Devolution and Forest Management: 1978 to 1992

Devolution for economic development was the cornerstone of the Reformist Era of 1978 through 1992. Liberalization was favored over regulation as a policy framework. Socialist doctrine was replaced by more pragmatic objectives of economic growth and increased productivity. The elimination of state monopolies and the introduction of increasingly complex markets led to a diversification in resource exploitation and consumption (Wang et  al. 2004).  

Provincial governments were also granted fiscal autonomy for the first time. They now possessed the authority to approve commercial enterprises, and had control over political appointments. China effectively became one of the most decentralized systems of governance globally (de Burgh and Rong 2011). While the well-funded central government was efficient in drafting policy, few accountability mechanisms were in place to ensure effective policy implementation on the local government level (Economy 1997). Environmental Protection Agencies, for example, on the provincial or county levels were answerable to both higher level environmental bureaus and local governments, who provided funding, facilities and opportunities for promotion. The decentralization not only increased the power of local authorities, but also limited the the control of the higher level environmental bureaus over the lower level ones (Lang 2002). 

Environmental policy was first developed towards the end of Mao’s regime, with the establishment of the National Environmental Protection Agency in 1976. In 1978, the Chinese constitution was amended to include a clause on the state’s responsibility towards protection of the environment and natural resources. This formed the constitutional foundation for the country’s environmental administrative framework. The following year, China enacted the Environmental Protection Law for trial implementation based on the amended constitution. 

In 1981, both the Environmental Protection Law and the Forestry Law were debated and ratified. It was not until 1988, however, that the first comprehensive proposal for dealing with China’s environmental challenges was drafted. The Environmental Protection Act was adopted as legislation on December 26, 1989. The policy recommendations went largely unheeded, although the problems of environmental degradation were widely acknowledged (de Burgh and Rong 2011). Perhaps because of this, the ecological value of forests was considered for the first time in policy. Timber production, the primary goal of the Ministry of Forestry throughout the 1980’s, became increasingly replaced by forest management. In 1989, the Standing Committee of the National People’s Congress set up the administrative framework by making the 1979 Environmental Protection Law permanent. This decision strengthened the governmental responsibility and authority over environmental protection (Qu and Li 2009).

As the first official forestry legislation which came into full effect in 1984, the Ministry of Forestry was now endowed with a legal basis to formulate relevant policies. Its mandate was expanded from meeting industrial demands alone, to regulating supply through liberalization and afforestation, expanding commercial investment and achieving poverty reduction goals through agroforestry, which also indicated that forestry management would no longer be the work of foresters alone. Forest tenure was devolved as part of overall agrarian reforms, stumpage fees were introduced for state-forest enterprises and timber was brought into the open market (Liu 2001).

Under the 1984 Forestry law, Chinese forests were classified according to their usage into five categories. This was part of a larger strategy to introduce forestland zoning and multiple use forestry (Wang et al. 2004). The zones included timber production zones, or “timber forests”, forest reserves which include “ecological forests” such as national parks, nature reserves and integrated land-use zones. the integrated land-use zones include “shelter forests” to prevent erosion and “economic forests” for agricultural and medicinal uses. Regulations were stipulated for the funding and management of these categories of forest (Démurger et al. 2009).

The Ministry of Forestry was subsequently restructured in 1986, 1988 and 1993 (S. Wang et al 2004). In 1998, however, following the Yangtze River flood, the Ministry was relegated to a sub-ministerial rank, and enamel the State Forestry Administration, or the SFA. The demotion in rank reflected a reduction in the Ministry’s mandate and authority: from forest management to protection, biodiversity conservation and afforestation. Other changes in China’s forestry policy following the 1998 floods will be discussed in the next section.  

Reforming China’s system of forest ownership and usage rights has been critical to the long term success of its forestry program (G. Wang et al. 2007). While the land of non-state collectivized forests remained collective or state property, usage rights to forests and ownership of trees were restructured (Liu 2001). In 1981, the Central Committee and the State Council diversified agriculture tenure arrangements through the “Decision on Some Issues Concerning Forest Protection and Forestry Development”. The decision aimed to stabilize forest tenure through the issuance of property certificates and the extension of usage rights of non-forested and collective forest lands to rural households (Démurger et al. 2009). Individual households now owned the non-timber and fruit trees around their homestead. Local governments contracted out portions of the existing collective forests to households in the form of responsibility lands, to provide farmers with stronger economic incentives to plant more trees and to invest in the management of existing collective forests (Liu 2001). 

Meanwhile, forestry officials were ordered to increase the size of individual family plots for each household according to family size. 31.3 million hectares of land, which included non-forested wastelands as well as forestlands, were distributed to 57 million households by the end of 1984 (Liu 2001). These additional plots could not be planted with crops, but were required to be afforested in order to meet the household’s fuelwood and timber needs. The trees on the family plots, as well as on freehold forests, were privately owned by the farmers. Non-state forests now comprised nearly 60% of China’s forested land (Liu 2001). 

