China’s National Parks: Capitalizing on Conservation:
China’s National Parks: Capitalizing on Conservation:
China’s National Parks are some of the most complex business models as it needs to focus on the importance of having a sustainable and balanced system that benefits all stakeholders.
The main challenges identified primarily stem from a lack of harmonization between the various stakeholder goals. These stakeholders include the government departments, visitors, environment and local communities. Considering these stakeholders, the future success of national parks can be measured by their capacity to reduce poverty, promote long-term rehabilitation of wildlife habitats, and simultaneously promote Chinese culture whilst operating profitably. A system that achieves all three successfully is an ideal outcome.
The objective of this article is to highlight the challenges of the achieving long term success for China’s National Parks which is a complex and an unconventional business model. 1421 Consulting Group provided advise to one of the best know National Parks called, Four Sisters Mountain Range (四姑娘山) in Sichuan and here we will share some of the recommendations.
The most influential participants in the development of nature reserves in China are the various government bodies that are involved. The responsibility of nature parks usually involves multiple departments and to add to this, different layers of hierarchy, from local to national level of governments. There can be many overlapping objectives, however there are also performance directives that diverge away, inevitably creating a suboptimal outcome.
A better approach is to have a single strategy that synchronises all objectives with a standard operating procedure for implementation and communications. Moreover, the objectives of the various governmental institutions should focus on ecological functions and not management objectives. This will ensure more alignment.
The majority of China’s National Parks capital structure is mixed between government investment and also using self-generated capital. The government’s investments will be for infrastructure such as roads and the self-generated capital will come from other sources from commercialization and sales which will be used for operations.
With the pressure of commercialization, it does come with additional costs as it may create conflict of interests with other stakeholders.
Unfortunately, it is not as straightforward as increasing the number of visitors to raise revenue. For example, more visitors increases the rate of natural erosion and brings along more pollution, which is problematic for other stakeholders. Therefore, a balanced strategy needs to be carefully devised.
National Park managers have to explore a variety of options for funding. For instance, using leased concessions and Build-Operate-Transfer (BOT) contracts this can alleviate some financial pressure.
Furthermore, at the moment China’s National Parks only cater for a small section of the market, whereas there is a wider spectrum that is not being monetized. By targeting visitors with different interests and higher propensity to spend, it is possible to yield a higher revenue per head. An example, a rock climber has different needs compared to a single day tourist. The willingness for these different participants to spend locally is therefore different. The processes of understanding how to serve separate sub segments can yield a higher output.
Local communities of China’s National Parks
Some of the local ethnic minorities have had to adjust and redefine their occupations because their agricultural experience has become obsolete due to the rapid developments in their areas. Government authorities have supported the local ethnic minorities mainly through monetary support, however this has its limits. Many of them need guidance on operating in the tourism business. For example, they need advice on operating a hotel and soft skills suitable for tourism. The gap here can, and needs, to be bridged and if so would create a sustainable microeconomy. In turn, this will create a more harmonious relationship amongst stakeholders.
Furthermore, tourism also encompasses a cultural aspect. With so many ethnic communities vibrant with their heritage, there is an unique opportunity nature reserves currently do not capitalize on enough. Different provinces have different ethnic communities, therefore promoting Chinese diversity with locals not only protects their culture but also keeps them involved and relevant.
Erosion of the environment mostly comes from the visitors and it is accelerated through the lack of education on conservation. The depletion comes from littering, pollution from hotels and suboptimal waste management systems. Methods for each type of issues require a short, medium and long term solution. To remedy such an issue the management of a Chinese National Park needs to measure the progress. It is vital to have continuous monitoring. Monitoring is more effective when there are suitable action plans prepared for various outcomes so foresight would be essential in preservation.
It is known that having more visitors has a direct impact on the environment, whether that be through the visitors themselves or through the businesses and services involved. Building hotels, chair lifts, and restaurants further deteriorates the surroundings. For example, water usage has risen dramatically with the inﬂux of tourists and the development of infrastructure, sometimes creating conﬂict and competition for the resources between local farmers and touristic requirements. A careful balance between visitors and commercialization of the environment can be managed for sustainability through monitoring systems. Systems which monitor consumer behavior, trends and patterns will increase the scope for a more optimal outcome. Currently other international nature reserves adopt a similar approach so it should be incorporated in China’s rising sub sector of tourism.
Safety plays an important role in visitation to natural reserves. With a growing middle class willing to experience new adventures, the rise of safety is a key determinant in attracting tourists. Safety infrastructures varies for the different types of tourist from safe viewing platforms to search and rescue. Developing proper safety procedures and infrastructures, and promoting them appropriately is a tool to encourage visitors to explore.
Although the knowledge level of managers is increasing, the general situation is complicated with multiple layers of governance and regulations from different departments. This is very challenging to coordinate decision making. It may be difficult to realistically challenge this issue but addressing this with a new management system that has structural capability of integrating information and communications would alleviate some of the management roadblocks to efficiency.
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We provide strategic advisory through analysis of the current business, understanding issues and then making an alignment to your long term goals. With our expertise in dealing with complex business models, we will create a realistic roadmap incorporating your future budget and resources. We can then project manage this process towards your objectives.
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Ali Sheikh graduated with Honors in Economics from the University of Manchester, UK. He is a Qualified ACCA Accountant and has 11 years financial services experience. During his tenor as an Associate Director as a Corporate Banker within Natural Resources sector, he focused on client and portfolio management. As the former General Manager for the British Chamber of Commerce in South West China, he specialized in local economic development.
In his spare time, he enjoys running trail marathons across China literally exploring off the beaten track in a competitive manner. His highest rank was a bronze medal on a 22km Mountain Sky-Marathon.
What happened in the year 1421?
From 1421 to 1423, during the Ming Dynasty of China under Emperor Zhu Di (朱棣) the fleets of Admiral Zheng He (鄭和), commanded by the Chinese captains, discovered Australia, New Zealand, the Americas, Antarctica, the Northeast Passage; and circumnavigated Greenland.
Due to this endeavour we can conclude that “1421 is the year that the Chinese discover the world”.