Six
Reform and Innovation in Forestry

6.1 Innovation in Institution as a Motivating Force

6.2 Science and Technology Innovation for Forestry Development

6.3 Sound Management for Forestry Development

The situation and the tasks are clear now. This means that the orientation for the development of forestry in the new century has been decided. The establishment of the strategy for a great-leap-forward in development and the mode of development brought about by the major programs marks the beginning of historic changes in China's forestry. The significance of these changes is farreaching but the process is difficult and complicated, and may even be painful. The historic transitions in forestry will certainly have a great impact on the old operating mechanism, the management system, the economic structure, the mode of operation, and organization and control, invoking a series of profound social contradictions and conflicts of interests. Apparently, the development of forestry in the new century with ecological development as the main task, cannot proceed smoothly under the framework of the original systems and mechanisms.

It was pointed out emphatically at the Sixteenth National Congress of the CPC: “Innovation sustains the progress of a nation. It is an inexhaustible motive force for the prosperity of a country and the source of the eternal vitality of a political party. Theoretical innovation based on practice precedes social development and changes. Bringing forth new ideas in institution, science and technology, culture and other aspects through theoretical innovation, exploring the way forward in practice, never becoming conceited and never slackening our effort— these are the ways of running the CPC and the State, which we should follow for a long time to come.” The five major transitions are a breakthrough in theoretical innovation in the history of development of China's forestry. To realize these historic transitions smoothly, it is necessary to deepen the reform and persist in bold innovation, so as to provide a powerful guarantee in terms of measures for the promotion of the five major transitions. The changes will be guided to proceed smoothly through innovation in institution, made effective through innovation in science and technology, and efficient management.

6.1 Innovation in Institution as a Motivating Force

Once the enormous potential for development is awakened by innovation in institution, China's forestry will be infused with inexhaustible vitality.

The strategic objective for a great-leap-forward in the development of China's forestry and the development model based on the major programs have both been determined. This is an entirely new road of development. The old economic system and operating mechanism are not compatible with the needs of the new strategy of development in forestry, and some of them have even become obstacles on the road ahead. It was stressed in the resolution of the Fifth Plenary Session of the Fifteenth National Congress of the CPC that institutional innovation should be regarded as the motivating force for the rapid development of the social productive forces. It is essential to be bold in innovation, remove all obstacles impeding the development of the productive forces in forestry, and set up a new structure and a new mechanism suitable for this to ensure the smooth realization of these historic changes in forestry.

6.1.1 Institutional Innovation as a Motivating Source

Over the past twenty-odd years since the initiation of reform and opening up, China's overall national strength has grown by leaps and bounds and the people have, on the whole, become a more well-off society. Facts testify to the tremendous power of institutional innovation. The practice in forestry itself also affirms it. Among the forests, those in places where reform has been intensified (such as the building of economic forests), those with few shackles of the old institutions (such as areas with little or no trees), and those growing in tandem with the new economic structure (such as newly emerging industries, including tourism and forest flora), the development is faster and the benefits are more remarkable. With regard to the development of shelter forests and timber forests in which reform is less intensified and the impact of old institutions are greater, the development is slower and the benefits are less significant, although much effort has been put into the key programs.

Compared with other industries, forestry has some difficulties. Forestry has a long production cycle and any reform cannot produce immediate effects. Moreover, as forestry possesses marked externality, reform will inevitably involve an adjustment of the rights and duties of forestry as well as other sectors of society, as a slight change in one sector will affect the other. Forestry is mainly a public-interest undertaking and at the same time it has the nature of a basic industry. Reform can be quite complicated and the relationships are not straightforward. The structure of ownership and the industrial structure in forested areas are relatively uniform, and the management is relatively extensive and the social burden heavy. All these have contributed considerable difficulties to the reform of forestry. However, relatively speaking, the change in ideas and concepts in the forestry system has been slow and there is a lack of courage for bold moves. There is not enough research into such aspects as the way to persevere in the basic economic system, to vigorously develop non-public forests, and to actively explore ways to realize public-owned forests. The mentality of the sector and the industry is more individualistic in character and does not consider the general good. As a result, it is difficult to move forward. The relationship between forestry and the national economy is not made clear, and there is generally satisfaction with the way funds are circulated within the sector, thus fostering “forestry by forestry.” In terms of the institutions and mechanisms, more consideration is given to the development of forest resources and less attention to the interests of forestry managers. Likewise, more consideration is given to the target of growth of resources and less to increasing the income of the general public, resulting in attention being concentrated on results at the expense of the interests of the people. Moreover, some organizations and their staff are not willing to give up their power of approval and supervision enjoyed under the system of a planned economy.

