1. Project Summary and relationship to China's Agenda 21 This project identifies Hongsha Town as the community development center, which is located in Sanya city, Hainan province. The project seeks to establish a green product center of tropical intensive agriculture (e.g. fisheries and cultivation) and to develop tourism in this beautiful tropical city. This will provide sustainable livelihoods for the rural minority population and protect tropical mountainous and coastal ecosystems. This project is based on programme areas 10E and 7C of China's Agenda 21, and is related to programme areas 8A, 11A and 11G.

2. Background Sanya is a tropical city located in the southernmost part of Hainan province. The city has a population of 380,000, among which 260,000 are farmers. Sanya has been listed as an international tourism city because of its beautiful tropical scenery and special geographic location. With the infusion of goods and investment from abroad and other provinces, the economy of Sanya has boomed. Therefore, it has become one of the tourism regions in China which attract invests. However, those Li and Miao ethnic groups in the rural area, which consist 85% of Sanyaís population, are still poor with a backward economy. Their annual per capita income is approximately 20% of the urban residents' income. Moreover, in some suburban villages, most of the farmland has been acquired by businessmen. A lack of farmland and poor education has caused problemsl of sustainable development for the local ethnic groups. In addition, tourism development and urban construction activities have destroyed the ecosystem of Sanya urban and suburban area. It accelerates the rate of impoverishment in rural areas and hinders sustainble development of the environment, economy and society of Sanya, as well as the rest of Hainan province. Destruction of the living condition and the environment of rural indigenous people, and polarisation between rural and urban dwellers are world-wide problems of development for under-developed areas as a result of rapid urbanisation and modernisation. This project will demonstrate a solution to the above problem in rural villages and townships community development. The aims is to achieve common prosperity and sustainable development for rural and urban areas. The project aims to protect the tropical ecosystem, while developing agricultural and tourism resources. It also plans to improve farmland resources management and to support economic development of minority areas. All of them fall within the important scopes of the national and provincial Ninth Five-Year Plan (1996-2000) and the Long-term Targets for the Year 2010, and have been included in the Economic and Social Development Plan of Sanya city. The provincial and municipal governments have devoted much attention to the rural economic development of minor ethnic groups for a long time. As a result, they have formulated a series of favourable policies for them to form a special economic zone. With the booming economy of the Sanya urban area, the infrastructures of transportation and telecommunications have been improving day by day. These have laid a good foundation for the project implementation. The governments and business experienced wanton exploitation of resources and environmental destruction in the early stage of economic development. As a result, Sanya Municipal Government and businessmen proposed a new model for community development. The model allows indigenous people to retain land ownership and invite joint ventures in co-operative development with outside businessmen. This will promote the sustainable management of land resources and environmental protection.

3. Objectives

3.1 Long-term Objective To establish a sustainable tourism industry with tropical ecosystem protection, and to develop an intensive tropical agriculture. This will provide a good example of minority community development for the social and economical development of Hainan province.

3.2 Immediate Objectives * To formulate comprehensive development plans for tourism and high-efficient tropical cultivation and fisheries. The project plans to strengthen the local capacity building for sustainable development; * To establish a demonstration center of tropical green food, and to develop an industrial eco-agriculture; * To protect the tropical ecosystem and promote tropical mountainous scenery and indigenous culture and customs. The promotion aims to transform the town into a tourist attraction.

4. Outputs and Activities

4.1 A package of plans for tropical agricultural and tourism development in a minority community. This development zone will be led by Hongsha Town and extend to Linwang, Yucai, Yialiang and Gaofeng etc. These villages and towns cover an area of 670 square kilometres and a population of 65,000 people, 85% of which are Li and Miao ethnic groups. * Formulate a regional plan and strategies for indigenous social and economic development; * Formulate a land use plan, including reclamation and farmland development; * Develop a plan for population control and improvement of living standards; * Formulate a regional plan for tourism development and ecosystem protection. Monitoring Indicators: plans for minority communities development and regional tourism development, integrated sustainable development principle and reviewed by an experts group. Implementing Agencies: Sanya Municipal Government and involved local communities

