Phase III (2002-2007)
	Home Organization Council Members Council AGM History International Support Task Forces Newsletter Recommendations Secretariat Other Links Contact Us .     This website is created and maintained by CCICED Secretariat Canadian Office locaed at David Lam Centre for International Communication, Simon Fraser University. Part III. Conclusions and Recommendations Xu Jintao and Thomas A. White1 The government introduced the NFPP and LCP to restore natural ecosystems and diminish negative off-site impacts such as flooding, sedimentation of reservoirs, and dust storms. In its second year of operation, the government added to its goals the desire to achieve these environmental objectives in a manner that reduced poverty and contributed to local development. This chapter summarizes the key findings from Task Force analysis of the implementation of the Natural Forest Protection Program (NFPP) and the Land Conversion Program (LCP) and from a set of policy studies conducted in 2002. These findings were summarized and presented to the CCICED as a comprehensive framework for policy improvement and reform at the Council meeting in November 2002. This set of recommendations is intended to assist the Chinese government to improve the performance of the forest sector and achieve its goal of sustainable development while ensuring sustainable livelihoods for millions of forest-dependent people. The conclusions and recommendations are organized into two parts below: (1) those directly pertaining to the NFPP and LCP; and (2) those that pertain to the broader forest sector. The second set covers five policy areas recognized to be most critical to China’s forest development: (1) forest governance and public administration; (2) taxation and fiscal policies; (3) forest tenure and ownership; (4) approaches to regulate forest harvesting and; (5) forestry and trade agreements. Discussion of these five policy areas is preceded by a general review of the issues faced by China in managing the transition in the forest sector from a state-dominated model to one that embraces the private and civil sectors. For each key policy area the framework presents: (1) existing policy issues; (2) policy reforms that can be implemented in the very short-term; and (3) research priorities. REVIEW AND RECOMMENDATIONS ON NFPP AND SLCP Natural Forest Protection Program Task Force studies have found that the NFPP has undoubtedly had a huge environmental impact, although the environmental costs and benefits of the program have not yet been fully evaluated. The logging ban has dramatically reduced timber harvesting in vast areas of natural forest. In general, this reduced pressure can help restore ecosystem health, although environmental benefits would be enhanced in many cases with active management aimed at restoring forest ecosystem health. In the meantime, Task Force studies also found that negative socioeconomic impacts are extensive. Even for state-owned forestry enterprises, which have received the bulk of the compensation provided, crisis-level impacts are occurring in certain cases. It is also important to note that in some areas ethnic communities have been disproportionately affected by the ban – given that they held a majority of the low-paying logging and processing jobs in many state-owned enterprises in Western China. Analysis of NFPP implementation also points to the need for much greater government attention to economic diversification in forest communities. Governments will need to provide stronger support to ease the transition from timber-based economies by providing financial, marketing and other services for emerging enterprises. In addition, at least in the short-term, local governments that were previously highly dependent on the timber economy will need external help with their public finances at a greater level than is currently being provided. Finally, impacts on rural households outside the state sector reveal a devastating picture that draws attention to the fact that these stakeholders have not been included in any substantial way in the compensation scheme. Perhaps most importantly, the logging ban was arbitrarily extended in many areas of the country to collective forests, which since the tenure reforms of the 1980s have become more productive than state-owned forests. Denying these communities the right to benefit from their investments in their forests not only contradicts existing legislation but compounds tenure insecurity and diminishes incentives to invest in forest restoration and management. Identifying the environmental benefits of the NFPP is complicated, and perhaps even more difficult than identifying the social consequences. Unfortunately, there has not yet been a thorough assessment of the ecological costs and benefits of the NFPP. Such an assessment should be prioritized in the near term. Nonetheless, Task Force work did identify a number of issues associated with the purported environmental benefits of the program. To begin, underlying the ban is an assumption that a halt to logging is required in all cases to restore forest health. This assumption contradicts international experience in forest ecosystem restoration, which finds that alternative silvicultural regimes such as selective logging and thinning are often required to restore highly manipulated forests. Unfortunately, the NFPP precludes all logging activities – removing these important silvicultural instruments from the menu of options. In addition, the ban was applied in a “blanket” manner, categorically precluding harvesting in the Yangtze and Yellow River watersheds irrespective of the quality and status of forests and their management. In this manner the ban was applied where it might not have been necessary, where, for example forest enterprises that were demonstrating quality management. Task Force studies also revealed the need to explore ways to reform current state-owned forest enterprises in order to establish a system that encourages sustainable forest management. The NFPP was instituted because of the failure of existing institutions to effectively manage public forests