The old relations of production in forestry in China do not match the needs for the development of new productive forces. The people involved in forestry must open their minds and keep abreast of the times. They must liberate themselves from the bondage of the planned economy system, from antiquated ideas, and from the shackles of outmoded policies on forestry. Priority should be given to adjusting the relations of production in forestry work. A series of major reforms and adjustments must be made in the existing forest management structure, the input mechanism, the strategic layout, the system of property rights, the form of supervision, and the organizational establishment. Furthermore, obstacles of all kinds that impede the development of the productive forces in forestry must be removed, and to add new vigor to the development of forestry, innovations in institution, mechanism, science, and policy must take place.

6.1.1.1 Innovation should embody the general demands of a socialist market economy

Institutional innovation in forestry cannot take place in isolation from the general environment of reform, and cannot separate the general character of forestry from other social industries because of its individual character. Reforms in forestry should be considered in the light of reforms of the economic structure. Institutional innovation in forestry should be conducted in line with public ownership playing a dominant role but with diverse forms of ownership developing side by side. The distribution system should also be modified so that many forms of distribution can exist simultaneously, and the people's living standards can be raised. It is also necessary to consider the essential role of the market in the allocation of resources, accelerate the transformation of governmental functions, and speed up the process of marketing forestry. Overemphasizing the special features of forestry and stressing “macro control” in an attempt to exclude forestry from the process of marketization will be detrimental to progress.

6.1.1.2 Innovation should reflect the special features and law of forestry

Different from agriculture, and even more from industry, forestry has its own special features and law of development. Institutional innovation in forestry should be done in conjunction with the actual practice of forestry itself. Owing to the long production cycle of forestry and the slow recovery of investments, private individuals are not willing to make investments; the ecological benefits brought by forestry to society can hardly realize its values through market exchange; and since the distribution of forestry has the nature of crossing different periods of time—that is, while earlier generations plant trees, posterity will enjoy the benefits—it is difficult for forest producers to consider the interests of later generations as their own. The favorable aspects include the fact that forestry has diversity both in resources and in functions. A saying goes like this: “when it is dark in the east, it is bright in the west.” Through diversified management, risks brought along by market fluctuations may be overcome. Natural forces may play an independent role. If they are used well, it is possible to produce satisfactory benefits from less input. There are vast prospects for the marketing of forest products, and less market risks in forest management. Institutional innovation in forestry is aimed precisely at overcoming the unfavorable aspects in the development of forestry, and giving full attention to the favorable aspects, guiding people to care for the interests of later generations and the society while looking after their own interests, so that forestry may move forward along the track of sustainable development. Today, when historic transitions are taking place in forestry, it is necessary to pursue unswervingly the guiding principle of “giving priority to ecological development” to bring about various reforms in forestry, such as the emancipation and development of productive forces. This will establish an operating mechanism that conforms to the special features of forestry and form the core of institutional innovation in forestry.

The fundamental purpose of institutional innovation in forestry is to establish a system for a socialist market economy, by conscientiously adjusting the relations of production in forestry that do not contribute to the development of productive forces, and any part of the superstructure that does not correspond to the economic base, or develop the productive forces in forestry, and promote a great-leap-forward in the development of forestry. The relationships between reform, development, and stability should be handled sensitively, and all efforts to deepen the reform should be made clear and done well. The suggestion that “it will lead to chaos as soon as it is set free and it will become lifeless as soon as it is put under control” is erroneous and should be dismissed so that a thorough change from the old system in forestry to a new one can be promoted. Institutional innovation in forestry should revolve around this theme of a striding development in line with the spirit of the Sixteenth National Congress of the CPC. The basic economic system with public ownership playing the dominant role and many economic sectors developing side by side will work toward realizing public ownership, and remould the micro base of the forestry economy. It is necessary to keep in mind the reform of the market system and establish an operating mechanism that conforms to both the operating laws of the market economy and the special features of forestry. To further the reform and opening up, it is necessary to extend cooperation and exchanges with foreign countries and establish a forestry mechanism that looks to the outside world and incorporates things of a diverse nature, and interacts both internally and externally. It is important that the allocation of resources must go through the market mechanism and be supplemented by macro control. A macro-control system in forestry must be established so that responsibilities, powers, and interests are of one mind, the communication between the leadership and the rank and file are kept constant, work is handled efficiently, and the whole operation is coordinated.

