1. Introduction to the Project

1.1 Project background

1.1.1 Product introduction

Luotong Mountain is a national AAAA level tourist attraction located in Liuhe County, Jilin Province. It is a well-known cultural relic site and scenic tourist destination, gathering four major resources: historical and cultural landscapes, geological landscapes, ecological landscapes, and religious landscapes. It also has six natural attractions, including an ancient city, secluded caves, forts, strategic cliffs, dense forest, and colorful flowers.

Yijing Grand Canyon is a drifting distribution center in Luotong Mountain, Liuhe County, Jilin Province. The starting point is located in Zili Village, Luotongshan Town, and the ending point is located in a natural village, Luotongshan Town. The starting point is only 2.4 kilometers away from the ancient city of Luotong Mountain, and it is a highly entertaining and exciting raft surfing and drifting experience.

This project relies on the tourism resources of Luotong Mountain and the completed Hengyang Yijing Grand Canyon rafting to build a leisure tourism resort that integrates vacation hotels, health preservation, traditional Chinese medicine health preservation, and RV campsites.

1.1.2 Market prospect

(1) Global tourism market analysis

The COVID-19 not only severely damaged the global tourism industry, but also made the investment in the global tourism industry fall to a new historical low in 2020. In 2020, the number of FDI projects (foreign direct investment) in the global tourism industry decreased to 312, a year-on-year decrease of 59%, while the capital investment in the tourism industry also decreased from 60.9 billion US dollars to 18.2 billion US dollars, a year-on-year decrease of 70%, hitting a historical low.

At the  World Tourism Cities Federation Changsha Xiangshan Tourism Summit 2023 that opened on May 10, 2023, the World Tourism Cities Federation released the World Tourism Economy Trends Report (2023). The report points out that in 2022, the total number of global tourists reached 9.57 billion, and the total global tourism revenue reached 4.6 trillion US dollars, recovering to 66.1% and 79.6% of 2019, respectively. In 2022, the recovery level of domestic tourism worldwide was better than that of international tourism, and the growth rate of the global international tourism revenue was much higher than that of global trade. Developed economies have performed better in tourism recovery than emerging economies.

The first World Tourism Barometer 2024 released by the World Tourism Organization shows that international tourism revenue reached $1.4 trillion in 2023, and the estimated contribution of the tourism industry to the global economy was $3.3 trillion.

From a regional perspective, the tourism industry in the Middle East and Europe has shown the strongest performance. The World Tourism Barometer shows that the number of inbound tourists from the Middle East has increased by 22%, leading the world in growth rate. Europe is the region that receives the most global tourists. In addition, several large source markets also reported strong outbound tourism demand in 2023, many of which exceeded the levels of 2019.

The “tourism confidence index” survey shows that 67% of tourism professionals believe that the outlook for 2024 will be better compared to 2023. The main reasons include that there is still a lot of room for recovery in various parts of Asia, such as visa facilitation and the improvement of air transportation capacity; the  Paris Olympics 2024 and other events will drive achievements in the European tourism industry; the strengthening of the US dollar will support the strong tourism trend driven by American tourists. Among them, China’s latest visa-free entry policy for citizens of France, Germany, Italy and other countries is also seen as an important positive factor that will accelerate the growth of Chinese inbound and outbound tourists in 2024.

(2) Analysis of China’s tourism market

According to the data from the National Bureau of Statistics, the number of domestic tourists in China has steadily increased year by year since 2010, reaching 6.006 billion in 2019, with an average annual compound growth rate of 12.4%. However, with the outbreak of the global COVID-19 pandemic in 2020, the number of domestic tourists will decline significantly from 2020 to 2022. In 2022, the number of domestic tourists reached 2.53 billion, a year-on-year decrease of 22.06% and a decrease of 57.9% compared to 2019.