in a manner that sustained yield and protected ecosystem health. Existing experience in state forest enterprises—in alleviating the economic burdens, raising income for enterprises and employees without degrading forest resources, and enhancing efficiency and productivity in forest industries—should be promoted. Experimenting with increasing private sector participation in natural forest management, utilization, and investment should be encouraged. Examples include a household-based forest management responsibility system initiated in Heilongjiang Forest Industry Bureau; the auctioning of forest harvest concessions; and the development of a private processing industry in the state-owned forest regions. These experiments are promising initiatives that demonstrate optional approaches to manage state forests in a sustainable manner. In addition, there is a need to better understand the silvicultural options for sustainable natural forest management. FAO’s proposed code of forest harvesting should be studied and tested in China. Sloping Land Conversion Program As with the NFPP, there is no doubt that the SLCP has had dramatic environmental impacts, although those impacts have not yet been evaluated to determine whether the project is approaching its goal of environmental restoration. Task Force studies have found that environmental gains would be enhanced in many cases with improved targeting to the most environmentally sensitive and degraded sites, and if better, more ecologically appropriate, land use technologies were promoted. For example, international experience has shown that natural forest and grassland regeneration is often much more effective (and less costly) than planting exotic, fast-growing trees. The Task Force also noted that studies have shown that the contribution of engineering infrastructure to stream sedimentation may be as great, or greater than, hillside agriculture, and recommends that the government encourage other sectors, principally the transport sector, to become involved in soil conservation efforts. Like the NFPP, the SLCP has had important social consequences: the payments have increased, at least temporarily, household income, but the social impacts of changing land use have been mixed. There is no evidence that the LCP has directly led to increases in poverty, but there is evidence that food subsidies have distorted local markets and put downward pressure on prices, therefore decreasing incomes for farmers who still rely on crop production. In the short term, many local economies might suffer setbacks due to the downsizing of agriculture and its induced decline of agricultural input supply and agricultural product processing industries. Key issues limiting program effectiveness and efficiency mostly pertain to inadequate design and targeting and the centralized nature of implementation. 1. Funding for implementation is insufficient. Inadequate funding, combined with the stringent requirements on quality and timing, has created an incentive among implementation agencies to provide lower quality seedlings, and has reduced the quality of afforestation work. 2. Task Force studies found that the short-term impact on local economies is negative in many cases, especially in the sectors that provide production inputs and in the sectors that process agricultural products. Regional economies might suffer temporary setbacks due to the agricultural downsizing. Greater subsidies to alleviate this type of hardship should be in place, together with other arrangements, such as microcredit and extension and training programs. 3. Monitoring and evaluation of the impact of SLCP project in representative areas—to make sure the projects meet the objective of ecological improvement (soil and water conservation), poverty alleviation, and economic structure adjustment—should be conducted on a regular basis. If warranted by information from an appropriately designed monitoring and evaluation process, policy adjustments should be implemented. 4. After the conversion of agricultural land into tree crops, tenure issues should be studied carefully in order to ensure the sustainability of project outcomes. 5. Even if the outcome of land conversion is stabilized, there still exists the possibility of— in the case of price increases and food shortages—the clearing of new land in a different location. This has happened in grassland pature areas. When pastureland was closed from grazing, herders tended to shift some of the grazing activities to other locations—for example, from Qinghai to Sichuan. Therefore, implementation of the land conversion program should be conducted in coordination with other programs that aim to generate off-farm employment and restructure rural economies. Recommendations to Improve the NFPP and SLCP NFPP - Remove the ban on logging from all collectively-owned forests, as initiated in Sichuan. - Develop a strategy to drop the logging ban from state-owned forests. This “exit strategy” would also include a forward-looking plan for restructuring public forest administration, the identification of permanent protected areas, and new strategies to conduct sustainable forest management. - In the interim, compensate collective forest holders for losses caused by the ban, and increase the level of compensation to those impacted by the logging ban on state-owned forests. - Conduct a thorough assessment to estimate the environmental costs and benefits of the logging ban, in terms of its effectiveness at restoring forest ecosystem health. SLCP - Develop a strategy to engage other sector agencies in reducing sedimentation from engineering works. - Improve the targeting and implementation of the program—by adopting specific environmental targeting criteria and more market-based mechanisms such as bidding, with the active participation of local officials and representatives of stakeholders. - Develop a “sustainability” strategy to continue the positive benefits of the program following the end of the subsidies. This strategy would include aggressive piloting and advancement of alternative funding sources to support payments for ecosystem