Project Information Document (Pid) s26

PROJECT INFORMATION DOCUMENT (PID) CONCEPT STAGE Report No.: AB5520 Project Name China: Shandong Confucius and Mencius Culture Heritage Protection and Development Project Region EAST ASIA AND PACIFIC Sector Public administration- Other social services (80%);Sub-national government administration (20%) Theme Other urban development (100%) Project ID P120234 Borrower(s) PEOPLE'S REPUBLIC OF CHINA Implementing Agency Shandong Provincial PMO [Planning and Construction Office of Chinese Cultural Symbolic City ] Environment Category [ ] A [X] B [ ] C [ ] FI [ ] TBD (to be determined) Date PID Prepared February 28, 2010 Estimated Date of August 31, 2010 Appraisal Authorization Estimated Date of Board September 16, 2011 Approval

1. Key development issues and rationale for Bank involvement

Background. Cultural heritage assets in Qufu and Zoucheng [Comment: Is Zoucheng a World Heritage site yet?], include the Confucius Temple, Kong Family Mansion, and Burial Grounds Complex. These cultural heritage assets have been recognized as a UNESCO World Heritage Site, due to their “outstanding universal significance,” for “representing a masterpiece of human creative genius,” and for being “an architectural ensemble which illustrates a significant stage in human history.” In addition to these major sites, the two cities have over 100 national-level cultural heritage assets, including the ruins of the capital of the ancient Lu Kingdom; the temple, mansion, and cemetery of Mencius; the birthplace of Confucius, with ancient temples and libraries; historic walled cities; and several other heritage assets relating to Confucianism and the roots of Chinese civilization.

Qufu and Zoucheng are two neighboring county-level cities in Jining Municipality, a poor area in the South-West of Shandong Province. The area was home to some of China’s earliest civilizations, and is rich in cultural heritage assets. Cultural heritage assets in the project area include the Confucius Temple, Kong family mansion, and burial grounds complex, a UNESCO World Heritage Site, as well as over 100 national-level cultural heritage assets. Qufu has a population of 640,000, covers an area of 896km2, and is poor, with GDP per capita of Y31,767 (US$4,637), significantly lower than the average of Shandong Province. Zoucheng is located to the South of Qufu, and is both larger and somewhat more affluent, with a population of 1.1 million, a surface area of 1,613 km2, and GDP per capita of Y39,790 (US$5,809). Zoucheng has a developed coal mining and power sector. The number of tourists visiting the two historic cities of Qufu and Zoucheng has been steadily growing in recent years, reaching 9.7 million visitors in 2008, generating revenues of RMB 4.2 billion. In Qufu, tourism accounted for 15.1% of GDP and in Zoucheng for 3.6%. Of the tourists, approximately 40% come from within Shandong Province, mainly on day trips by car, 40% come from other surrounding cities and provinces, usually by tour group, 16% come from other Chinese cities, and about 4% come from foreign countries.

Although tourist arrivals have been rapidly growing in recent years, visitors have little information, incentive or opportunity to spend more time and money. Out of 9.7 million tourists that visited the two cities in 2008, their average stay was only 0.6 days and average spending RMB 392 per stay. In Zoucheng, the average stay was only 0.3 days, spending RMB 200 per stay. The average annual per capita disposable income in Qufu was Y4,479 (US$654) in 2008, marginally below the poverty line of $2 per day, and lower than the average in Shandong Province, indicating that despite the large numbers of tourists, the local population derives limited benefits from tourism.

Rationale for Bank Involvement. The World Bank is able to bring worldwide experience of development challenges to cultural heritage sites and cities. Over the last decades, the Bank has financed 241 operations (208 lending and 33 non-lending) having components in heritage preservation and promotion of local economy through sustainable tourism. Through these projects, the Bank has learned that cultural heritage can be a centerpiece for linking local economic development and poverty reduction. The Bank has also learned that cultural heritage and its manifestations are seen as assets that contribute to social cohesion and as patrimony to be protected for future generations. Developing countries frequently lack financial resources to maintain cultural assets, much less to develop the necessary infrastructure to facilitate new activities that lead to sustainable development. Often there is a lack of technical know-how and institutional capacity to mainstream cultural heritage through sustainable tourism without disrupting the social fabric and damaging the natural environment. These issues can be effectively addressed with the support of an institution such as the World Bank.

2. Proposed Project Development Objective(s)

The project development objective is to assist Shandong Province to regenerate the historic cities of Qufu and Zoucheng and bring about economic benefits to local residents through: (a) cultural heritage assets preservation and presentation; (b) upgrading of urban planning and infrastructure services; and (c) capacity building for cultural heritage management and heritage-based sustainable tourism development.

3. Proposed project components

Component 1: Cultural Heritage Preservation and Protection (about 1/3 of project funds). This component will address crucial issues to preserve the valuable cultural heritage assets of Confucianism, and will include: (i) physical preservation of key cultural heritage assets of world, national, and local significance; (ii) signage and tourism information, presentation, and improved management to enhance the use and attractiveness of assets and the learning experience for tourists and local people; and (iii) digital library on Confucianism and Chinese traditional culture. Component 2: Historic Urban Areas and Infrastructure Upgrading (about 2/3 of project funds). This component will focus on: (i) urban upgrading, façade renovation, and urban area reconstruction pilot projects, including densification; (ii) environmental upgrading, landscaping, green areas, and moat and river rehabilitation; (iii) construction of tourism facilities, parking and information centers; and (iv) public service infrastructure upgrading, roads, water supply and sewerage, and electricity networks.

Component 3: Capacity Building for Heritage Management and Project Management (about 2 million USD). This component will include technical assistance for: (i) community capacity building for tourism income generation (e.g. tour guide, homestay, restaurant, crafts, entrepreneurship, etc), and communications/awareness campaign; (ii) techniques and institutional arrangements for cultural heritage preservation, including financial arrangements for O&M; (iii) historic city planning, development, and regulations, including a development control framework and archeological management; (iv) project management, including design review, advisory services, monitoring, reporting, and evaluation.

4. Safeguard policies that might apply

Safeguard Policies Triggered by the Project Yes No TBD Environmental Assessment (OP/BP 4.01) X Natural Habitats (OP/BP 4.04) X Forests (OP/BP 4.36) X Pest Management (OP 4.09) X Physical Cultural Resources (OP/BP 4.11) X Indigenous Peoples ( OP/BP 4.10) X Involuntary Resettlement (OP/BP 4.12) X Safety of Dams (OP/BP 4.37) X Projects in Disputed Areas (OP/BP 7.60)* X Projects on International Waterways (OP/BP 7.50) X

5. Tentative financing Source: ($m.) Jining Municipality, and Qufu and Zoucheng County towns 68.50 International Bank for Reconstruction and Development 50.00 Total 118.50

6. Contact point Contact: Shenhua Wang Title: Senior Infrastructure Specialist Tel: (86) 10 5861+7761 Fax: (86) 10-5861-7800 Email: [email protected] Location: Beijing, China (IBRD)

* By supporting the proposed project, the Bank does not intend to prejudice the final determination of the parties' claims on the disputed areas