(Yicai Global) June 23 -- The oil industry once accounted for more than 70 percent of the local economy of Yan’an, a city known as China’s ‘revolutionary holy land.’ Tourism and agriculture, notably apples, are now the economic pillars of this municipality in Shaanxi province.

Yan’an was home to the central leadership of the Communist Party of China for more than a decade around the 1930s. In addition to its red label, Yan’an was transformed by the oil industry. China’s first onshore oil well was drilled here in 1907, making the Chinese mainland an oil producer for the first time.

Figures reveal that the oil industry was more than 70 percent of Yan’an’s total economy at the beginning of the 21st century when international oil prices were at their highest, and oil tax made up more than 80 percent of the city’s fiscal revenue. But as it was overly dependent on oil, the economy took a hit after 2014 amid falling global oil prices.

Data show that in the first half of 2015 the gross domestic product of Yan’an fell 2.2 percent annually for the first time since the reform and opening up period, while its fiscal revenue dropped 7.4 percent from a year earlier.

To end its dependence on oil, Yan’an began to build a modern agricultural industry system featuring apples. The total output value of its fresh apples increased 2.3 times from CNY8.6 billion (USD1.33 billion) in 2015 to CNY20 billion (USD3.09 billion) last year. Nearly 1 million of the city’s more than 2.2 million residents are involved in the apple industry.

A complete industry chain has been established around the fruit, from standardized planting to grading and cold storage. The city has also built a fine processing industry covering fruit vinegar and fruit drinks. Even orchard waste -- tree trunks, branches, and bark -- are processed into molded fuel, bricks and organic fertilizer for reuse.

In addition, Yan’an has also boosted its efforts to develop a tourism sector that integrates multiple tourism sectors, including red tourism, the Yellow Emperor culture, natural heritage of the Yellow River and natural green ecology.

Yan’an had an annual growth rate of more than 15 percent in the number of tourists welcomed and revenue from tourism between 2016 and 2019, Ma Dongpo, director of the Yan’an Bureau of Culture and Tourism, told Yicai Global. The city received 73.1 million tourists and had tourism revenue of CNY49.5 billion in 2019 alone.

Though affected by the Covid-19 pandemic last year, the city’s tourism sector has been recovering since the beginning of this year.

Income from tourism is expected to top CNY100 billion (USD15.4 billion) by 2025, with annual visitor numbers surpassing 100 million. The added value of the cultural sector represented by cultural tourism is expected to account for more than 5 percent of Yan’an’s total gross domestic product, per the city’s 14th Five-Year Plan, which covers the years through 2025.

Editor: Peter Thomas