But the torch relay looks set to be overshadowed by the tense climate in the Tibetan-populated region over recent weeks, prompting fears that the golden opportunity could be ruined by political uncertainty. The unrest in Lhasa in March spilled over into the province's Tibetan-populated areas.

Tourism, a pillar industry in what is one of the poorest mainland provinces, has been hit hard by the unrest.

With the Tibetan-populated region largely cordoned off by a heavy police and military presence, visitor numbers in Tibet and its neighbouring provinces, including Qinghai, have hit a record low.

Although official statistics from Qinghai are unavailable, Tibet has reported a 76 per cent drop in the number of tourists last month.

Each year, hundreds of thousands of tourists stop over in Qinghai before continuing on to Tibet. More than 4.8 million people from other provinces and 50,000 overseas tourists visited Qinghai last year, contributing over 4.7 billion yuan (HK$5.34 billion) to the local economy.

Travel agencies in Xining , the provincial capital, and Golmud, located on one of the key passages between Tibet and the rest of the country, have confirmed a sharp decline in overseas tourists travelling to the Himalayan region.

'We were told right after the March 14 rioting that foreigners were not allowed into Tibetan areas in the province, the top attractions for overseas visitors,' said Sun Mei , who opened an SUV club targeting travellers to the plateau a decade ago.

'So we had to cancel all the scheduled groups in the past weeks and postponed others in the rest of the year indefinitely.'

Cultural and religious sites, especially those related to the Dalai Lama and Tibetan monasteries, which lured the most tourists in recent years, have been sealed off completely since March.

Hongya village, the birthplace of the Dalai Lama, some 50km southeast of Xining, has been closed to tourists since late February due to security concerns.

Xining has managed to draw domestic visitors to the many attractions in and around the city, such as the Kumbum Monastery, Qinghai Lake and China's first nuclear test site. But Golmud, the second largest city in Qinghai and a military outpost near the Tibet border, has almost been deserted by tourists this year.

Taxi drivers in Golmud - famed for its natural resources in the Qaidam basin and the Qinghai-Tibet railway which opened in 2006 - complained that they had been hard hit.

'It should have been the best season for visitors to travel to Tibet. But foreigners have been banned ... and the unstable situation has scared visitors away,' said Peng Shuyi , a Henan native, who moved to the city in early 1990s. 'Golmud has become isolated again.'

The Qinghai government had set ambitious goals for this year, expecting a sharp rise in number of international visitors before and during the Olympics, and a 30 per cent increase in revenue.

However, the authorities still have high hopes for the Olympic torch relay, which is to pass through some of the top attractions, including the Hoh Xil Nature Reserve and the salt lakes.

Bai Ma , chairman of the Qinghai provincial committee of the Chinese People's Political Consultative Conference, said: 'The torch relay is a rare and golden opportunity to present a fresh image of Qinghai.'

Despite poor infrastructure and a stagnant economy, the province boasts blues skies, an untamed wilderness and immense resources, as well as relatively smooth ties among different ethnic groups.

With an average elevation of more than 3,000 metres, the province is named after the country's largest salt lake, Qinghai Lake, which is also known as Kokonor Lake.

The region is the source of three great rivers, the Yangtze, the Yellow and the Lancang (Mekong), and home to many endangered species, including the Tibetan antelope.

Part of Qinghai came under Chinese control in the third century BC, but for centuries was part of the Tibetan world. It is an ethnic melting pot, mixing Han Chinese, Hui Muslims and nomadic herdsmen such as Tibetans, Mongols and Kazaks. It did not become a province of China until 1928.

After Tibet, Qinghai is China's least-populated province with a total of 5.5 million, and the least-developed region on the mainland.

Located on the northeastern part of the Tibetan plateau and dubbed China's Siberia, it was a dumping ground for political exiles and violent criminals for decades, including victims of the Anti-Rightist Campaign and the Cultural Revolution during the Mao Zedong era.

It also has the country's first nuclear base, where China's atomic and hydrogen bombs were successfully developed.

The 'Atomic Town', a nuclear weapons research and development centre located in the remote grasslands near the Qinghai Lake, was built in 1958 and closed in 1987.

It was reopened about a decade ago as a tourist attraction and also serves as a base for patriotic education, with underground labs, reinforced concrete bunkers, factories and houses that were once occupied by 1,500 nuclear weapons researchers. Despite concerns over whether the site has been thoroughly decontaminated, it has become the new seat of the booming county town of Haiyan.

Local officials have put on a brave face, playing down heavy economic losses due to instability.

Mr Bai said religious and ethnic relationships were of top priority, and were particularly sensitive and politically charged topics this year.

At the end of last year, ethnic minorities accounted for about 46 per cent of Qinghai's population, with half of those being Tibetans and 34 per cent Hui Muslims.

'Nothing is trivial when it comes to issues concerning ethnic minorities and religion. We have to deal with them with great prudence to avoid mishaps,' he said in a clear reference to the recent Tibetan unrest.

Despite the violent protests in the Guoluo and Huangnan Tibetan prefectures, he said the overall situation was calm and under control.

He said Qinghai had set a good example over the past few years on how to deal with delicate ethnic problems by promoting common development and leaving more responsibility with local governments to ensure social stability.

He added that preparations for the torch relay were well under way and security had been stepped up to guard against any possible sabotage attempts. 'We have made detailed arrangements along the relay route and we are confident that the torch relay will be a success.'