6.1.2 Establishment of a Microeconomic Base

Currently, the development of economic forests and new forest industries such as forest tourism and forest flowers and plants, is subjected to less intervention and restrictions than previously. It has fairly independent management, and the activities of production and management are full of vitality. However, ecological development and the development of timber forests, which constitute the principal goals of forestry, still lack a dynamic management setup. If this situation is not changed, it will be difficult to promote ecological development and propel the implementation of the six key programs. For this reason, the economic system must include public participation as the main role, with many economic sectors developing side by side. While vigorously building the non-public forests, efforts should be made to explore effective ways to realize public ownership, and boldly introduce an organizational form of forest production that meets with the needs of large-scale socialized production, thus injecting new vitality into the development of forestry, especially in the development of ecological forests.

6.1.2.1 Development of non-public forests

With the advent of the new century, the development of forestry has entered into a new period in which major unprecedented changes are taking place in terms of the situation and tasks, the intensity and extension, as well as the institutional environment and external conditions for development. How can the forestry department fit in with these changes to bring about a breakthrough in forestry development? How can the whole society, particularly the broad masses, be motivated to develop forestry? Which should be the focal and breakthrough point in the development of forestry in future? How can the operating cost of public-owned forests be lowered and better benefits gained? These are urgent questions that need to be addressed, for which no answers have been found.

It had been pointed out clearly in the report of the Fifteenth National Congress of the CPC: “Non-public sectors of the economy are an important component of the socialist market economy in China. It is necessary to continue to encourage and guide non-public sectors, such as individual and private sectors, to develop healthily. This will contribute greatly to satisfying the diversified needs of the people, increasing employment, and promoting the development of the national economy.” The report to the Sixteenth National Congress of the CPC emphasized once again: “We must unswervingly encourage, support, and guide non-public sectors to develop.” This major breakthrough has laid a theoretical foundation for the reform and improvement of the structure of ownership in forestry. In order to push forward forestry development, it is necessary for people to open up their minds, base themselves in the primary stage of socialism, and energetically develop private-owned forestry.

Why should a vigorous development of private-owned forests be taken as the breakthrough point in the structural reform of forestry? It is determined by the special features and present situation of forestry, and the need for its development. Under a socialist market economy, there are many nature-endowed advantages to vigorously develop non-public forests.

1. The opportunity for afforestation and reforestation in China is tremendous. China's forest cover is only 16.55%, and there is a vast area of barren hills and wasteland suitable for afforestation. However, China is in the primary stage of socialism and its economic strength is limited. It has not reached the level where it can “buy forests with money,” like the developed countries. Only by encouraging the people to participate as the principal and most dependable force can China fundamentally solve the question of afforestation and reforestation.

2. In taking ecological improvement as a primary task in the development of forestry, the main battlefield for forestry in China will be shifted from the existing forest regions and those with abundant forests to areas with no or sparse forests. In this way, the land selected for afforestation will be distributed more evenly across the country. Reliance must be placed on the vast number of farmers to plant trees and grow grass.

3. One of the special features in the development of forestry is the dispersive operation. It is difficult for afforestation and manage-ment as well as the protection of forests but is most suitable for individual households to manage.

4. At present, of those forests managed by the State or collectives, the operating costs are quite high while the benefits are relatively low. If the management is contracted to the staff or the general public in an appropriate way, both sides will benefit.

5. There is a natural and inherent link between non-public sectors and the market economy. If the system of a socialist market economy is instituted and socialist forestry with Chinese characteristics is promoted, the non-public sectors, especially private and commercial forests, will become essential factors in developments. Only when the people are involved can there be hope for a speedy development of forestry. The greatest advantage of private-owned and managed forests is that the benefits are immediate, which people can experience and are willing to work for. In other words, this incentive can arouse the enthusiasm of the people more easily. It may be asserted that without the active involvement of the private-owned forests, it is unrealistic to expect a striding development of forestry in the new century. This is determined by the national conditions and the conditions of forestry in China, and is the only way to accelerate development.

