"Guilin has the most beautiful scenery in China, but Yangshuo is even more beautiful," goes the old Chinese saying.

But today, the town a favourite with backpackers and heads of state from around the world is in danger of becoming a victim of its own success.

Around 100 kilometres south of Guilin, in the heart of the Guangxi Zhuang Autonomous Region's limestone pinnacles, Yangshuo has played host to the likes of Francois Mitterrand and Bill Clinton as well as thousands of other less distinguished foreigners who visit each year.

Surrounded by the jagged peaks called karsts that have made the region famous, and resting on the banks of the much-cruised Lijiang River, its success in drawing tourists is no surprise.

As long ago as the mid-1980s, foreign travelers were making a beeline for the town that was, and still is, often recommended as "like Guilin but without the tourist crowds."

All things being relative, the comparison with Guilin is still largely true, but, as growing numbers of domestic and foreign holidaymakers find their way to this "hidden gem," some fear the town is losing the very qualities that made it so attractive in the first place.

Beijing language student John Duce visited in 1994 when he was living in Hong Kong. "Even back then it was already a semi-established backpacker destination, but it was still pretty basic," he said. "It was in the 'Lonely Planet,' there were a few hostels and about four cafes doing banana pancakes, but that was about it."

Today, there is not a building along West Street the main tourist drag that is not a cafe-bar, restaurant, hotel or souvenir shop, and touts pitch hotels to visitors before they have even descended the steps of their coaches.

A Zhang Yimou-directed outdoor spectacular has been playing out across the river almost every night for the past three years, and Yangshuo is joining the handful of small Chinese towns, like Lijiang, that are internationally famous.

Last year, officials of the World Tourism Organization, an agency of the United Nations, visited the town and gave it special recognition as one of China's top tourist sites.

One name that stands out for the frequency of its appearance in foreign guidebooks is Lisa's Cafe, set up by owner Lisa Li at the end of 1985.

Having lived in Yangshuo for 35 years and benefited from the tourist trade at first hand, Li understands better than most how visitors have changed the town.

"When I first came to Yangshuo, I made only 19 yuan (US$2.3) each month working in a government-run grocery store," she said.

"I opened the guesthouse in December 1985, and I remember being overjoyed at making up to 240 yuan (US$30) per month.

"Since then, growth has been constant as we learned how to cater for the foreign market: Chocolate pancakes and exotic pizzas have replaced basic vegetables and dog meat, and more and more people speak English."

Having learnt to cater to foreigners and with exposure in guidebooks such as "Lonely Planet," "Rough Guide," "Let's Go," and the French "Guide du Routard," tourism in the town has snowballed.

In the early days, travelers were mainly backpackers, but there have been increasing numbers of tour groups, both foreign and domestic, taking tours of the area.

Li insists the town remains a firm favorite with budget travelers but is worried tourism could be running out of control and wants to see a limit put on the number of visitors.

"I am concerned that the backpackers, put off by the megaphones and the gaggles of tourists in matching baseball caps who act in ways that Western culture considers antisocial, may start to think twice about coming here.

"A common problem with places that see a rapid tourist boom is that they lose their culture, their soul, and it would be a terrible shame if that were to happen here."

According to the Yangshuo local government, 3.5 million tourists visited the town last year, and officials are optimistic that figure will be topped this year. First-quarter figures have already shown a year-on-year rise.

Tourist money now accounts for 45 percent of the town's gross domestic product, and more than half of all taxes paid to the government are raised from tourist revenue.

As a strategy to promote tourism, the local government is working to develop more tourist sites around the town and improve travel links and services to more easily deal with the growing numbers.

To protect the environment, 17 factories have been closed down, and a litter disposal programme sponsored by the Asian Bank is under way.

The government's efforts to ensure development is sustainable are also receiving guidance from the World Tourism Organization.

As with almost every other town in China, a large proportion of Yangshuo's center is undergoing development and the question of whether this improves the town with more modern, convenient amenities, or robs it of its character, hangs in the balance.

With its 30,000-square-metre, 200-million-yuan (US$25 million) Old Street project, Sunshine 100 is just one of the developers active in the town.

"The old West Street was just a 500-meter-long street," said Feng Zhou at the company's marketing office in the town. "We plan to expand it and change it to a place with a big square and more amenities."

The project also includes 27 villas priced at 500,000 to 3 million yuan (US$62,500-375,000), and apartments in the complex are going for 20,000 yuan (US$2,500) per square metre. Those amounts, Feng admits, put them far beyond most locals.

The impact of the buildings will be limited, he said, because they adhere to government regulations that new buildings match the local style, are not more than 40 meters high and do not damage the environment.

Whatever happens, and whether Yangshuo retains its traditional character, one thing the town cannot easily lose is its amazing situation.

The town's rise is just one of many changes Guangxi's karsts have overseen in their millennia-long history; they were there long before the tourists came and will be there long after they leave.

People in the town who recall its past, and want to safeguard its future, hope Yangshuo's dignity and heritage will be valued above the tourist yuan.

"I remember that in the old days locals would sleep at night with their front doors wide open," Li said.

"Business is good now, people are no longer starving, but I would like to see a balance between the old and the new. We used to sit in our whole family group. My mother would tell us stories; my grandmother would teach us history. Of course I miss the old days, especially given the runaway train of the tourist industry these days.

"I hope it is not too late to save Yangshuo's charm."

(China Daily June 6, 2006)