services, including a redesigned Ecosystem Compensation Fund, and promotion of new markets and payment schemes for carbon sequestration. RECOMMENDATIONS TO IMPROVE THE FOREST SECTOR POLICY FRAMEWORK Above all, Task Force research on the NFPP and the SLCP revealed significant weaknesses and gaps in the policy framework necessary for sustained protection and production in the forest and grassland economies, and the inability of government subsidies to override those constraints. Tenure insecurity, high tax rates, subsidies that favor state enterprises over private, and a host of government distortions all diminish landholder incentives to restore their forests and grasslands and manage them in a sustainable manner. Poor public forest management is due to a history of incentives to overharvest, not a lack of subsidies. The following recommendations are a synthesis taken from three sources: (1) thematic policy studies commissioned by the Task Force; (2) international experiences presented by international experts that were prepared for the Task Force and its policy workshops; and (3) summaries of group discussions from the policy workshops. Policy Development and Implementation for an Economy in Transition The Chinese economy is in transition toward an increasingly market-oriented system. Chinese society has benefited tremendously from reform through greater economic efficiency, more products, better services, and so on. China’s forest sector, on the other hand, has lagged behind in terms of promoting markets and grass-roots participation. Consequently, the forest sector may miss the opportunity to benefit from increased demand and trade liberalization. Stalled reforms of the forest sector will not only have negative impacts on incomes and enterprise competitiveness, but also eventually lead to greater forest degradation. Achieving the goals of environmental protection and improved rural livelihoods will require urgent attention to those fundamental policy constraints that distort the incentives of both public and private land managers. Looking deeper, Task Force studies reveal a concept of the role of the state centered on redistribution of resources and direct control over land use regardless of ownership. This concept not only contradicts existing law—as it pertains to private and collective landholders—but is out of step with modernization reforms in other sectors of the economy and the stated aspirations of the government. Reform in China’s forest sector has moved the farthest on collective forest tenure change with an iterative process. In the forest resource management system, and in China’s state-owned forest areas, reforms are relatively slow. To establish a sustainable forest sector, there is a need for a coherent policy framework. This framework should avoid any conflict among different forest policies, and should avoid conflicts among policies made for forestry and policies made for other sectors, such as the Law of Grasslands, the Water and Soil Conservation Law, and the Forest Law. Based on international experiences and domestic lessons, there is also an urgent need to coordinate actions among different sectors. There should be some recognition that policy change outside the forest sector might have a bigger impact on forest sector policy. On the other hand, as the forest sector is taking on increasing responsibilities, it should recognize the value of existing experience, lessons, and scientific knowledge accumulated from other relevant sectors. Currently there is no mechanism to systematically and independently learn from the lessons of experience and use them in finetuning policy or implementation. A mechanism (Task Force) that facilitates the exchange of knowledge and coordinates acts among sectors would greatly reduce the chance of failure and shorten learning time. While existing forestry problems call for a systematic reform in China’s forest sector, there is no readily available model in the world that can be directly borrowed. However, learning from international experience is still very important. Studying what already exists and has been tried in forest areas by forest farmers, rural communities, and state-owned forest enterprises is also very important, and is the only way to find direction for future policy reform. Governance and Administration of the Forest Sector Field studies and policy analyses demonstrate the need to rethink the role of the government in governing the sector and to adjust the scope of authority of the State Forestry Administration accordingly. There are basically two categories of issues: those related to reconsidering how the government manages publicly owned forests, and that related to how the government guides, monitors, and encourages private forest owners and forest enterprises to manage sustainably and develop according to national goals. In the first category, the government needs to restructure public forest management and decentralize state-owned enterprises. In the second category, the work of the SFA needs to be re-oriented toward guiding, monitoring, and regulating private actors and away from implementing investment and development programs. A key to success will be devolving functions to the private sector and decentralizing authority to lower levels of government consistent with the need to ensure that national forest management and protection objectives can be ensured. Once the goals and strategies of devolution and decentralization are in place, the government will need to organize a coherent strategy to manage these transitions, balancing the interests of the different sectors of society and the needs of the nation. The transformation of the forest sector’s focus from marketable products such as timber to ecological services should not lead to a bigger forest administration and wider scope of government intervention in forest management. The stated six major programs at SFA will help the forest authority to be more focused and perhaps more effective in achieving its set goal of ecological improvement in the near future, but this newly set focus should not be used to diminish financial resources