2023 is a year of strong recovery for the tourism industry, as the suppressed demand for travel for three years is released and tourism gradually becomes a way of life for people, sparking a new wave of national travel. According to the Statistical Bulletin on National Economic and Social Development of the People’s Republic of China in 2023 released by the National Bureau of Statistics, there were 4.89 billion domestic trips in 2023, an increase of 93.3% over the previous year. Among them, urban residents traveled domestically 3.76 billion times, an increase of 94.9%; rural residents traveled domestically 1.13 billion times, an increase of 88.5%. 82.03 million inbound tourists, including 13.78 million foreigners and 68.24 million compatriots from Hong Kong, Macao and Taiwan. There were 100.96 million domestic residents who left the country, including 96.84 million for personal reasons and 77.04 million for travel to Hong Kong, Macao, and Taiwan.

Figure 1 Domestic Tourist Arrivals and Growth in China from 2016 to 2023

In 2023, the domestic tourism revenue (total travel expenses) reached 4.91 trillion yuan, an increase of 2.87 trillion yuan from the previous year, a year-on-year growth of 140.69%, a significant increase, reversing the sluggish situation since 2020. At the same time, compared with 2019 before the pandemic, the domestic tourism revenue in 2023 has recovered to 85.69% of the same period in 2019, significantly narrowing the gap and demonstrating the vitality and potential of domestic tourism consumption. In 2023, the total travel expenses of domestic tourists in China were 4178.1 billion yuan for urban residents, an increase of 147.5%; rural residents spent 735.3 billion yuan on travel, an increase of 106.4%. The total cost of inbound tourists was 53 billion US dollars.

Figure 2 Domestic Tourism Revenue and Growth in China from 2016 to 2023

The development of the cultural and tourism industry is an important part of the construction of national cultural confidence. In recent years, it has received attention from the country and policies such as the 14th Five-Year Plan for Cultural Development and the 14th Five-Year Plan for Tourism Development have been successively issued to promote the integration of culture and tourism, increase the supply of cultural and tourism products, and improve the quality of cultural and tourism products.

In recent years, people have been pursuing more innovative and proactive tourism products, and the simple leisure and sightseeing activities of mountain and water travel have gradually been replaced by diversified tourism methods and projects. New models such as urban strolls, health tourism, ecotourism, industrial tourism, and cultural tourism are gradually developing and growing.

According to the domestic tourism data in 2024 released by the Ministry of Culture and Tourism, based on the results of a sample survey of domestic tourism, the number of domestic tourists in 2024 was 5.615 billion, an increase of 724 million from the same period last year and a year-on-year growth of 14.8%. among them, the number of domestic trips by urban residents reached 4.37 billion, a year-on-year increase of 16.3%; the number of domestic trips by rural residents reached 1.245 billion, a year-on-year increase of 9.9%.

(3) Development status and forecast analysis of tourism in Jilin Province

Jilin Province covers an area of 187400 square kilometers, accounting for 2% of the total national area. Located in the central part of Northeast China, in the heartland of Northeast Asia consisting of Japan, Russia, North Korea, South Korea, Mongolia, and Northeast China. It borders Heilongjiang Province to the north, Liaoning Province to the south, Inner Mongolia to the west, Russia to the east, and North Korea across the Tumen River and Yalu River to the southeast. The location advantages are obvious, and there are good conditions for developing the tourism industry.

Jilin Province has a variety of natural landscape types with high quality, and profound cultural connotations in its cultural landscapes. Compared with similar domestic tourism resources, the tourism resources with comparative advantages include Changbai Mountain forest ecological tourism resources, ice and snow tourism resources, ethnic cultural tourism resources, and border tourism resources.

In recent years, tourism in Jilin Province has entered a fast lane of development, with a comprehensive layout of industries. The “dual-ring line” of east-west tourism and the “dual-industry” structure of ice and snow and summer resort have been basically formed in the province. The transportation and other hardware support required for the development of the tourism industry are increasingly strengthened, and the supply of tourism products is becoming more diversified.