In practice, the initial signs of a large-scale development of private and commercial forests can already be seen and have begun to show their unique roles and values. In some southern provinces and autonomous regions, these forests have scored considerable achievements. Maoming City in Guangdong Province, for example, has persevered in the vigorous development of private and economic forests by contracting the management to households. The total area of economic forests in the city has topped 0.26 million hectares and the annual income has reached 6.4 billion yuan, accounting for 39.65% of the total agricultural output of the city. Genzi Town, in Gaozhou City, has obtained a per capita income of 3,420 yuan per year from developing private-owned economic forests. The per capita income of Baiqiao Village of that town has reached over 6,700 yuan, with the highest yearly income of a household reaching 600,000 yuan. The pouring of large amounts of foreign funds into China has injected new life into the forestry sector, especially the development of private forests, and has also provided a new reference framework for the integration of China's forestry. According to some statistics, the forestry sector in Guangdong Province has in recent years introduced foreign funds into a total of ninety-six projects, with foreign investment agreements valued at US$927 million. The development of private forests in Fujian Province has also been rapid in recent years. In 1999, the area of forests developed by individuals accounted for 20.2% of the total area of afforestation; and from January to April 2000, individuals in the province developed 21,670 hectares of forests, accounting for over 30% of the total area of afforestation. It is thus clear that the area of private forests has been increasing from year to year.

The large-scale development of private forests has greatly alleviated some problems in forestry, particularly the question of insufficient investment, and quickened the pace of development. Thus, individual forest households, private-owned forest enterprises, joint-stock forest enterprises and foreign-funded forest enterprises have become an important force in the development of forestry in China.

On the whole, however, the development of private and commercial forests is far from sufficient, and compared with other industries, the gap is still big. Official statistics for the non-public sector of forestry in China are not yet available. Preliminary investigation in seven provinces shows that the area and the growing stock of private forests account for approximately 20% of the total forest resources, and the planting area of private forests accounts for 10–15% of the total area of afforestation in the same year, far from the targeted level. This shows that in the spirit of the Sixth National Congress of the CPC, it is essential to do away with outdated conventions and requirements, and encourage, guide, and support the development of private and collective forests. Particularly in the middle and western regions, in areas with few or no forests and poverty-stricken areas, it is even more necessary to develop private and privately-managed forests. These must be increased as rapidly as possible, and taboos and restrictions abolished. The fundamental task at the primary stage of socialism is to build productive forces and optimize the structure of ownerships. Whichever form of ownership that is suitable for a particular locality should be adopted—that is, wherever state-owned and collective forests are beneficial, that policy should be adopted, but the strategy of developing private forests will be taken wherever that is more suitable. If state-owned and collective forests are not managed well, then a system of private management should be introduced so that they can become public-owned but collective forests. In other words, development is paramount regardless of the type of ownership. Understanding this is crucial for the large-scale development of forestry in the present stage of socialism.

A large-scale development of private and collective forests requires a relaxed external environment. There are various aspects to this relaxed environment, the most important of which are the following.

1. The right of independent management by managers of private and collective forests should be fully respected. They should strive to achieve the “four nos:” namely, no limit on the extent of development, no limit on the speed of development, no limit on the scope of management, and no limit on the scale of management. Finally, these forests must accomplish the “three haves,” namely, have real benefits economically, have status socially, and have honour politically.

2. The separation of “two rights” (the right of ownership and the right of management) should be effected. To stabilize ownership and realize the right of use is the foundation and precondition for developing private-owned and collective forests. The private-owned and collective forests refer to forest trees and not to the ground, that is, excluding forestland. Forest trees grow on forestland, which is therefore the foundation of forest trees. To stimulate the development of private forests, it is imperative, first, to separate the ownership of forestland from the right of management. Private management of public forests also requires the separation of the ownership of public forests from the right of management. This clear separation will form the foundation and precondition for the development of private and collective forests. Otherwise, it will be like water without a source or a tree without roots. The separation of ownership from the right of management is an innovative development based on the household contract. Not only does it not change the basis of household management, but what is more important is that it makes possible for farmers, after acquiring the land-use rights, to transfer, lease, and inherit the right. This is what is meant by spending money to set one's mind at rest. It is only when ownership is stabilized by contracting or leasing the right of using the land to farmers for a specified period of time that property relations is clearly established and become concrete, and the interests become clearer. When there are policy and legal guarantees, farmers can experience a sense of stability in possessing the land for a long time. In this way, farmers will really become the masters of forestland, playing a principal part in injecting investments into forestry and developing it. Only then can they display enthusiasm for the development of forestry and turn their potential into reality. In this sense, reforming the property system, stabilizing ownership, and instituting the right of using land are the keys to the development of forestry. The purpose of reform in forestry is therefore to liberate and develop the productive forces, which requires an open mind to make a great-leap-forward.