Essentially, agricultural decision-making over farmland and forestland was returned to contracted farmers under this “household responsibility system”. The system was instituted in order to dismantle the over-sized farmer communes implemented under Mao’s regime, and to counter the absence of personal responsibility incumbent in systems of collective leadership. While the farmers did not own the land, they could now begin to increase agricultural productivity by using their own skills and knowledge, rather than trying to fit their practice into a rigid, top-down, externally managed, grain-first policy. Individual peasant households were thus allowed to control “the planning, management, product use and income distribution from their lands: core components of local forest management” (257, Liu 2001).

The new policy of forest management was meant to encourage the sustainable use of forest resources as long-term investment. However, uncertain about the policy’s tenure, and lacking  the sense of stewardship associated with long-term private ownership, farmers and forest collective units engaged in large-scale illegal deforestation. The extent of the damage marked the Third Great Cutting as one of the worst periods of deforestation in China (Lynch et al. 2011). In regions that were economically poorer or had lower capacities for agricultural production, the deforestation was more extensive (Rozelle et al. 1998). 

China after the reformist era is said to have the most exponential economic disparity in the world, as well as notable disparities in urban and rural socioeconomic indicators (Zackey 2007). Liberalization and devolution brought with it growing economic inequality, corruption in local governments, and a decrease in market prices for agricultural and animal husbandry products. Healthcare and agricultural services, previously free of charge under the communal system, had become more costly and a black market emerged, where peasants could finally obtain a highly liquid and mobile asset for their timber: cash (Zackey 2007).

In response to the massive decline in forest volume, cutting quotas were introduced in 1985 by the Ministry of Forestry, and implemented two years later  (Smil 1993). The quotas essentially limited the extent of farmers’ ownership rights. Farmers were now required to obtain cutting permits in order to harvest, market or even personally consume wood that came from contracted collective forestland and from family plots. Cutting permits were strictly enforced, were non-transferrable and set against county, provincial and national quotas. Illegal cutting resulted in fines, jailing and mandatory replanting. Transport permits were also made mandatory for transferring timber to different markets. Regulation, however, was not strictly enforced (Robertson 1990).

Until 1985, as the sole buyer of timber, the state set timber prices (Démurger 2009). That year, timber markets were opened throughout the southern market as a way to encourage the role of the free market. Two years later, however, all open markets were shut down in order to control the deforestation happening at the time. The forest department and state timber companies were the only organizations authorized to purchase timber products from farmers, and wholesale them onwards. The farmers were offered lower rates than the market prices, and so would often turn to a burgeoning black market (Zackey 2007). 

While such regulations were meant to curb illegal cutting, they resulted in a preference for forestation with “economic trees” that supplied fruits, nuts and medicines rather than with timber stands.  Timber trees matured quickly and offered a return on the initial investment sooner than fruit trees, however tenure over orchards had always been more secure than over timberlands. The potential of private woodlots, therefore, remained untapped (Liu 2001). 

Provinces like Heilongjiang, one of the country’s principal timber producers, still faced fuelwood shortages. Had two thirds of China’s 170 million households set up woodlots on family plots, the aggregate forested area would have been 23 million hectares as opposed to the 5 million actually planted (Smil 2004). The difference would have helped to meet a large need: by the late-1990’s, 56% of the China’s rural fuel requirements still came from biomass: this decreased 47.2% by 2005 (Démurger and Fournier 2007). 

The timber regulations, moreover, applied to the artificial forest plantations owned by farmers, but were not extended to the natural forests under the state’s control, in spite of the marked difference in timber production and the protection needs of each. Timber production hence remained the burden of state-owned forests, where old growth trees were being culled in order to meet the rising demand due to industrialization. Natural forests declined to 30% of the total forest area in China by the mid-1990’s, while timber harvests were at 63 million cubic meters per year: almost three times the average in the 1950’s (Zhang et al. 2000).

The desire to increase forest cover has been the most consistent policy in China’s forestry sector (Wang et al. 2004). China’s forest cover has shown improvement from 1980 to 1993, with the large-scale increase of plantation-style forests. The area of afforested land was increased by 1.5 million hectares annually, reaching 21 million hectares by 1993 (Trac et al. 2007). The increase in forest cover, however, was not commensurate with commercially-harvestable standing wood volume. Nor did it indicate ecological security, as young plantations and and old-growth natural forests were considered equally, in spite of the difference in ecological functions (Rozelle et al. 1998).

Much of the increase in China’s forest cover between 1980 and 1993 was due to the establishment of state forest farms in the sparsely populated north and northeast provinces of the country, although logging regulations also account for some of the increases. By the mid-1980’s, 4,000 state forest farms employed up to 500,000 people as part of an afforestation campaign known as the “Three Norths” or “Great Green Wall” (Rozelle et al. 1998). Initiated by Deng Xiaopeng in 1978, the campaign aimed to afforest 37 million hectares across 5,000 km from Heilongjiang Province to Xinjiang by 2050. A system of agricultural “shelter-belts” was implemented by reforesting large tracts of land to anchor and irrigate loess soil, and help stem the flow of dust storms across China.

