How China is Adopting Market Mechanisms to Foster Soil and Water Conservation

Abstract

Soil erosion is a major environmental concern in China; it not only causes significant environmental damage, but also undermines the national economy. In the last half century, a series of soil conservation policies has been employed to combat soil erosion. During the period of the planned economy, government mobilization of a massive labour force to build soil conservation engineering works and plant trees in degraded land was a primary strategy to control soil erosion, while in the present era economic incentives like the Household Contracting Watershed (HCW) scheme have been introduced to encourage farmers to implement soil conservation. The market-oriented economic regime views this approach to be more effective. Nevertheless, an increase in government investment in soil conservation is playing a significant role in areas where soil erosion is most severe. Also in recent years, soil conservation laws and regulations have been introduced to deal with soil erosion generated by massive and rapid urbanization in China. Because of a history of state ownership of land, it is easier in China than in market economies to require farmers to control soil erosion, particularly as they are being given property rights at the same time.