THE town that once sheltered Mao Zedong and his Red Army for a decade and calls itself the sacred place of Chinese communism has a new icon: a planned shopping mall.
Tucked among the remote, eroded hills of northern Shaanxi Province, Yanan became the communists' refuge at the end of the Long March in 1937 and the cradle of a movement which eventually brought Mao to power 12 years later.
But since then, communist answers have left this town behind. Mao's white horse may stand stuffed in the local museum. And tourists may flock to see the caves where Mao, Zhou Enlai, and other revolutionaries lived and the buildings where Chinese communism first took shape.
But Yanan remains a backward hinterland in contrast to fast-paced coastal provinces that showcase China's economic reforms. About half of its 300,000 people still live in cave dwellings carved from the mud hills. Many children do not go to school.
Much of the industry is polluting and outmoded. The city gets a comparatively small $2 million annual subsidy from the central government in Beijing.
The provincial government in Xian, a day's drive away, is more interested in developing rich oil, coal, and natural gas reserves north of Yanan than it is in creating jobs for the city. And there is only one flight a week and one train a day from the provincial capital.
Like Chinese communism itself, Yanan and its conservative local leaders remained stuck in the revolutionary past. Now, though, the city has decided it must help itself, and it is struggling to join the mainstream moving toward capitalist ventures. Glitzy mall
The symbol of the new Yanan is a glitzy new shopping mall to be called the Shrine of Asia Economic and Trade Center. Proposed by local businessmen and planned for the center of town, the facility will have two high-rise hotels, a dance hall, and a revolving restaurant on top.
Unable to get grants or loans from cash-strapped Beijing and Xian, the development company plans to raise funds by selling $100 municipal bonds and seeking foreign investors.
The local leadership reticently signed on after an ideological debate over the propriety of building such a monument to capitalism in communism's backyard.
``This area is economically backward and dominated by conservative ideas,'' says Wang Qi, the engineer in charge of the project.
``There is no conflict now because the whole nation is opening up to the outside world,'' he says. ``If Yanan clings to the past and has no opening, gradually, gradually we might be eliminated.''
Opening up to market forces has brought to the surface Yanan's ambivalence toward its communist roots. Many elderly residents nostalgically remember the communist exile from 1937 to 1947 when Mao lived among them and promised the poor farmers hope of freedom from feudal oppression.
But after he left to carry his successful revolution on to Beijing, Mao never returned, a bitter memory for many in Yanan. Last year, Premier Li Peng and other high-level officials visited the city as part of a campaign called ``Send a Little Love to Yanan.''
Local residents say it did little good. Unlike other Chinese towns, cash-strapped Yanan will have only small observations of the centenary of Mao's birth. Empty promises
``Many people think it is a regret Mao never came back,'' says Kou Zhiting, who shows visitors around the caves once inhabited by Mao.
``Li Peng appeared on TV and promised more infrastructure and more investment in education and to raise living standards,'' says businessman Wang Qidong. ``But the central government wrote a bounced check. There were a lot of promises but no money.''
Because of its past, Yanan struggles more than other areas with the changes sweeping China. Sitting in his two-room cave house under a portrait of Mao, Lu Yunfeng, a commissar at the Yanan Party School, admits he has trouble reconciling market-style reform with Marxist doctrine for his young ideologue students.
Enrollment at the school has increased in recent years, although students are more interested in courses in management and stock markets than in party history, he says.
``It's difficult to carry out ideological work today,'' he says. ``But since this is a party school, I uphold the belief in communism.'' Disinterested youth
The disinterest of young Chinese in communism bothers many older residents and even visitors. One woman, a tourist from Guangzhou in southern China visiting the rooms where the central committee once met, described herself as ``an old party member'' but is dismayed with the attitudes of her children.
``Old people still believe in communism and Mao Zedong thought. But young people just want a better life and to make money,'' she says disapprovingly.
But Mr. Wang, the engineer, thinks Mao would feel differently. ``If the project can get started this year, this will be the best birthday present'' for Mao, he says. ``If Mao were alive he would definitely be happy.''