World Bank Document

PROJECT INFORMATION DOCUMENT (PID) APPRAISAL STAGE Report No.: AB6128 Project Name China: Shandong Confucius and Mencius Culture Heritage Conservation and Development Project Public Disclosure Authorized 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] No. 1, West Road of Qianfoshan, Jinan Shandong Province, P. R. China Postal code: 250014 Public Disclosure Authorized Tel no.: 86-531- 8195 2325 Fax no.:86-531-8195 2320 Environment Category [ ] A [X] B [ ] C [ ] FI [ ] TBD Date PID Prepared November 11, 2010 Estimated Date of November 22, 2010 Appraisal Authorization Estimated Date of Board April 5, 2011 Approval 1. Key development issues and rationale for Bank involvement Public Disclosure Authorized Background. Qufu and Zoucheng were the main cities of residence of Confucius and Mencius, two great philosophers of ancient China. The temple, cemetery and family mansion of Confucius in Qufu are inscribed on the UNESCO World Heritage List. China has applied for inclusion of more cultural heritage sites in the two cities in the World Heritage List. These two county-level historic cities are located in Jining Municipality, a poor area in the south-west of Shandong Province. They have populations of 640,000 and 1,100,000, and GDP per capita of RMB 31,767 (US$ 4,637) and RMB 39,790 (US$5,809), respectively. The Province’s economic development is based on large enterprises in manufacturing industry. The provincial authorities are committed to promoting economic diversification and developing heritage-based tourism. The number of tourists visiting these two historic cities has been growing steadily in recent years, reaching about 2.2 million in 2008, generating RMB 4.2 billion (US$ 617 million) in revenue. The contribution of tourism to Qufu and Zoucheng’s GDP is 15.1% and 3.6%, Public Disclosure Authorized respectively. The average annual income of local residents in the historic cities of Qufu and Zoucheng is only about RMB 4,200 (US$ 620), which is less than the poverty level of US$ 2 per day. The 2008 the average tourist stays were 0.6 days and 0.3 days, and the average expenditure per tourist per stay was RMB 392 and RMB 200, respectively. The reasons for the short stay are 1 that tourists have little information, incentives, or opportunities to spend more time and money, which would generate higher revenues at the local level. Most cultural heritage buildings and the historic walled cities are in state of decay due to: their being left unused, damage and the accumulated maintenance backlog of structural and non- structural weaknesses. In addition, signage, interpretation, and display are poor and do not facilitate visitor orientation and appreciation of such a great cultural heritage. Except for the main access roads in the historic cities, much of the infrastructure is obsolete, substandard, or inadequate. Historic city regeneration would require rehabilitation and renewal of the outdated infrastructure. Sufficient funds for maintenance have not been allocated as a routine procedure for operation and maintenance of cultural heritage assets in the two historic cities of Qufu and Zoucheng, and they are in need urgent repairs. Many traditional skills that are still available are not put to daily use, rather for occasional preservation works only, when central government grants become available. A number of unique cultural heritage assets in the historic cities of Qufu and Zoucheng are still standing, but many are under risk of collapse. Other historic buildings have already been demolished and poorly rebuilt, or simply copied without effective planning and without conforming to acceptable building standards or development control. The resulting urban environment in the historic cities provides poor living standards to local residents and an unattractive environment to tourists. Adequate development control is lacking even within the buffer zones around the cultural heritage assets. Effective planning and development control are necessary to ensure that these lapses are remedied and not permitted in the entire regeneration of the historic cities of Qufu and Zoucheng, in order to achieve a harmonious result, livable for local residents and attractive to The institutional framework to conserve cultural heritage in China has improved over the years: China has ratified several important international conventions and declarations on cultural heritage conservation; a national agency for cultural heritage conservation (State Administration for Cultural Heritage - SACH) has been established; laws to protect cultural heritage assets have been formulated; and cultural heritage institutions have been formed at the local level. Furthermore, major policies have been developed at the central level, including formulation of key principles for cultural heritage conservation and management in association with the International Council on Monuments and Sites (ICOMOS), in 2004. The adoption of effective historic city regeneration and cultural heritage conservation policies, and sustainable tourism management are necessary to unlock the economic potential of cultural heritage assets in Qufu and Zoucheng. Key goals for the cities are to: (i) increase the economic benefits of sustainable tourism; (ii) establish an effective framework to manage cultural heritage assets; (iii) address the whole heritage conservation cycle in a sustainable manner; and (iv) enhance the historic cities’ attractiveness. Benefits to the local communities will increase when tourists are provided opportunities and attractions to spend more time and money in the cities, and explore areas beyond the major 2 cultural heritage assets (i.e. the Confucius and Mencius temples, mansions, and cemeteries). This would require that: (i) tourists are offered a comprehensive learning experience in the history, culture, and teachings of Confucius; (ii) signage and presentation are improved; (iii) a network linking the various cultural heritage assets is established; (iv) local communities are involved in development of sustainable tourism; (v) local residents are provided incentives and adequate support to expand tourism-related businesses and/or start new businesses; (vi) local products and handicrafts are branded; and (vii) the urban environment in the historic cities is made more attractive to local residents and tourists. An effective framework to manage cultural heritage assets should be established. Vertical and horizontal coordination among the various levels of agencies dealing with cultural heritage conservation is often lacking. Moreover, local institutions in charge of historic cities and cultural heritage often lack financial resources, information systems, technical and management skills to adequately integrate cultural heritage assets in local economic development, and they tend not to give enough importance to adaptive reuse, which is fundamental to support heritage-related income generating activities. Sustainable historic city regeneration and cultural heritage conservation policies, as well as effective tourism management need to be adopted in order to unlock the economic potential of cultural heritage assets in Qufu and Zoucheng. Key goals for the area include: (i) increasing economic benefits of sustainable tourism; (ii) establishing an effective framework to manage cultural heritage assets; (iii) addressing sustainability of the whole heritage conservation cycle; and (iv) enhancing the historic cities’ attractiveness. Rationale for Bank Involvement. Effective cultural heritage management and conservation can bring about economic development in historic cities. World Bank experience demonstrates that investing in the cultural heritage of historic cities where poor and marginal communities live can bring profound improvements in their livelihoods. The record of Bank-financed projects shows that regenerating historic cities and conserving their cultural heritage have strengthened national and local economies, provided incentives for job creation (e.g. small and medium enterprises in the historic cities), improved the urban environment, enhanced the quality of public spaces, and encouraged the establishment of public-private partnerships. Furthermore, Bank-financed projects show that revitalized historic cities can increase property values and tax revenues, thus making available additional resources to support local institutions and public service delivery. The Bank can bring worldwide experience of development challenges to historic city regeneration, cultural heritage conservation, and sustainable tourism development. Since the late 70s, the Bank has financed 241 operations (208 lending and 33 non-lending) which included components in these topics. Through these projects, the Bank has demonstrated that historic cities and cultural heritage assets can be centerpieces for linking local economic development and poverty reduction, and facilitate permanent jobs in the historic cities, where poor communities usually live. Experience from Bank projects also shows that cultural heritage and its manifestations are seen as assets that contribute to social cohesion and as an inheritance to be protected for future generations. Developing countries frequently lack financial resources to maintain

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