The Three Norths Shelterbelt, as well as timber plantations, commercial tree crops and bamboo and rubber plantations—commonly left out of “natural forest” statistics—were included in the reported 1.5 million hectare increase of forest cover. The Chinese Ministry of Forestry used a standard of a 30% canopy cover as a definition of a forest for the surviving saplings. In 1986, forest density was lowered to 20%, which remains the current standard today, thereby increasing China’s forest cover through statistical manipulation (Smil 2000).     

In the early 1990’s, the afforestation structure gave preference to timber forests, followed by ecological forests, and economic forests (Démurger et al. 2009). Over the course of the decade, economic forests and ecological forests began to replace timber forests as the afforestation priority (Démurger et al. 2009). This was due, in part, to land tenure as mentioned earlier, and to a nationwide drive towards a market economy between 1992 and 1998 (Wang et al. 2004). However, the end of the decade saw the sharp increase in ecological forests to 75% of afforestation activity (Démurger et al. 2009), which is discussed in the next section. Timber supply, therefore, had dropped from 34% of afforestation activity in 1997 to 16% in 2004 (Démurger et al. 2009), creating a strain on local timber supplies. 

The major afforestation activities could not offset the unsustainable harvesting of old growth  forest that state logging enterprises were engaged in. The Ministry of Forestry had transferred control of timber production to the 135 state forestry bureaus, now contending with the repercussions of marketization. Depreciating fixed-capital in regulated standing stock and the additional burden of housing, healthcare, and insurance meant that production costs were on the rise, while outdated management systems and underemployment lowered the efficiency. Most bureaus off-set the debt by intensifying logging (Harkness 1998). As a result, the  market remained flooded with stock, further devaluing the price of timber. 

Between 1980 and 1993, three million hectares of old-growth forest were cut and replaced with newly planted, immature forests (Trac et al. 2007). By the early 1990’s, 75% of China’s timber was comprised of young or middle-aged stands. The growing stock ready for harvesting in mature forests was less than 20% of the standing timberland (Trac et al. 2007). Between 1977 and 1995, the harvestable timber in state controlled forests were reduced by nearly 50%; 30 of the 135 state forestry bureaus had nothing left to cut (Harkness 1998). 

State owned primary and secondary forests in Yunnan, western Sichuan and Eastern Tibet, which currently contain 93% of China’s wood value, were marked for logging. Like the northeastern logging companies, the southwestern ones were also short of capital and deeply in debt (Harkness 1998). Strip cutting was the standard sustainable harvesting procedure at the time, in which foresters left passages of timberland untouched to encourage rapid re-seeding. The State Forestry Administration, however, had clear cut up the forests up to the ridges tops, leaving only a few trees for reseeding. This clear cutting led to degradation of watershed areas and increased flooding. Local officials, who should have been acting to conserve forest resources, instead encouraged clear-cutting in order to reap tax revenue, and offset the financial burden presented by nature reserves (Harkness 1998).

During the reform, an expanding commodities industry brought an increasing demand for Chinese timber products: the paper sector, construction and housing, rural energy and furniture sectors emerged as the leading consumers of timber (Démurger et al. 2009). In 2001, China’s per capita consumption of wood at .12 cubic meters, remained one fifth of international averages (Démurger et al. 2009 citing Zhou 2001).  Yet the demand, since 1993, had risen from 145 million cubic meters in 1993 to 247 million cubic meters in 2003 (FAO 2004).

The economic fallout of the high demand included the pervasive shortage of roundwood, sawn wood and paper. With coal still one of China’s primary energy supplies, shortages of softwood for mine pit props constantly delayed coal extraction. Roundwood for railway track ties, replaced every seven years in the north and more frequently in the south, were also short in supply, and soon replaced by concrete. The timber supplies demanded by the construction industry, which grew by 6% yearly in the decade preceding the reform, were also met with shortages (Smil 1984).

In an effort to encourage substitution of wood materials in manufacturing and industries, timber was banned from being used in mines, as an industrial fuel, in large civil infrastructure projects and for household construction. Cutting quotas were reduced in the late 1980’s, although it was not until 1996, over a decade after the annual logging quota system was established, that the Ministry of Forestry reduced it by a major 8%. Timber prices were also adjusted upwards, and stumpage fees were introduced in order to encourage replanting (Robertson 1990). 

Economist Vaclav Smil estimates that by the late 1990’s, ecosystem degradation was equivalent to 10% of the country’s annual GDP (Smil 2004). While it is challenging to ascribe a concrete value to the ecosystem services that forests provide, these functions surpass the value derived from timber as a commodity, as they are vital to human existence. Forests in Western Sichuan, forests along the Amur River in Heilongjiang and those at the headwaters of the Yangtze River lost centuries old trees during the Reform Era. In 1998, many provinces would pay a heavy price for losing critical watershed protection through riverine deforestation.