Wuzhen Theatre Festival (1)

WUZHEN, China — On a drizzly afternoon, Liu Hongfei plopped into an empty baby stroller in Wuzhen, a picturesque town in eastern China.

He was wearing dark clothes and red sneakers, his face painted white, a kazoo perched in his mouth.

“Hello?” he rasped, addressing the tourists streaming past. “Is anyone listening?”

People hurried along at the sight of the crazed, ghostlike figure. But as Mr. Liu, an actor, continued his monologue on death, war and women, a crowd of onlookers began to form.

Moments of theatrical absurdity are rare on the streets of China, where public performances are tightly regulated. So Mr. Liu’s monologue was a refreshing moment of authenticity here in Wuzhen, an ancient town known for its charming canals and traditional architecture.

Actors with an amateur troupe from Shanghai waited backstage during a performance of Molière’s “The Learned Ladies” in a renovated building in Wuzhen’s old town. CreditGilles Sabrié for The New York Times

Mr. Liu is a member of the Black Cat Theater Group, which traveled from Beijing for the fourth annual Wuzhen Theater Festival, held here in October. The group of young performers specializes in avant-garde theater.

When Stan Lai, a Taiwanese-American playwright and one of the founders of the theater festival, first visited Wuzhen, he said, it seemed like “one beautiful stage.” But he added: “It lacked spirit. There was no soul.”

Some critics say Wuzhen has a sterile feel. Nonetheless, the town has become a wildly successful example of tourism development in China. Nearly seven million tourists visit every year, in what has been a huge economic boon to the town of about 50,000.

“We are like the engine of an airplane, generating commercial opportunities that help lift up the entire town,” said Chen Xianghong, the chairman of Culture Wuzhen, which sponsors the theater festival.

But as China’s growing number of tourists become more savvy, tourism development is beginning to take a different course. And Wuzhen, whose claim to fame is being the birthplace of the 20th-century novelist Mao Dun, is seeking to be at the forefront of that change.

Banners promoting the Wuzhen Theater Festival. CreditGilles Sabrié for The New York Times

“People no longer want to just take photos and leave,” said Mr. Chen, who is also the president of the Wuzhen Tourism Company, a public-private partnership that oversees the town’s development. “They want to stay in places longer and immerse themselves in the experience.”

He added: “With Wuzhen, we have built a beautiful shell. So now we are trying to fill in the shell with culture.”

Mr. Chen’s approach reflects a widespread understanding of culture in China these days. Here, officials and businesspeople speak of culture more often as a commodity — culture with a capital C — rather than something that grows organically.

To that end, Wuzhen — more than any of the other so-called water towns that dot the area — has muscled its way onto the international cultural map with its annual theater festival. This year, the 10-day festival drew more than 35,000 people.

In the spring, the town also inaugurated the Wuzhen International Contemporary Art Exhibition, which featured a high-profile international advisory committee and presented works by 40 major artists including Damien Hirst, Ai Weiwei and Zhang Dali.

There is also the Mu Xin Art Museum, which opened last year. It is dedicated to the work of the artist and Wuzhen native Mu Xin, who was imprisoned during the Cultural Revolution and later exonerated.

Outside of the cultural and tourism realms, the town is perhaps best known for the Wuzhen World Internet Conference, a gathering of senior government officials and top executives from leading Chinese and Western technology companies. (This year’s conference will be held Nov. 16-18.)

In July, the Wuzhen Tourism Company reached a deal with the internet company Baidu to develop driverless car services, making Wuzhen one of the first places in China to test the technology.

“Wuzhen has a kind of nourishing energy,” said Meng Jinghui, the artistic director of this year’s theater festival. “In terms of content and budget, they have given us complete freedom. That’s very rare in China.”

It helps, Mr. Meng said, that visitors to Wuzhen are limited to one of two designated tourist zones, creating a kind of captive audience. Both tourist zones are run by the Wuzhen Tourism Company, which charges around $15 for entry.

A cafe along the canal system, which was cleaned up as part of efforts to make Wuzhen more attractive to tourists. CreditGilles Sabrié for The New York Times

Inside, an urban utopia thrives. Housed within perfectly rustic traditional buildings are shops carefully curated by the tourism company to ensure a diverse offering of local delicacies and specially crafted wares, like scallion rolls and indigo-dyed textiles.

More than 200 workers keep the stone-paved streets clean. There is no trash on the sidewalks, no laundry out to dry. Just selfie-ready backdrops — flowing green canals, sloping tiled roofs, stone bridges — at every turn.

Two decades ago, Wuzhen was one of many small towns across the country that were being hollowed out by urbanization. After a major fire devastated a large part of the town, Mr. Chen, a Wuzhen native, saw an opportunity to rebuild it as a tourist destination.

There was not much to work with. There were no postcard-worthy mountains or big rivers. But there were canals, built as part of the ancient Grand Canal system, and the town’s decaying traditional architecture. Starting with the eastern section of the town and later moving to the western side, workers restored the old buildings and, in some cases, entirely rebuilt them.

Residents were forced to move. Factories were shut down. Power lines were buried underground. The canals were cleaned up. Parking lots, visitor centers and hotels were built.

Liu Huigen, 67, has worked as a barber on the main pedestrian street of Wuzhen’s western scenic area for 20 years. Because of the tourist zone’s entrance fee, Mr. Liu said, he no longer sees some of his former customers. CreditGilles Sabrié for The New York Times

It was a contentious process that came with human costs. Liu Huigen, for one, was forced to move twice to make way for the development.

“Of course, some people were against it,” said Mr. Liu, 67, a second-generation barber. “But they eventually came around. In the end, we are all just trying to be good citizens.”

Mr. Liu spoke from within the small white-walled shop where he keeps two rusty barber chairs on the main pedestrian street of Wuzhen’s western scenic area. Mr. Liu has worked on this street for 20 years, long before there were any tourists. It looks about the same, he said, though it is cleaner now and more commercialized.

Because of the tourist zone’s entrance fee, Mr. Liu said, he no longer saw some of his former customers. But, as is the case for many of the shop workers here, the increase in tourists has more than made up for that loss.

“Life is better now with the tourists,” said Shen Wenying, 66. Sitting on a wooden stool on a recent afternoon, Ms. Shen plunged her hands into a bucket to extract dead silkworms from their small white cocoons to make silk thread. As she worked, a group of tourists began to gather around to snap photos of what appeared to be a seasoned local craftswoman at work.