A county government in the northern province of Shanxi has been forced to suspend a controversial plan to allow private investors managing a famous two-century-old courtyard seen in Chinese director Zhang Yimou's 1990 film, Raise the Red Lantern.

In late December, local officials in Qixian County agreed to let a trio of investment companies establish a tourism development company to manage the Qiao Family Courtyard, a key cultural relic under state protection.

The site was renovated as a folk culture museum in the 1980s and became an important tourist destination. Covering 8,700 square meters, the Qiao courtyard showcases the unique architectural style of residential housing in north China.

The plan set off an outcry, with critics charging that the deal was tantamount to selling off the national heritage. Higher-level officials stepped in and ordered an end to the deal.

"The management rights transfer is illegal as it is against the Law on Protection of Cultural Relics, which forbids the transforming of state-owned cultural relics into enterprise assets," said Ning Lixin, deputy director with the provincial cultural relics protection bureau.

"Usually in China, ticket income is used for cultural relics protection. But it is hard to guarantee that the money will be properly used if cultural relics are managed by an enterprise," he said.

The bureau called off the plan. A task force was formed to investigate the issue and submitted a report to the provincial government, which has yet to respond, said the official.

Dealing with the Qixian county government, the Qixian Yuanda Investment Co., Ltd. on Dec. 20 signed a letter of intent to cooperate with two other investment companies based in Shanghai and Chongqing. The three were to set up a joint venture to take over the management from the government-run museum.

Under the letter, the new company was to invest 200 million yuan (about US$27 million) on courtyard protection and development of local tourism. The company would keep all ticket income during a 20-year period, in return for which it would pay the Qixian county government 10 million yuan in "cultural relics protection fees" per year.

Li Dingfu, head of the county government, said the transfer was intended to "introduce more investment for the building maintenance and to tap the potential of the Qiao Family Courtyard and its neighborhood as tourist attractions".

He also said that the local government wanted to seek World Cultural Heritage designation for the site but would need at least 150 million yuan to bring it up to standard for that purpose.

However, employees of the folk culture museum were opposed to the deal, arguing that the deal was "selling of state property at a cheap price".

The courtyard, which is the former residence of Qiao Zhiyong (1818-1907), one of the earliest and best-known bankers in China, had more than 800,000 visitors in 2007 with ticket income alone exceeding 20 million yuan, according to the museum ticket office.

"The local government spent some 8 million yuan on the operation of the museum and maintenance of the buildings, which can fully be covered by the ticket income," said a museum employee who declined to be identified.

The employee questioned the motivation behind the deal. It is reported that Li Dingfu is the legal representative of the Yuanda firm.

Lu Yu, an expert with the Shanxi provincial cultural development planning and research center, said the dispute between the government and the public over the deal reflects the tension between the protection of cultural relics in China and their development for economic purposes.

"Though we have a general law on cultural relics protection, there is no specific regulation on the operation and financing of cultural relics operators and the government should improve legislation in this field," said Lu.

(Xinhua News Agency January 19, 2008)