told me that of the "16.3 million travellers that arrived in Chengdu’s airport last year, I calculate that about half are leisure or business visitors” – but most of those are likely to be Chinese visitors.
The provincial government has marked tourism as one of the ‘eight pillars’ of the economy, and the efforts to expand the industry are yielding results. Wu Mian, deputy director of the Sichuan Tourism Administration, rapped out a succession of promising statistics when I met him. “In 2000, tourism contributed to 8% of the GDP; this has grown to 11.3% in 2006; and, according to our projections, tourism revenues by 2010 will account for 13% of the province’s GDP,” Mr Mian told me. “The province now has 486 hotels and 667 travel agencies, and foreign tourists alone last year spent US$400 million.”
As the province becomes more accessible – for example, next year the world’s highest airport will open in Kangding, the gateway town to the northwest region – and better known, the growth in tourism will accelerate. After all, the tourist attractions need no gimmickry and no embellishments. From the primeval northern mountains – which are the richest temperate habitat on earth – to the high Tibetan grasslands of the northwest, from the litter of temples and the grand Buddha at Leshan to the Buddhist ceremonies and Tibetan horse-racing festivals, and from the excellent cuisine to the traditional theatre shows, the package of attractions is varied and outstanding. It would take repeated visits to tour the entire province, which is almost as large as Spain.
And yet tourism is still concentrated along a well-developed but limited circuit. Most visitors travel in package tours, and while Jiuzhaigou Nature Reserve – a spectacular World Heritage Site of high alpine mountains, thundering waterfalls, and pristine lakes – now gets 2 million visitors every year, other nearby scenic spots, which are equally outstanding, only get a trickle of visitors. The same can be said of the province’s northwestern Tibetan region, one of China’s least developed, where the combination of arduous mountain travel, poor food, and rough hotels means that visitors are presently mostly limited to pioneering backpackers, which include Westerners and Chinese young people from Guangdong, Hong Kong, and other urbane coastal cities.
The pace of growth could also be faster, and independent tourists would spread out more, if language wasn’t such a hindrance. From a foreigner’s perspective, the language barrier is a problem all over China, but it’s acuter in inland provinces like Sichuan, where exposure to foreigners is relatively new. Few staff outside five-star international hotels speak any English, and few restaurant have menus in English, something that makes the simple process of ordering a meal a frustrating experience. In the process, foreigners traveling independently miss out on the excellent cuisine, simply because they don’t know what to order, and have to resort to miming and pointing at ingredients. It’s the same with everything else, whether finding a bus or finding a room or finding one’s way – it makes independent travel dispiriting and tiresome.
Only Chengdu is tackling these obstacles with systematic assiduousness. “Last February Chengdu was awarded the title of Best Tourism City in China by the World Tourism Organization and National Tourism Administration of China,” told me Wang Ruhua, spokesperson for the Chengdu Tourism Bureau. “And foreign tourists are increasing rapidly; for example, in 2004 the number of foreign visitors stood at 408,800, in 2005 the figure climbed to 500,200, and last year it reached 575,000. We see these encouraging signs as a good start, and the key point now is on how we can solidify these achievements. To this end we have a plan that we will implement over the next few years.”
It’s an ambitious plan that mostly concentrates on dismantling, bit by bit, the language barrier. Street signs will be improved; boards showing bus routes at bus stops will have English and Chinese street names; hotels, restaurants, shops and leisure spots will put up Chinese and English names; service staff, including taxi drivers and police officers, will be tutored in foreign languages, English especially; English TV programs about things that interest tourists and expats will be sponsored in local TV stations; multi-language audio guides will be installed in tourist sights. Another plan is to internationalise the airport by finding a mechanism to shorten the transfer time for connecting flights in Chengdu, as well as remove the requirement for a visa for visitors staying less than 72 hours, something that’s a boon for business travellers.
Outside Chengdu, in the rest of the province, all street signs are being substituted with bilingual ones, a project that is already at an advanced stage of implementation. Yet English-speak ability, as well as the level of the service, remains erratic and patchy. For the foreign investor this represents a duality: on the one hand, it’s hard to find English-speaking employees and to maintain a quality service without pedantic coaching; on the other hand, an investor more conscious of the importance of service and tourist-needs will be able to offer a better service than the competitors at only a little increase in cost.
That’s what the American Kris Rubesh and his wife Stephanie are planning to do in the hotel they are setting up in Kangding, the city that acts as a funnel to all the tourists visiting the northwestern Tibetan region of the province. It’ll be a hotel for backpackers, a reflection of the fact that virtually all independent visitors in the region are backpackers, either foreigners or Chinese from Guangdong province. “Our service will be more closely geared to the needs of foreign travellers,” elaborated Mr Rubesh. “We can guarantee clean bedsheets, and we will have certain service frills that tourists won’t find elsewhere. For example, foreigners like to drink coffee, but few or no places serve coffee, or have a coffee machine. Our plan is to make the hotel an information hub: the place where backpackers can find information on routes, meet travelling partners, find good maps, and perhaps a Tibetan phrasebook. We will also have a Western restaurant, the first place in town that will offer foreign food. The restaurant will be the biggest earner; you have to remember that a lot of Europeans would have been travelling around Asia for many months before they arrive in our region, so in our place they will find some home-cooking, or comfort food.”