In 2023, Jilin Province received 314 million domestic tourists, a year-on-year increase of 172.8%, returning to 126.5% of the same period in 2019; domestic tourism revenue reached 527.735 billion yuan, a year-on-year increase of 242%, recovering to 107.3% of the same period in 2019. The number of tourists and tourism revenue have reached the best historical level.

The cultural and tourism system in Jilin Province conscientiously implements the work deployment of the Provincial Party Committee, the Provincial Government, and the Ministry of Culture and Tourism, takes multiple measures, and comprehensively stimulates the potential of cultural and tourism consumption. The province has abundant supply of tourism products, and citizens and tourists are actively traveling, leading to explosive growth in the tourism market.

(4) Market analysis of the health and wellness tourism industry

According to the National Health and Wellness Tourism Demonstration Base Standards, health and wellness tourism is defined as the sum of various tourism activities that enable people to achieve a natural and harmonious state of mind, body, and spirit through various means such as beauty and fitness, nutritious diet, mental cultivation, and environmental care.

Practice precedes theory in the development of health tourism in China. In 2002, Sanya, Hainan Province, was the first to introduce health tourism, but its development scale was limited. In 2012, Panzhihua proposed to develop a national “health and wellness tourism” city, and China’s health and wellness tourism market began to develop rapidly. In January, 2016, the National Tourism Administration released the National Health and Wellness Tourism Demonstration Base Standard and clarified the concept of “health and wellness tourism”. Health and wellness tourism was officially included in the country’s economic development strategy. The comprehensive emphasis on health and wellness is one of the important signs of economic and social development, which is the progression from survival to daily life, and the emphasis on food and clothing to quality living. Since the 14th Five-Year Plan, the country has explicitly stated in relevant plans to vigorously promote the construction of health and wellness tourism demonstration bases, leading to a rapid development trend in the industry.

With the development of China’s economy and society, the improvement of people’s living standards, and the increasing demand for health and physical fitness among the population, China will enter an aging society, and the aging problem will become increasingly severe. At present, 70% of the population in China is in a sub healthy state, 21% of the elderly population over 60 years old, 15% of the population in a diseased state, and over 400 million middle-class people pursuing a high-quality life, all of which provide a huge market for health tourism.

According to relevant data and predictions, the size of the health and wellness tourism market has grown from about 40 billion yuan in 2015 to nearly 105 billion yuan in 2023, with an average annual compound growth rate of 13.10%. It is expected that by 2028, the size of China’s health and wellness tourism market will have approached 160 billion yuan.

Figure 3 Scale and Growth Rate of China's Health and Wellness Tourism Market from 2015 to 2023

The Hengyang Yijing Grand Canyon Drifting Project, which has been constructed by Jilin Hengyang Yijing Industrial Co., Ltd., is the only drifting distribution center in Jilin Province that combines white drifting and night drifting. The Luotong Mountain Scenic Tourism Resort is built based on the Hengyang Yijing Grand Canyon Drifting Project in the Luotong Mountain Scenic Area, and has unique tourism resources and excellent location advantages. The beautiful mountain, convenient transportation, rich cultural resources, and developed socio-economic conditions contain enormous potentials for the development of tourism, and are also the key to the long-term development of tourism in Liuhe County. The project has a broad market prospect.

1.1.3 Advantageous conditions of project construction

(1) Policy advantages

In August, 2016, the National Development and Reform Commission and the National Tourism Administration released the National Ecotourism Development Plan (2016-2025), which proposed that by 2025, the overall layout of ecotourism cooperation zones, destinations, routes, and scenic routes will have been basically established, the regional cooperation mechanism will have been more sound, and the cooperation mode will have become increasingly mature. The protection of ecotourism resources, product development, public services, environmental education, community participation, marketing promotion, and technological innovation system will have gradually been improved. Ecotourism will play a comprehensive role in promoting ecological civilization construction, and its international competitiveness will be significantly enhanced, making it a world ecotourism power.

