Gongpo Tashi, the 63-year-old nephew of the Dalai Lama, is one of the beneficiaries of the scheme, although he is among the wealthier villagers.

He spent 60,000 yuan, including 19,000 yuan of subsidies, building a small house with four rooms in his spacious courtyard with a modern flushing toilet.

But Gongpo Tashi, a stocky Tibetan whose prime job is to maintain the birthplace of his uncle, Tenzin Gyatso, says he is more used to the traditional squat toilet -- usually two planks above a dry trench. "Maybe when I am too old to squat, the flush toilet will be useful."

The new home has few Tibetan flourishes in the design other than a framed Tibetan painting with both the Chinese and Tibetan characters for "tashi delek," a Tibetan greeting, at the bottom.

He says he could have built the house in traditional Tibetan style with carvings and paintings on the wooden pillars, but few artists are still capable of such work.

"It is not so necessary anyway, as Tibetans here have long been living a life not so different from the Han Chinese," he says.

"Tibetan was not even widely spoken at the time when the Dalai Lama was born in 1935," says Gongpo Tashi.

Gongpo, the township official who is not related to the Dalai Lama's family, says Tibetans in Hong'Ai adapted to the Han way of life more than a century ago.

Every ethnic household was consulted for their requirements before the overhaul, says Dong Jie, head of the civil affairs bureau of Ping'An County, who oversaw the project.

The renovation of rural houses is part of the central government's on-going drive to develop the country's relatively poor western regions, which have lagged behind since reform and opening up began in 1978.

In a bid to build an all-round xiaokang (well-off) society, China launched a new round of West Development initiatives in the summer.

In a speech to mark the drive's 10th anniversary in July, Premier Wen Jiabao pledged to prioritize relief and development in a stretch of poverty-stricken areas, including the southern area of the predominantly Uygur-populated Xinjiang Uygur Autonomous Region and the eastern Qinghai-Tibet Plateau.

Wen says the government would double investment in infrastructure and livelihood projects to help improve the quality of life.

According to official statistics, about two-thirds of the 36 million Chinese living below the poverty line come from the western region.