China’s “Green” Rush

By GAO JUNZHI

The forestry reform offers great incentives to forest contractors.	The Hinggan Mountains in autumn.	The wooded mountains in Yichun offer many options, such as raising sika deer.

In a 2005 New York Times report titled: “China Is Bright Spot in Dark Report on the World’s Diminishing Forests,” Ms. Mette L. Wilkie, forest officer of the UN Food and Agriculture Organization (FAO), was quoted as saying: “Asia lost about 3,000 square miles of forest a year in the 90s, but gained nearly 4,000 annually since 2000. Almost all of that change has occurred because of China’s new forest policy.” The article concluded that widespread tree planting in China has slowed the rate at which the earth’s forested land is dwindling. So what’s been happening on the ground?

Green Reform in Villages

In China, sizable forests are owned by the state, which exercises its ownership in the form of state-owned forest farms, while small-scale woods and hilly land are owned collectively by local villages. For years, some mountain villages have practiced China’s reform policy by contracting out their woods and hilly land to individual villagers, as a way of encouraging afforestation as well as providing them with a way to make more money. In June 2003, southeast China’s Fujian Province became the country’s first to formalize this practice when it officially launching the forestry operational structure reform. It sanctioned the leasing of previously collectively owned forested lands to individual farmers, and secured their rights through court-issued land tenure certificates. Leasees (contractors) are entitled to own the trees they grow and use the land for a specified term, or they may transfer those rights to another party.

The reform has since spread to other regions around the country. Han Jinlai is one such contractor from Nanweishi Village in Laiwu City, Shandong Province. Pointing towards lush mountain slopes, Han proudly claims, “Since the reform, I have planted over half a million saplings on those slopes. They used to be completely barren.”

Even before the reform had officially kicked in, the former construction tycoon sniffed a bonanza among the wild mountains in his hometown. Since 2001, he has contracted and subcontracted more than 900 hectares of hilly lands, on which he planted 560,000 saplings. Among them are peach, apricot, date, walnut and chestnut “cash trees” that bring in more than RMB 100,000 a year, and an ecological forest that will one day, according to Han’s ambitious plans, form part of a tourism resort. “When the saplings have grown, I am going to build aqueducts, roads, and hotels in this area. The future is really exciting.”

Apart from the land tenure certificate, the local government has also provided Han with subsidies to build his ecological forests, free training and some free seedlings. Forestry is by no means an industry of rapid returns, and Han is grateful for the support he received while he waited for the profits to start rolling in.

The reform of the forest operational structure has ignited zest among local farmers to invest in tree planting. Many people like Han Jinlai are going to the mountains to seek their fortune by turning yellow earth into green woodland.

State Farms Follow Suit

Korean Pine (pinus koraiensis) is one of the world’s more valuable timber species. Some 60 percent of the Korean Pine forests on earth are situated in China, with a large proportion of those in the Lesser Hinggan Mountains in Yichun City in the country’s northeastern Heilongjiang Province. Yichun was born out of the forestry industry. There are 16 state-owned forest farms in the 30,000-square-kilometer city that used to supply the nation’s booming construction industry with timber, including, until recently, Korean Pine. Some years back, reserves of Korean Pine began to dwindle sharply, and its logging has been banned in the city since September 1, 2004. But the ecological-sound move came at a heavy economic cost. As the country’s largest forestry base, Yichun has 300,000 citizens working in its state-owned farms who saw their salary plummet to an average of RMB 310 in the month the ban took effect.

However those working in the industry have another option. In 2003, the Forestry Department of Taoshan Town began to lease out state-owned forested land to individuals. To date, it has contracted almost 10,000 hectares. One of those contractors is Xu Changsi, himself a former employee of the Forestry Department. That year, he took out a 70-year lease on 33 hectares of commercial forests from the Shenshu Forest Farm.

Xu devoted 3 hectares of his land to growing Wuweizi (schisandra chinensis), a plant used in, among other industries, traditional Chinese medicine. He says, “The quality of Wuweizi grown in this region has a world-renowned reputation, and it is exported in large quantities to Southeast Asian nations. Its dried fruit can fetch RMB 60 to 65 per kilogram.”

Wuweizi is also widely used in the food, beverage, brewing, and textile dye industries. The vine-like tree bears its first fruit in the third year of growing, and bears massively from the fourth or fifth year on. Xu and his wife now look forward to the first harvest of their valuable product.

While waiting for the Wuweizi to grow, Mr. Xu has not lain idle. He has also been selling schisandra chinensis saplings that he grows on the hillside. Last year, he sold 50,000 saplings at RMB 0.25 each. Says Xu, “Now that the forests are contracted to individuals, we all have something to strive for. People put their heart and soul into making their own forests a success.” As well as schisandra chinesis, Xu grows other trees such as larch, Chinese spruce, and dioscorea nipponica.

Noting Taoshan’s success, the State Forestry Administration announced on February 21 this year that the entire city of Yichun would try out the reform of its forestry operational structure. Some 80,000 hectares of commercial forests, mostly scattered among farmlands and mountains, were leased to local forest farmers for tenures ranging between 30 and 70 years.

Making the Most of Reforms

Leasing out forested lands to the foresters themselves is gainful in that it establishes the workers duties, rights and interests and thereby galvanizes efficiency. But it has also given rise to problems. For instance, the smaller a forest farm, the greater the business risks and average operation costs, and the harder it is to find investment. Rather than going it alone, many contractors have sought cooperation with recently emerged afforestation companies.

When the forestry operational structure reform commenced in Fujian Province, an elderly farmer named Lai Lanrong from Yong’an’s Mahong Village successfully bid for a lease on 53 hectares of mountain forest. He turned the estate into a shareholding company, selling part of the shares to an afforestation company. The company sees to planning, logging and sales, while Lai himself watches over the woods. It turned out to be a good move – within a year, Lai had recovered all of his original investment and made profits exceeding RMB 100,000.

In another village near Yong’an City, two farmers decided to subcontract their similar-sized forested lands. One found a buyer himself, and transferred the land rights at RMB 700 per mu (1 mu=1/15 hectare). The other sought the services of an afforestation company, which by auction secured RMB 1600 for each mu.

Yong’an City itself is well equipped as a base for the local forestry industry. It has a forestry leasing registration and administration center that handles all related business on sophisticated IT systems. Meanwhile, it also boasts a forestry resources asset evaluation center and a wood and bamboo trade center.

The city’s services boost the efficient use of woodlands and facilitate the diversification of forest products. Proprietors can ease cash flow problems by trading off their lands, and they can also subcontract elements of their land rights, such as logging rights, as fits their needs and interests. Or, like Lai Lanrong, they can establish shareholding enterprises.

Green Is the Way

China has plans to spread the reform of its forestry operational structure nationwide this year as part of the ambitious green goals it is determined to achieve by 2010. These goals include: increasing the country’s forest coverage rate to 20 percent and its forest reserve to 13.2 billion cubic meters; placing 50 percent of the country’s wetlands and 90 percent of its key wild botanic and animal species under effective protection; expanding the production value of the forest industry to RMB 1.2 trillion, the output of commercial timber to 99.8 million cubic meters, the timber yield rate of artificial forests to above 70 percent and the comprehensive usage rate of wood to 70 percent; as well as building a fairly complete forest eco-system and a developed forest industry. To put it plainly, Let the “green” rush begin!