In July, 2024, the Decision of the Central Committee of the Communist Party of China on Further Comprehensively Deepening Reform and Promoting Chinese Path to Modernization adopted by the 3^rd Session of the 20^th Central Committee of the Communist Party of China proposed to focus on building a socialist cultural power and make a comprehensive deployment for deepening the reform of cultural systems and mechanisms.

At the end of 2024, the Central Economic Work Conference proposed to innovate diversified consumption scenarios, expand service consumption, and promote the development of cultural tourism industry.

In November, 2021, the People’s Government of Jilin Province issued the 14th Five-Year Plan for the Development of Culture and Tourism in Jilin Province, proposing the development goals of cultural tourism in Jilin Province. By 2025, the cultural industry will have become increasingly prosperous, the tourism industry will have been comprehensively improved, the ice and snow economy will have broken through innovation, the cultural industry will have accelerated development, cultural soul casting, cultural empowerment, tourism for the people, and the driving role of tourism will have been fully highlighted. Excellent literary and artistic works, excellent cultural products, and high-quality tourism products will fully meet the needs of the people for a better life, and significant achievements will be made in building a strong tourism and ice and snow economy province, laying the foundation for the long-term goal of building a strong cultural province.

In August, 2023, the Department of Culture and Tourism of Jilin Province released the Development Plan for Ecotourism in Jilin Province (2022-2030), proposing that by 2025, the total number of tourists received in the year will have exceeded 100 million, the number of inbound tourists will have exceeded 1 million, the total tourism revenue will have exceeded 200 billion yuan, and the “dual gateways” and “dual green hearts” will have been built. It will initially become a strong province for year-round ecotourism in China and an internationally first-class destination for summer leisure and ice and snow vacation ecotourism.

In October, 2023, Jilin Provincial Party Committee and Jilin Provincial People’s Government issued the Action Plan for Tackling the Trillion-level Tourism in Jilin Province (2023-2025), proposing to reach 720 billion yuan by 2025 and strive to achieve the goal of the trillion-yuan tourism within five years.

In March, 2023, the National Development and Reform Commission agreed to establish a demonstration zone for industrial transfer in southwestern Jilin, focusing on enhancing industrial transfer capacity, optimizing business environment, deepening open cooperation, effectively undertaking domestic and foreign industrial transfer, promoting industrial transformation and upgrading in the process of undertaking, and striving to build the demonstration zone into a characteristic manufacturing base in Northeast China, a green and low-carbon transformation pilot zone, a new highland for regional cooperation and development, and an important agricultural and special product processing base in the country. The demonstration zone covers three cities: Siping, Liaoyuan, and Tonghua.

(2) Resource advantages

Luotong Mountain Scenic Area is located in the northeast of Liuhe County, Jilin Province, about 35 kilometers away from the county seat, with a total area of 94000 acres. The scenic area gathers historical and cultural landscapes represented by the ancient city of Goryeo, geological landscapes represented by cave groups such as the Back Shadow Cave, the Core Cave, the Water Curtain Cave, and the Sky Tunnel, ecological landscapes represented by unique ancient stone elms and wild animal and plant resources, and religious tourism landscapes represented by the Three Pure Palaces of Taoism. Numerous landscape resources are integrated and unique; there are also six natural attractions, including ancient cities, secluded caves, ports, strategic cliffs, dense forest, and magnificent flowers.