3. Government policies should be stabilized and standardized so that taxes can be collected fairly, and to prevent arbitrary charges from being imposed on non-public forests, making it possible for private and collective forests to have real prospects for gain. At present, the taxes and charges on forests are a heavy burden. In Fujian Province, the taxes and charges payable as stipulated in government documents at the provincial and higher levels account for 42% of the selling price of timber, and if other charges are added, it can amount to more than 60%. This will not stimulate but deter the development of forestry. This problem must be addressed. If a great-leap-forward is to be achieved in forestry in China, these prohibitive taxes and charges must be reduced and more positive measures adopted.

4. Protection by the legal system should be intensified. A stable legal system can provide an extremely important environment for making investments. Protecting the lawful rights and interests of investors and giving them a sense of security is fundamental to the development of private and collective forests. In this respect, there are numerous outstanding issues which need to be resolved.

With regard to the status and basic mode of private and collective forests, perhaps it may be conceived in this way: in developing commercial forests in future, the principle of coexistence should be followed among state-owned forests, collective forests, private forests, and collective forests, but priority may be given to private-owned forests and collective forests. That is to say, no ceiling will be imposed for the development of private and collective forests, which will be encouraged to develop as much as possible. If public-owned forests are not managed well, their ownership may be separated from the right of management by turning them into public-owned but collective forests, so that maximum benefits may be realized. Most of the newly planted forests may be turned into private forests. Regardless of whether they are state-owned or collective forestland, the land-use rights may be contracted out, leased, transferred, or allocated gratuitously to individuals for afforestation and greening. The planted forests “will be owned by those who have planted them, and owned jointly by those who have planted them jointly.”

The development of ecological forests for public benefit will in future also follow the same principle—that public ownership will be retained but collective forests will be promoted. Places where forest industries may be developed will be contracted out to individuals for planting forests or for their management and protection. The State or collectives will no longer bear, or will bear only a part of, the expenses for the planting of forests or for their management and protection, in the hope of attaining the objective of both reducing the operating costs and increasing the operational benefits.

6.1.2.2 How to realize public-owned forests

To strengthen public ownership in the economy, it is necessary to increase the controlling power and influence. In some industries, the proportion of public ownership is smaller, but in other industries the proportion is larger. As forestry has a dual nature in that it is a basic industry as well as a public-interest undertaking, the extent of public ownership is certainly greater. The vigorous development of non-public forests is meant to break the conventional practice and give appropriate support and encouragement to enable non-public forests to develop in a competitive environment so that investments will flow into this sector. This does not mean that a negative attitude should be taken toward public-owned forests. Without the large-scale development of public-owned forests, it is impossible to realize the objective of a striding development of forestry. The sound management of public-owned forests is the key to moulding the micro economy, actively exploring effective ways of maximizing the public-owned forests, increasing the vitality of these forests, and promoting sustainable development.

In terms of deepening the reform of state-owned forests, the management of the existing forest enterprises and institutions should be adjusted according to the new guidelines. The units managing ecological forests for public benefit will be classified as productive institutions, while the units managing commercial forests will be categorized as enterprises. In line with the principle of separating enterprises and institutions from the government and appropriately separating the functions of ownership of state assets from the functions of administration, a new type of relationship will be established between the government and the enterprises, between the government and the institutions, and between the government and state assets. An organization for the management of ecological forests for public benefit can be set up in the department responsible for forestry to exercise strict management and supervision of ecological protection for public benefit on behalf of the State. This can be done through means such as exercising owners' and management rights over state-owned assets, examining and adopting proposals for forest management, appointing and dismissing management and financial personnel, and carrying out inspection and supervision. An independent organization will manage the assets of state-owned forests and forest enterprises, and appoint directors to the board of forest enterprises in which it has made investments, in order to exercise the right of making major policy decisions, appoint managers, and receive benefits from assets in proportion to its investment. Forest enterprises can be transformed into limited-liability companies or joint-stock companies, and have the corporate structure of a modern enterprise system. Non-productive institutions will be removed from forest enterprises and productive institutions appointed to alleviate their burden.