It’s a fine plan, but the Rubesh’s have to live in the hotel so they can supervise the service and cook themselves. After all, the only reason why there are no Western restaurants in the region is because there is no local person capable of cooking foreign food. Even in five-star international hotels, non-Chinese foods cooked by local chefs tend to lack flair. At the Shangri La, for example, half of the hotel’s expats, which make up less that two percent of the entire workforce, are employed in the kitchen, cooking a selection of international dishes.
“If you want to find employees that have hotel experience, then that’s a challenge,” told me Mr Wong, the hotel manager. “We simply look for people who have the right attitude, and then we train them. Sichuan people are naturally friendly and easy-going, and then we train them to cultivate the correct attitude. We also teach them functional English – and certain departments like front office have to have a higher proficiency of English.”
“Overall,” Mr Wong said, “we have been satisfied with the arrangements for investment and building in Chengdu. The local people and the government do welcome and support foreign investment. In fact, the government takes the arrival of a hotel of the calibre of the Shangri La as the pride of the city.”
Mr Wong is right: the Department of Commerce received me enthusiastically, and they thanked me for writing about the opportunities for foreign investment in Sichuan. Ms Weijin, the deputy director of the foreign investment division, ushered me into her office, eager to impress on me the benefits of investing in Sichuan. “Investors,” she explained, “get favourable tax breaks, and other benefits in connection with the central government’s development plan for western China.”
She is talking about the government’s stimulus multi-year plan to speed up the development of the western regions which, generally, lag behind the most developed coastal regions by about a decade (Chengdu is expected to close that gap within five years). The incentives mostly consist of tax breaks, and these Beijing-driven policies are complemented by an extra raft of provincial incentives. These involve more tax exemptions as well as a rack of other fine-tuned favouritisms all designed to lure investors and lower the risk of investment. Foreigners can now wholly own most kinds of enterprises in the tourist industry; the exceptions are travel agents (and this is something that will change soon), as well as certain other fringe outfits such as theatre or cultural shows which require a permit from the central Ministry of Culture.
“We are particularly encouraging foreigners to invest in projects in scenic zones – these could be reception centres, or education centres, permanent exhibitions, and so on,” Ms Weijin pointed out. These types of projects fall under the Catalogue of Advantaged Industries for Foreign Investment, published by the department in a booklet titled Guide to Investment in Sichuan. For these enterprises, the advantages are pepped up, and the assistance by the department is more direct and intense. But in all types of projects, the government has set up a one-stop service centre, as well as the establishment of the Sichuan Investment Promotion Bureau, an affiliate of the Department of Commerce, whose role is to foster foreign investment by providing all forms of assistance and, in some cases, even locating suitable projects for foreign investors.
“We are an inner province, and Sichuan is not very well known,” told me Ms Lisa, a consultant of the Sichuan Investment Promotion Bureau. “We need a lot of propaganda so that more people around the world learn about the opportunities here.”
The supportive atmosphere that exists within the local government, as well as other enticements – the special incentives, the consistent growth, and the relatively low costs – has been tempting investors for some time, especially in the tourism industry. “Between 1978 and 2006, the province got RMB8.6 billion in foreign investment, and about a third of that figure represents investment in tourism projects,” told me Ms Weijin of the Department of Commerce.
Whatever one’s venture, large or small, it’s relatively easy at present to find a niche in a market that isn’t yet crowded or highly developed. Take two small touring and trekking agencies operating in the least-visited northwestern Tibetan part of the province – a region of high mountains and Tibetan sights that only opened to foreigners travelling independently in 1998. Tibetan Trekking, set up in 1996, carried 2,200 guests last year, most of them Asians from places such as Singapore and Hong Kong. “The number of clients has been increasing by about eight percent annually in the past few years,” told me Gao Li Qiang, co-owner of the agency. “Yet the profit per person is shrinking. There are various reasons for this; one of them is the loss of value of the US dollar and we fix our prices in dollars, another reason is that the improving tourism infrastructure is leading a greater proportion of travellers to go independently. Additionally, we also face greater competition so we are reluctant to raise our rates.”
One of those competitors is Chyoger Treks, a touring agency based in Kangding. It was set up in 2005 by Angela Lankford, an American who went to China as a peace corps volunteer and has since married and settled down. Ms Lankford does no marketing aside from word of mouth and website, and she’s been getting a steady trickle of customers. She’s also now running a separate business selling Tibetan traditional wear and crafts. “When I first moved to Kangding in 2001,” Mrs Lankford said, “foreigners were a rare sight. Now I might see a dozen every day, and I’m expecting a surge in numbers next year when the new airport opens. By that time I will have a third business: a coffee shop.”
For now, then, the steady increase in visitor numbers is able to sustain new businesses. Ms Lankford’s coffee shop will be the first in Kangding. And Yang Bo’s Western restaurant, when it materializes, will be the first in Deyang city. There are many more latent opportunities – the combination of wealthier locals and increasing tourists has opened the scope for new businesses and diversification. Sichuan, indeed, is giving new meaning and new vigour to the old saying that people's destiny, unlike water, is to go up the mountains.
(C) Victor Paul Borg 
|