The starting point of the Hengyang Yijing Grand Canyon Drifting Project is located in Zili Village, Luotongshan Town, only 2.4 kilometers away from the national 4A scenic spot of Luotongshan Ancient City. The Hengyang Yijing Grand Canyon Drifting Project is separated by a river from Jiangjiadian Township and Xiaoyishan Township in Huinan County to the east, borders Shijiadian Township to the south, is adjacent to Xiangtong Township to the west, and is adjacent to Shengshui Town and Taipingchuan Township to the north. 45 kilometers away from the county town, with a total area of 125.4 square kilometers. The entire journey is 11.7 kilometers, passing through four towns, and the drifting time is about 2 hours. It is a highly entertaining and exciting raft surfing and drifting experience. This project is set against the backdrop of beautiful and diverse natural environments, creating a comprehensive vacation tourism scenic spot with drifting tourism as its main focus. A night drifting themed experience project will be built within the scenic area, which will become the first and only night drifting scenic spot in Northeast China, driving the entire park to achieve leapfrog development. There are existing folk experiences, dining and accommodation, and water parks in the scenic area. The planned projects that match the scenic area include ecological agriculture, forest parks, hot spring vacations, homestays, and conference centers, which can meet the different tourism and vacation needs of people from all walks of life.

(3) Location advantages

Liuhe County has obvious location advantages. Liuhe is closely connected to Jilin Tonghua Land Port Economic Development Zone and Tonghua National Medical New and High-tech Zone, and is an important node county for Jilin Province’s southward opening window. It is 200 kilometers away from Ji’an Zhongchao Port, 330 kilometers away from Dandong Port, and 530 kilometers away from Dalian Port. Direct flights from Tonghua Sanyuanpu Airport to major cities such as Beijing, Shenzhen, Shanghai, and Guangzhou; The Siping-Erdaobaihe high-speed railway has entered the feasibility study and preparation stage; The three highways of Tonghua-Meihekou, Hegang-Dalian, and Huinan-Baishan intersect at Liuhe; Tonghua-Meihekou first-class highway runs through the whole territory. Liuhe has become the starting point of air traffic, the center point of highways, and the junction of land ports in southeastern Jilin Province.

(4) Talent advantages

At present, Tonghua City has 3 national key secondary vocational schools, 3 provincial key secondary vocational schools, and all county-level vocational education centers have passed the provincial key school acceptance and entered the top 100 schools in the province. It is the first region in the province where all county-level vocational education centers have entered the provincial key school list. In recent years, through scientific layout, continuous promotion of vocational education structure adjustment and resource integration, exploration of new paths for diversified education, continuous improvement of modern vocational education network system construction, the local characteristics of vocational education have begun to form, and the ability to serve economic and social development has gradually improved.

Tonghua Municipal Government has signed technology strategic cooperation agreements with research units of provincial universities such as Northeast Normal University, Jilin Agricultural University, Changchun Institute of Chemical Engineering, Chinese Academy of Sciences, and Tonghua Normal University, providing technological support for the development of enterprises. Tonghua City continues to provide assistance to enterprises in talent cultivation and other aspects, vigorously implementing the “Ten Thousand Students Revitalizing Enterprises Plan and Thousand Students Returning Home Plan, and continuously attracting college graduates for enterprises.

1.2 Contents and scale of project construction

The project plans to use a total of 100000 acres of land, including 70000 acres of forest land and 30000 acres of other land.

The newly built resort hotel has a construction area of 35000 square meters, including 500 guest rooms. Its functions include guest rooms, lobby, conference, recreation, catering, administration, kitchen, logistics and equipment rooms, etc; the multifunctional reception hall has a building area of 500 square meters and can accommodate 10000 people per day, including 2000 people for accommodation; there are a total of 100 health villas with a construction area of 20000 square meters; there are a total of 100 small wooden houses with a building area of 4000 square meters; 60 square meters of management room for the beautiful water rural functional zone; 300 square meters of management space for product trading area; the management room of the Chinese herbal medicine garden is 60 square meters, and the medicinal garden covers an area of 1500 square meters; RV camping management room of 60 square meters; 80 square meters of entrance and ticket office; 15000 square meters of parking lot; 17500 square meters of circular road; 8000 square meters of skiing area;  10000 linear meters of high mountain water skiing; 6000 linear meters of cable cars; 200 square meters of water play management center; holographic projection of 6000 linear meters; 12000 meters of wooden boardwalk around the mountain, with 20 finished resting pavilions; the existing asphalt road on the mountain is 3 meters wide and needs to be widened to 6 meters, with a length of 4000 meters.