With regard to deepening the reform of collective forests, it is necessary to reaffirm the fact that collective ownership means joint possession by members in a collective, who together enjoy due rights. A villagers' committee can, in accordance with the requirements of the Organic Law of the Villagers' Committees of the PRC, manage the forestlands and the assets of forest trees, respect the power of contractors, joint-households, or joint-stock forest farms in carrying out economic activities according to the law, safeguard the two-tiered operational setup that combines centralization and decentralization based on the system of contract management by households, and support and organize villagers to develop various forms of forest cooperatives and other sectors of the economy according to the law. It is necessary to implement the system in which important matters involving the interests of villagers are presented at villagers' meetings for discussion and decision. Matters regarding charges on timber, the distribution and utilization of benefits of collective forests, the contract, auction, and lease of collective forestlands, and other matters related to the possession and utilization of forestland (forest trees) should also be submitted to villagers' congresses for discussion and decision. At the same time, a system to publicize village affairs should be implemented conscientiously, and the distribution of the benefits of collective forests should be considered as part of the public affairs of the village. In classifying forestland, forest resources in village forest farms should generally not be classified as totally ecological forests for public benefit, and the practice of pursuing economic benefits while giving consideration to ecological benefits should be permitted. Those village forest farms that are deemed not suitable for carrying out commercial activities because of their ecological needs should be put under the administration of government institutions with a reasonable number of staff. For the overwhelming majority of village forest farms, it is necessary to further deepen the reform, and give new life to forest management by making institutional changes according to the requirements of joint-venture enterprises, and set up standard structures that can be regulated by corporate bodies, through which shareholders can independently exercise their decision-making powers.

Diverse forms of management may be adopted in public-owned forest enterprises and various systems of accountability and responsibility may be introduced in public-owned forest institutions to bring about a closer link between the interests of the staff and the fruits of their labor, and to raise their efficiency and quality of work. The right of use of state-owned or collective forestlands (forest trees) may be transferred to staff or forest farmers through diverse forms, such as lease, auction, joint-stock system, or joint-stock cooperative system. The policy that “he who has planted forests will own them, and those who have planted forests jointly will own them jointly and the returns will be shared” will be pursued to harmonize the economic relationships between enterprises and staff, and between the collectives and forest farmers in the cultivation and utilization of forest resources, as well as clarify their respective rights and duties, and establish effective restrictive and incentive mechanisms. If conditions permit, the cultivation and protection of forest resources and the development of forest industries should be undertaken as the main activities. It is also important to actively adopt contract, lease, and other forms of agreements to bring about a close link between the economic benefits of the vast number of staff and the increase in productivity of forestland. This will result in forest resources being tied to the productivity of the staff, which will help them to shake off poverty and attain prosperity.

6.1.2.3 Adoption of new managerial and organizational forms

Great efforts should be made to develop the forest joint-stock and shareholding cooperative system. The Sixteenth National Congress of the CPC has recommended: “In-line with the requirements for releasing and developing productive forces, we must uphold and improve the basic economic system, with public ownership playing a dominant role, and diverse forms of ownership developing side by side.” China is at the primary stage of socialism. It is imperative to forge a common strategy where diverse forms of ownership are promoted under different conditions but with public ownership still playing the dominant role. All forms of ownership may and should be used to serve socialism. Furthermore, all managerial and organizational forms that reflect the laws of socialized production may be used. In the development of forestry, it is important to retain multiform, multilevel, and multielement development, with state-run, collective, and individual forests developing together, but stress should be placed on the vigorous development of a joint-venture and shareholding cooperative systems.

Joint-venture enterprises form the foundation of a modern market economy. The reform of state-owned enterprises through implementing the joint-venture system is an effective channel to invigorate the state-owned economy, accelerate the separation of ownership from the management of state-owned assets, give enterprises a principal role in the market so that they can be competitive, establish a sound structure of corporate management, and raise the managerial efficiency of state-owned enterprises. The assets structure of forest enterprises has its own features. The proportion of stock volume and non-managerial assets (used for the development and protection of ecological forests for public benefit) is large while the proportion of the cashable part of stock assets is small and its utilization is subject to certain restrictions. If these factors are not taken into consideration and the so-called “interests of the State” are compromised, it will be difficult to find other means of investments. Even if state-owned enterprises mutually hold each other's shares, it will not improve their vitality. Other ways should be found to encourage joint-venture enterprises. It is proposed that owners of stock assets should enter into joint-venture enterprises as creditors and not as stock-holders. This will ensure the increase of the value of state-owned stock assets, thus encouraging the participation, enthusiasm, and creativity of the principal participants in multielement investment, and help to correctly assess the performance of forest enterprises. Where conditions permit, a thorough analysis may be conducted on the stock assets as a way of making an inventory so that a decision may be made on the appropriate form of investment.

