This study provides an estimation of the eco-compensation requirements for forest ecosystem conservation in Hainan province of China using the ecological location quotient (ELQ). It determines that the ecosystem services provided by the forest ecosystem need to be classified into predominant, secondary and potential types. Consequently, the appropriate levels of payment are calculated using the ecological valuation coefficient (EVC) method. The mechanisms and standards of payment are then determined for the corresponding stages in the context of the eco-compensation concept. In this way, guidelines are provided for practising eco-compensation, not only in Hainan province but also in the other parts of China.