otherwise available for the private sector. The private market is often more effective and cost-efficient than governments, even in supplying public goods. In many sectors, the bidding and auctioning approach has proved to be effective in ensuring cost efficiency and maintaining high quality. They should be used in the implementation of key forest projects in areas such as afforestation, road construction, and input supply, as well as in harvest concessions. In addition to putting in place a bidding and auctioning system, a wide array of entities should be allowed to participate in the design, implementation, and management of forest project. Rural communities should be given the opportunity and authority to participate in the decisionmaking process. Their property rights over local forests should be secured and enhanced, and their customary rights over local natural resources should be respected. An independent system of monitoring and evaluation should also be a priority in order to reduce management costs and increase the effectiveness of project implementation. Priority Policy Reforms in the Short-Term Establish one or more multisectoral task force(s), with representatives from key constituencies, to lead the process of restructuring public forest management and the role of the government in guiding private actors. This second task will entail harmonizing bureaucratic structures and decentralizing authority in public forest administration. Establish independent systems to monitor and evaluate performance of government and private forest managers at different levels. Set up pilot projects to test institutional innovations in three areas: public forest management, decentralized public administration of private sector forest management, and devolved responsibility from public to private actors. Priorities for Policy Research Identify innovative decentralization and devolution approaches to manage state forests and govern private sector operations. Identify lessons from managing forest sector transitions from other countries. Disseminate national and international lessons to debate across all levels of the policymaking bureaucracy and private sector constituencies. Explore options to increase public awareness of forestry policy options and increase private and civil sector participation in policy design, monitoring, and setting new standards for the forest sector. Devise options to rationalize the public forest estate, appropriately allocating forest to protected areas and collectives, and devising new institutional arrangements to manage the rest for multiple use by public forest agencies. Fiscal Policy and Taxation Unreasonably high taxation is common in China’s forest sector. In China’s collective forest area, tax distortion is even more serious, taking up 40 to70 percent of timber sales. There is no argument that this significantly reduces commercial timber sector’s comparative advantage and places huge disincentives on forest investment, which works against the main goal of the forest sector in China. Large taxes and fees are not without an institutional basis. China maintains heavy regulations over forest resource management and utilization, even in what has been classified as collectively owned forests. On the other hand, forest projects still remain largely government activities. These activities require a large forest administrative force. However, the budget to support this force is far from sufficient. Maintaining this large force requires increasingly higher taxes and charges on timber sales. Taxation reform has to start with institutional reform. To reduce tax and fee distortion, the key issues include downsizing direct government projects and reducing regulatory distortion. As for fiscal policies, the allocation and use of program funding and the performance of forest programs can be improved when objective, independent monitoring and evaluation mechanisms are established. The M&E system should be run by teams outside the implementation agency, and should focus particularly on the social and economic aspects of project implementation. New opportunities, such as the Carbon Trading mechanism, deserve more attention. In the future, participating in carbon trading can potentially earn the Chinese forest sector a tremendous amount of credit, and consequently large financial in-flows. Proper utilization of the mechanism will greatly enhance the forest sector’s financial performance, therefore enhancing the incentives of forest producers for more investment and better management. Priority Policy Reforms in the Short-Term Rationalize taxes, simplifying the system and reducing the uncertainty, yet ensuring that local government costs are adequately financed, accompanied by substantive administrative and regulatory reform. Priority Policy Research Issues Investigate tax disincentives to allow for competitive forest industry investment and development. Study the impact of reduced taxes and deregulation on forest productivity growth and fiscal performance. Study the impact of upcoming international and domestic mechanisms of carbon trading on forest investment, ecological protection, and poverty alleviation. Forest Land Tenure and Ownership Stability, predictability, and consistency in de jure and de facto land tenure, and transparency in its implementation, is critical. Forestland tenure reform has been very active. Land tenure arrangements vary significantly across regions and over time. The success of the land tenure reform also varies. Forestland tenure reform—mainly decentralization of collective forests—was mostly influenced by the Household Production Responsibility System (HPRS), which was adopted by the agricultural sector in the early 1980s. Counterpart reform in the state forest areas, like household-based natural forest management and agricultural land contracting systems inside state forests, has also been attributed to HPRS influence. It is conceivable that future forestland tenure reform will still follow the lead of rural agricultural reform. Active forestland reform contributed greatly to the formation of the current forest landscape. When