The shareholding cooperative system, with its Chinese characteristics is new to the socialist collective economy. It represents the orientation of development of the rural economy in the 21st century and corresponds to the level of the productive forces in the primary stage of socialism. Bold steps should be taken to ensure constant innovations. In terms of the development of forestry, it is necessary to deepen the reform of the shareholding cooperative system, keep raising funds, optimize the productive forces, bring forth new participants into the market, and make clear the relationships in property rights. To develop forestry by using the shareholding cooperative system, it is necessary, first, to facilitate the establishment of commercial forests, the transformation of products, and the improvement of the market system. Using the shareholding cooperative system may resolve the question of funds, labor, and technologies. At present, farmers are not rich. It is often the case that they are more than willing but lack the resources to carry out changes to the development of forestry. Under such circumstances, the shareholding cooperative system would be a realistic approach. It can not only pool funds together into a large amount but, by linking it with shares and vested interests, it can effectively organize the masses to unite their efforts for the development of a highly efficient system of forestry.

6.1.3 An Operating System for Efficient Management and Coordination

The traditional practice of forestry treats commercial forests and ecological protection of forests for public benefit as a social public-interest undertaking entirely under a highly centralized system of planning and management. The development of both using the same operating mechanism, the same way of management, and the same policies has confused the two kinds of forests with their different economic attributes, the objectives of development of each type, the ways of management, the demands in administration, and the system of compensation for values. As a result, the government's support has been inadequate and its macro control of the protection and development of the ecological environment lacking. On the other hand, the market is not allowed to respond spontaneously to the demands of forest industries, causing the development of forestry to lose its vitality and vigor. To institute changes in forestry there is a need to define the economic nature of each unit in accordance with the type of activities in forest production and management, and adopt different methods of operation and ways of realizing values. In some cases, the principle of “divide and rule” may be adopted, while on the whole, the principle of “combining parts into a whole” may be followed.

6.1.3.1 An operating system for the ecological protection of forests for public benefit

The ecological protection of forests for public benefit must be given top priority in view of its importance and the potential dangers that the discharge of rivers can cause in the valleys or mountain chains. Based on the indexes of the incidence rate of ecological disasters, the extent of disaster damage, and the incapacity of current measures to control disasters, the urgency of the problem can be seen clearly. After a period of development, a fairly complete forest ecological system will take shape, both through the ecological protection of forests for public benefit, and through commercial forests of all kinds, both for ecological and social benefits. The ecological protection of forests for public benefit will be carried out through a combination of dots (urban landscaping, natural conservation areas, and forest parks), surfaces (shelter forests in the valleys of big rivers), stretches (protection forests in key windy and sandy areas, and natural forests in the Tianbao project areas), and belts (farmland forests network and green passageways). In the system of economic operation, the ecological protection of forests for public benefit should be categorized as a public-welfare undertaking and incorporated into the scope of government functions. Thus, it should come under an institutional management system through which the government plans and plays the leading role in macro control. With regard to the principle of the division of powers of office between the central and local governments, an operating system should be put in place for input compensation by which the central and local governments will, mainly through financial means, resolve the question of input compensation through a combination of development funds, state input, and publicly raised social funds. The policy of acting according to local circumstances will be adopted to organize and mobilize the whole society to participate in the development jointly.

6.1.3.2 An operating system for commercial forests

The development of commercial forests should be carried out according to the principle of comparative advantage while taking into consideration the natural conditions, abundance in resources, geographical location, and socio-economic conditions as a whole. This will help to determine the areas that have favorable conditions for the development of different types of commercial forests. After a series of efforts, a number of fund and technology-intensive centers for regional forestry development, or demonstration areas, and other core areas can be developed to form a strong base for linear (along coastal and riverside areas) or circular development in the peripheral areas, thereby forming an integral and comparatively developed system of forestry. Commercial forests should be market-oriented and operate as an enterprise, with a system set up under the macro-control of the State but regulated by the market. The operator must, by financing himself mainly through the market, put into practice an operating system with a market orientation, manage the enterprise and be responsible for gains and losses, although supported by the State and local governments according to the circumstances. In order to inject vitality into the forest industry and encourage the input of funds, labor, and the technologies of diversified ownerships, it must implement an integrated management system with high input and output in order to generate higher benefits, thus ensuring the survival and development of forestry in a competitive market.