Time Schedule: January 1997 - June 1997

4.2 Construction and management of a green food center of tropical agriculture. * Construct an fishery center for export. A gulf near the community would be developed as a fish farm for growing snapper, grouper, prawn, abalone and molluscs etc. within about a 10 sq. kliometre area. The gulf will produce 12,000 tons of seafood each year. The production will have an output value of US$ 30 million per year and a profit of US$ 10 million perÝyear; * Construct a food manufactory to process seafood, especially for shrimp sausage and fish sausage. The manufactory will produce 20,000 ton seafood each year in the first stage. The production will have an output value of US$ 90 million per year and a profit of US$ 10 million per year; * Construct an intensive cultivation base for tropical fruits and vegetables that produce little pollution. About 600 ha. of farmland is suitable for growing early maturing fruits such as mangos and bananas. The orchards are expected to produce 200,000 tons of fruit each year with an output value of US$ 12 million per year and a profit of US$ 2.4 million per year. The farmland which plants vegetables that produce little pollution, such as the wild fence vegetable, wild auricula-judae and water-celery, are expected to produce 2,000 tons with a total revenue of US$ 1.2 million per year and a profit of US$ 240,000 per year; * Establish standards for classification and a food industry complex for preservation, packaging, storage, transportation and sale. Monitoring Indicators: 10 sq. kliometres of fish farms, 600 ha. of local tropical crops that the ratio of fine seeds is 70%, total revenue US$ 113 million per year, payback period 3-4 years. Implementing Agencies: Hongsha Developing Community and Sanya industry and trade controlling company.

Time Schedule: January 1997 - December 1999.

4.3 Establishment and management of tropical tourist attractions. The community faces a peaceful gulf and is located in the most beautiful tourist area of Yalong gulf of the great Eastern Sea. With only 3 kliometres away from downtown Sanya city, it has enormous geographical advantage as a tourist attraction. * Construct a tropical botanical garden with an area of 7 ha.. The garden will serve as a center for tourism, culture, leisure and ecosystem protection; * Construct a three-star hotel with shopping and entertainment functions; * Establish entertainment facilities along the beach and launch a submarine for coral reef visits. In addition, special tourism sites for Hainan indigenous people's culture and custom will be established; * Construct manufactories to produce souvenirs and crafts, such as shell carving, coconut carving and non-ferrous metals arts, etc. Monitoring Indicators: 200,000 domestic and international tourists each year, total revenue US$ 50 million per year by tourism, the payback period 4 -5 years. Implementing Agencies: Hongsha Developing Community, other involved communities, and Hongsha industry and development company of Sanya organized by municipal government.

Time Schedule: January 1997 - December 2000

4.4 Enhance the sustainable development of the local minority community * Enact and enforce local regulations that protect investors' rights and establish a system of owner responsibility; * Establish an extension center for advanced fish farming and cultivation technologies; * Establish a professional school to train personnel in the hospitality management; * Provide training for community administrators, managers of agriculture enterprises and tourism services. Monitoring Indicators: Establishment mechanism of local special economic zone for investing and financing; 70% promotion rate of environmentally sound agriculture technologies, 250 graduates every year from the tourism school and agricultural school, 100 trainees every year for community administrators and agricultural entrepreneurs. Implementing Agencies: Hongsha Developing Community, Hongsha Industry and Development Company of Sanya.

Time Schedule: June 1997 - June 1998

5. Inputs

5.1 Chinese Inputs The local government and involved companies will provide adequate personnel, working space and facilities, farmland resources, infrastructures, as well as part of cost to develop technologies and products and to construct the hotel for community development.

5.2 International Inputs International support will contribute to the import of advanced fish farming and cultivation technologies, equipment, joint ventures and hotel construction. International grant will be expected to support the capacity building for sustainable development of the indigenous people.

5.3 Budget The total inputs of this project are estimated to be US$ 40.6 million. The government and involved companies will input US$ 26 million, and international inputs will be expected to be US$ 14.6 million.

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Table 1. Budget by Item (in million US dollars)

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Table 2. Budget by Output (in million US dollars)

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6. Benefits The project will directly benefit the local government, involved companies, land owners and international partners. All payback period of investment projects are expected to be three or four years. The per capita income of indigenous people is also estimated to increase from RMB 400 Yuan to RMB 4,000 Yuan in the year 2000. The benefited local communities will increase its annual production to a value of US$ 120 million. After the completion of the project, administrative ability of the community and the local government will be strengthened. As a result, indigenous people will be more inclined to participate in the market economy. In addition, the tropical mountainous and coastal ecosystem will be protected and improved. This project will provide a good model for other minority communities of Hainan province and other coastal areas of China.

7. Risks Sanya indigenous community has enormous potential in tourism. However, because the area is underdeveloped, it is necessary to educate the communities and to set up effective legislation that would protect the interests of the investors. The economic depression of developed regions or countries could also affect the demand for the products and services described. Involved companies should expand local and domestic product market to avoid the problem. Moreover, complicated arrangement of the project, the lack of technologies and shortage in senior managers also risk the implementation of this project. These difficulties can be minimised by importing advanced technologies and qualified personnel from developed areas.

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