investment is available, the productivity of afforestation projects is much higher, which explains China’s recent success in plantation development and gives the government confidence in its grand ecological projects. On the other hand, the rapid growth of economic forests such as bamboo forests are also a consequence of increased land use rights by farmers due to tenure reform. What separates the forest sector from other sectors is the importance of tenure security. Tenure insecurity will increase the risk of forest operations, thereby imposing disincentives for rural households and private investors to commit long-term resources in forestland management. China’s experience provides proof for this statement. Although forestland tenure is being constantly decentralized, in many places it is subject to local government interpretation. Existing harvesting regulations and market distortions compound the negative effect. The consequences are that farmers have very little incentive to invest in afforestation and reforestation, especially in projects with ecological importance. Farmers are more inclined to plant economic forest crops, bamboo forests, and cropland, which provide short-term benefits but may not fit the government’s goal of ecological protection. There is a tremendous need for a legal framework for tenure security to avoid administrative intervention in forest use and the violation of tenure arrangements and customary rights, or to deprive use rights (i.e., logging bans). While a logging ban in natural forest is clearly beneficial for the rehabilitation of the depleted natural forest ecosystem, extension of the ban into collective forest areas is not only a violation of collective forest tenure rights, but also a huge blow to the development of forest resources in the collectively owned forestland. In NFPP, property rights of collective forest owners must be respected and protected. The compulsory shutting down of farmers’ production activities in collective forests are in principle against forest law and should be reversed, unless reasonable compensation has been provided. A logging ban in collective forests damages farmers’ and the private sector’s trust in government policy, causing disincentives to invest in forestry. It should therefore be lifted immediately, or a compensation mechanism has to be established immediately. In forest areas with marginal ecological significance, tenure rights should be granted to local communities and rural households from the state sector (state farms, enterprises) for better management and to increase economic conditions in local communities. State forest enterprises are conducting trial experiments in contracting out forest management rights to worker families. Recent observations are that certain experiments create opportunities for workers to generate greater income from managing nontimber forest products. The trials also show promising trends in behavior change in terms of resource use, and provide possible solutions for transforming the state forest industry into an efficient and sustainable sector. These experiences should be closely examined. Priority Policy Reforms in the Short-Term Strengthen property legislation pertaining to collective forests in accordance with the new land contract law, identifying due process for government takings, and procedures for valuation and compensation in cases of eminent domain. Eliminate compulsory land use changes and deregulate controls on private land use, shifting toward a strategy of incentives and payments to ensure the production of publicly valued ecosystem services. Pilot the devolution of forest resource management of state-owned forests, exploring new arrangements such as household-based forest management, management concessions to forest enterprises, auctioning of afforestation projects, and harvesting contracts. Priority Policy Research Issues Investigate and develop best practices of internal property rights systems for collective ownerships. Explore different tenure arrangements for state forests and implications for efficiency, productivity, and resource-use behavior change. Regulation of Forest Harvesting The Chinese government uses harvesting quotas and logging bans to control timber production. The main purpose of these regulations has been to prevent existing forest resources from declining. The expectation is that timber harvest regulation, together with the government’s increasing investment in afforestation, could achieve the goal of stabilizing and expanding China’s forest resources. The harvesting quota system was established in Forest Law 1984, but officially put into practice in 1987. The principle of the system is that the volume of timber harvest can only be set below the volume of timber growth. It is up to the central forestry authority to set the national table of harvesting quotas for all regions and provinces. Provincial-level forestry authorities then redistribute the quota to subordinate regions. Global experiences indicate that harvesting quota systems, or annual allowable cut systems, are implemented where the state and government have property rights. It is more often applied to protected forests under public ownership. Private forest owners should have rights to decide when, how, and how much to cut and utilize their own forests. When the state has a stake in the forests under non-state management, the benefit sharing system should be established. Once private forests are required to provide public services, a reasonable compensation scheme should be in place. Where the logging quota system is enforced, it imposes restrictions on the ability of forest producers to generate maximum economic returns from their operations, thereby damaging producers’ incentives to re-invest in the forests. The consequences include declining quality of existing forests due to inadequate maintenance; conversion of forestland into cropland and other more economically viable land uses;and insufficient private investment in reforestation and afforestation. The implementation of logging bans in China’s state-owned natural forest areas is evidence