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Occupying 1 million square kilometres, the China Shangri-La Biological Tour Zone will be the world's largest plateau biological travelling area.
The zone is to cover nine prefectures and regions, including Ganzi, Liangshan and Panzhihua in Sichuan; Diqing, Dali, Nujiang and Lijiang in Yunnan; and Changdu and Linzhi in Tibet.
Last month, a specific co-ordination and administration office composed of officials and experts from the two provinces and the autonomous region was set up to oversee the huge project.
"Funds needed for the Shangri-La area will depend on the fiscal investment, money pooled by local enterprises and capital introduction from home and abroad," said Cui Zhiwei, vice-director of the Sichuan Tourism Administration and member of the newly established office.
A large part of the investment will go towards infrastructure construction, especially the public transport system, which has been regarded as the bottleneck problem hindering the development of tourism in the region.
The remaining funds may be used for environmental protection, real estate development and upgrading of various services.
Sichuan and Yunnan have pledged to invest 100 million yuan (US$12.05 million) and 4.93 billion yuan (US$592.7 million), respectively, in the public communication facilities in their own territories.
Insiders say that the co-operation plan aims at taking advantage of the specific strengths of each of the three regions to enhance the comprehensive competitive edge of the tourism site.
Yunnan has rich experience operating tourism sites and is eager to further explore tourism resources in neighbouring areas, while Sichuan and Tibet have abundant tourism resources but are short on capital and lack infrastructure.
However, some experts have cast doubts over the feasibility of the proposed plan, saying the massive scale of the project and decision-making spread among three regions will create problems.
Regarded as a shrine for overseas and domestic travellers, the name Shangri-La was inspired by James Hilton's book "Lost Horizon," which described an earthly paradise. It is located at the juncture of Sichuan, Yunnan and Tibet, according to experts.
For the last four years, the three regions have competed fiercely to claim the official title of Shangri-La.
In 1997, Diqing prefecture in Yunnan invested 3 billion yuan (US$361 million) to build a Shangri-La travelling area and applied to change its name to Shangri-La prefecture.
Last year, the prefecture received over 1 million domestic and overseas visitors who brought in revenue hitting 460 million yuan (US$55.42 million), making up more than half of the prefecture's total gross domestic product (GDP).
At the same time, Sichuan's Daoding and Tibet's Changdu also declared that the real Shangri-La was in their territories.
"Such competition will inevitably affect the image of China's Shangri-La in the international tourism market and hinder the long-term and healthy development of the area," said Deng Wenkui, a researcher with the Research Office of the State Council.
Deng said the transregional co-operation should help improve the image of the tourism haven, but he also aired doubts about whether the co-ordination and administration office would be able to work efficiently and practically on the operation of the project.
Some experts and insiders have suggested setting up a company with clear property rights division in line with market principles to avoid disputes and arguments among the three regions. This may guarantee the transparent fund-raising process and a reasonable benefit distribution mechanism, they said.