1.3 Total investment of the project and capital raising

1.3.1 Total investment of the project

The total investment of the project is 1.06 billion yuan, including the construction investment of 1 billion yuan and current funds of 60 million yuan.

1.3.2 Capital raising

Self-raising by the enterprise。

1.4 Financial analysis and social evaluation

1.4.1 Main financial indexes

After the project reaches the production capacity, its annual sales revenue will be 550 million yuan, its profit will be 250 million yuan, its investment payback period will be 6.2 years (after the tax, including the construction period of 2 years) and its return on investment will be 23.6%.

Note: “10 thousand yuan” in the table is in RMB.

1.4.2 Social evaluation

The construction of this project can enhance the vitality of the local economy and is of great significance in promoting the coordinated development of the local social economy. After the completion of the project, it will enrich the regional tourism industry, directly providing reemployment opportunities and a large number of indirect employment opportunities to the society, which is conducive to improving the living standards of local people and has significant social benefits.

1.5 Cooperative way

Sole proprietorship or joint venture

1.6 What to be invested by the foreign party

Funds and others

1.7 Construction site of the project

Liuhe County, Tonghua City

1.8 Progress of the project

The project proposal has been prepared.

2. Introduction to the Partner

2.1 Basic information

Name: Jilin Hengyang Yijing Industrial Co., Ltd.

Address: Zili Village, Luotongshan Town, Liuhe County

2.2 Overview of the Partner

Jilin Hengyang Yijing Industrial Co., Ltd. was established on February 9, 2018, with Wang Xiao as the legal representative and the registered capital of RMB 70 million yuan. The company’s main business includes elderly care services, domestic tourism services, hotel management services, tourism product sales, and landscaping services. The registered address is Zili Village, Luotongshan Town, Liuhe County. It is 2.5 kilometers away from the town government, 45 kilometers away from Liuhe Town, 48 kilometers away from Sanyuanpu Airport, and 5 kilometers away from Yingbai Line Highway, with convenient transportation.

At the beginning of its establishment, guided by the policy of responding to the national call and building a beautiful countryside, the company started to establish the Hengyang Yijing Liuhe Industrial Park in Liuhe County, Tonghua City, Jilin Province. The industrial park takes health tourism as the leading project, cooperates with and makes use of local unique resources to integrate and create eight major industrial sectors, covering health tourism, water sports, ice and snow sports, mineral resources, energy, ecological agriculture, forest industry and Internet technology.

In 2018, the company began the construction of the Hengyang Yijing Health and Wellness Tourism Town Project. The Hengyang Yijing Health and Wellness Tourism Town Project mainly focuses on water conservancy and power generation, canyon drifting, water park, ecological agriculture, hot spring health preservation, winter skiing, B&B tourism, clean energy, etc. The construction site of the project is located on a basalt terrace upstream of the hydropower station reservoir area, with abundant water resources, dense vegetation, beautiful scenery, fresh air, and no industrial pollution sources. It echoes the distant villages and has a strong rural style. As of October, 2020, the Yijing Grand Canyon Drifting Project has been basically completed and successfully tested. By now, Liuhe Hengyang Yijing Health and Wellness Tourism Co., Ltd. has become an important tourism development enterprise in Liuhe County.

2.3 Contact method

2.3.1 Contact method of the Partner

Contact unit: Jilin Hengyang Yijing Industrial Co., Ltd.

Contact person: Wang Zhanyou

Tel: +86-18890217777

E-mail: 15940251164@qq.com

2.3.2 Contact method of the city (prefecture) where the project is located

Contact unit: Tonghua Bureau of Commerce

Contact person: Wang Liangchen

Tel: +86-435-3199017  

   +86-18643036783

E-mail: thsswjtck@126.com