An ancient county in energy-rich Shanxi Province in central China is offsetting the impact of the international financial crisis and is seeking new financial resources to restore typical architecture from the period in the dynasties of Ming and Qing.

Pingyao, with its ancient city compound listed in 1997 as a World Cultural Heritage Site by the United Nations Educational, Scientific and Cultural Organization (UNESCO), lies in a basin surrounded by working coal mines and chimney coking plants. However, local government is attempting to replace the unpredictable and polluting industry with tourism as the heritage site's main financial resource.

"Tourism income last year accounted for more than 40 percent of Pingyao's GDP (Gross Domestic Product)," said Li Feizhong, the county magistrate, speaking during the tenth annual Pingyao International Photography Festival (PIP) which opened on Sunday.

Like other UNESCO World Heritage Sites in China, the Pingyao Ancient City heavily relies on local economic growth and financial assistance, since it does not expect to receive central government funding to sustain those weathered bricks and stones that make up its ancient wall.

The international financial crisis and global downturn brought a nightmare to Shanxi's coal-related businesses from 2008 to 2009. The prices of coal and coke, an essential fuel and reducing agent used to produce steel, dropped by more than 50 percent at the end of 2008 as an aftermath of the decrease in demand by upstream industries.

However, the numbers of tourists to Pingyao in 2008 remained steady, registering the same as in past years at about 900,000. In fact, the number of tourists even jumped to more than 1,030,000 in 2009 thanks to the annual PIP festival and other government-backed events to promote local tourism.

During the week-long PIP festival this year it is estimated that more than 250,000 travellers and photography enthusiasts will pour into the ancient city, which occupies an area of only 2.2 square kilometers, and local officials will also embrace the tourist peak expected during the upcoming National Day holiday starting on Oct. 1.

"We are trying to shift the county's economic growth pattern to a smoke-free and more environmentally-friendly way of sustaining the heritage site and also seeking new resources to better protect it," said the county head.

Although the Pingyao Ancient City sold a record-high 88 million yuan (12.9 million U.S. dollars) in tickets, and traditional hotels and retailers in the black-brick city contributed more than 800 million yuan to tourism income in 2009, the county government still could not cover the financial shortfall for further heritage site preservation.

Further, the county government moved its departments and offices out of the over-crowded ancient walled city before it was listed as a world heritage site. More than 15,000 residents have also been persuaded to move out since 1997.

However, a lack of funding to build more new apartments for those residents moving out has hindered the progress of the relocation. Currently, there are still about 40,000 residents living inside the old city.

An overall development plan for the Pingyao Ancient City, drafted by Shanghai-based Tongji University, estimated that it needs about 2 billion yuan to build new homes for the residents moving out and to repair or reinforce the old city, which has been a problem for the county government even as it has brought in much more revenue from its increasing tourism income.

Scientists and archaeologists believe that another 15,000 residents should be moved to Pingyao's new living areas to keep the ancient city's number of residents under 20,000, the appropriate population load that the 2,700 year old compound could bear.

"Pingyao's tourism, whose reputation was greatly promoted by the PIP festival, is again helping us," county head Li Feizhong said. "The central government and a state bank have provided financial assistance for the heritage site's preservation."

According to the county government, the Export-Import Bank of China agreed to provide 660 million yuan in low-interest loans for the preservation program since 2010, and the Ministry of Culture chose to cover 80 percent of the interest on the loans during the first three years.

So far, the county government has received the first loan of 40 million yuan from the bank and will start construction around the city walls to improve water, electricity and other basic infrastructure, as well as more new apartments for residents moving outside, according to Li.

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