of the failure of the current yield regulation system, including logging quotas. For the last several decades, a number of countries have adopted logging bans. This global experience indicates that logging bans are relatively ineffective instruments for maintaining, forests, improving forest conservation, or protecting environmental values. They have been shown to have had negative social and economic consequences in China in the absence of alternative strategies for compensation and wood supply. Farmers running private forest operations inside the logging ban areas, and the rural communities living next to state-owned forests, suffer the greatest setbacks in economic terms due to the downsizing of the timber economy. These setbacks encountered by rural communities have been neglected in the compensation policy. In the aftermath of the logging ban, neighboring countries also face tremendous deforestation threats due to China’s increased domestic demand. The Task Force strongly recommends that an exit strategy to replace logging bans with allowable harvests under sustainable forest management regimes is a high priority. While the logging ban provides an opportunity for state-owned forest enterprises to rearrange their operation and employment, it is important to utilize the opportunity to explore new regimes in afforestation, forest management, forest resource harvesting, processing, and marketing. Experiences accumulated in the past, when these enterprises suffered severe economic hardship but managed to survive, should be studied. Institutional innovations in state forest enterprises include decentralized forest management, auctioning of harvesting and afforestation, and development of joint or private processing facilities. These innovations resulted in higher efficiency of forest operations, higher productivity of forest management and use, and higher income for forestry employees. They should be thoroughly studied and promoted. Furthermore, the centralized system of setting AAC for all forest jurisdictions in all of China, regardless of ownership, is an unnecessary intrusion on the rights of private and collective forest owners. International experience provides proven options to promote sustained yield on public and private forests without infringing on private rights. Priority Policy Reforms in the Short-Term Eliminate mandated AAC quotas from collective and private forests, limiting quotas to public forests. Initiate projects in representative forest areas of the country to determine the discrepancy between official forest inventory statistics and reality. Priority Research Issues Investigate modern methods to set harvest levels on public forests, including an analysis of methods used in major forested countries that have a proven record of sustainable forest management. Explore voluntary and regulatory approaches to encourage sustainable forest management on private and collective forests. Approaches used in other countries that merit serious study include FAO’s code of harvesting practices and the voluntary approaches to encourage the adoption of best management practices in some states in the United States. Forestry and Trade Agreements Membership in WTO and APEC has potentially dramatic implications for China’s forestry sector. The most important issue is not the reduction of tariffs, since they are already low and within the required range, but rather the host of rules limiting government authority to subsidize particular sectors. This “second wave“ of trade issues has yet to be assessed as they apply to China, and the government has yet to begin to adjust its forest policies accordingly. One the other hand, the awarness of the Chinese government regarding the global impacts of its forest policy changes has dramatically increased. Priority Research Issues Assess the implications of WTO/APEC trade liberalization on China’s forest industry and existing forest policies. Assess the impacts of China’s policy changes on world markets and resource management. CONCLUSIONS The CCICED is a unique mechanism that is not found anywhere else in the world. It facilitates exchanges among sectors, disciplines, and countries, and provides the Chinese government with timely, objective, and high-quality information to support its decisionmaking in developing Chinese society in a sustainable way. Members of the Task Force on Forests and Grasslands are proud of the opportunity they have been given to contribute to the course of sustainable development of China, particularly Western China. Under the leadership of CCICED secretariat, Co-chairs Professor Shen Guofang and Dr. Uma Lele, the Task Force members worked diligently for over two years. The Task Force has been able to generate timely and objective information to evaluate the social and economic impacts of ongoing government programs and policies, and has provided recommendations to improve the programs’ implementation. Along the way, the Task Force has had several notable achievements in areas such as facilitating dialogue between academia and government agencies, promoting awareness of the importance of independent monitoring and evaluation systems, and suggesting opportunities for improving ecological compensation systems. There remain many opportunities to improve program implementation and policy development. For example, attention should be given to the socioeconomic impacts of government programs and policy change; an independent monitoring and evaluation system should be in place; market instruments should be introduced into more aspects of government program implementation; and a system of secure tenure rights in forests should be a high priority. Improvements in policy design, implementation, and analysis depends on improvements in capacity. Capacity building at all levels of government agencies and research institutions should be given high attention. Building up strong and independent policy research institutions seems to be particularly important currently in China. Footnotes: 1. These conclusions and recommendations are a product of the collective contributions of the Task Force and its Advisors.