6.1.4 Establishment of a Forestry Mechanism that Allows Diversity and Interaction with the Outside World

An obvious characteristic of forestry development at present is that the social and public benefits of forestry have drawn increasing attention from the governments at all levels and a large section of the people. Forestry is playing an increasingly important role and having an impact on world politics, the economy, and social development. There is thus a tendency for speedy expansion as it becomes more internationalized with every passing day. Since the United Nations Conference on Environment and Development in 1992, the international community has set up one after another such organizations as the intergovernmental group for forest problems, forums on forestry based on the Agenda 21, the Rio Declaration on Environment and Development, and the Statement of Principles for the Sustainable Management of Forests, and conducted official talks on a global scale, in order to achieve breakthroughs to the problems confronting forestry so that sustainable forest development can be achieved. In the meantime, the progress in setting up international management standards and quotas for sustainable forest development and the work of certification for forest products by more than 150 countries in the world is forging ahead. The changes taking place in the international community have to different degrees effected direct and indirect impacts on the forestry departments of various countries, and global cooperation in the forest industry is now becoming a reality.

China is a developing country which is now engaged in a modernization drive. Experience has shown that only by persisting in opening to the outside world, making full use of two kinds of resources (both domestic and overseas resources), opening up two markets (domestic and international markets), and mastering two skills (skills for organizing internal development and for developing economic relations with other countries) can it take part in international competition and cooperation, use its comparative advantage and realize its complementarity, and speed up its development and productivity. Particularly at this initial stage of development of its forest industry, China can see a big difference in comparison with other industry sectors in adapting to the needs of reform and development especially in production skills, management experience, capital input, and market development. However, compared with the outside world, it has its advantages. Thus, the task ahead is to pursue ernestly the Central Government's policy of opening to the outside world. China must learn from the experience of the advanced countries in the world which have well-developed forestry sectors so that it can absorb advanced techniques and management experience, and draw in capital for development that is sorely needed. It can also tap overseas markets for its forest industry to further speed up the process of development.

To open up the forest industry to the outside world, China needs to provide service in its national foreign policy as a whole, and to realize the modernization of its forest industry. These two tasks are indispensable and of equal importance. China's admission to the World Trade Organization (WTO) will enhance its efforts in opening up to the outside world and facilitate cooperation in its forest industry. The basic rule of the WTO is to establish a fair, open, uniform, transparent, and efficient market, which is globally integrated in order to promote the reasonable distribution of resources throughout the world. This will bring about both opportunities and challenges for China. The opportunities for the country include relieving the pressures from domestic forest resources, giving incentives for the preservation of natural forests and ecological development through afforestation projects by turning reclaimed farmland to forest, helping to promote structural adjustments in the forest industry, and raising the international competitiveness of various industries, such as the timber market, the forest products, flowers, forest tourism, and so forth.

The new situation has provided China with an opportunity for further opening up and expanding cooperation in its forest industry with the outside world but it poses a severe challenge too. The next step for China is to firmly pursue this new trend in the development of its forest industry in-line with world standards. With China's entry into the WTO, it will have to develop an open economy, enlarge its commodity products and services trade, optimize its import and export structure, persevere in and improve the policy of using foreign capital, and strengthen the competitiveness of its forest industry in the world by raising its efficiency. It is also necessary to develop bilateral trade, strengthen “the multilateral,” stabilize “the peripheral,” and tap “the trade among the common people,” and actively promote all-round development of the forest industry. With regard to the channels for cooperation, China must persist in both official and civilian ways but at the same time giving flexibility to the common people. As for the choice of partners for cooperation, attention must be paid to central planning with due consideration for all concerned, with the aim of learning the methods and techniques and attracting capital from the western developed countries, as well as exporting talents and scientific results and obtaining resources especially from the neighboring countries and other developing countries. With regard to the form of cooperation, diversified ways and flexible methods must be adopted so that China can maximize its advantages while avoiding shortcomings. This will help to further improve foreign exchange and cooperation in a multichannel and diversified way.

In its new position as a member of the WTO, efforts must be made to influence changes in the government's functions in order to provide an environment favorable for opening the country to the outside world, and expanding cooperation and exchanges with foreign countries. In the 492 pages of the twenty-three WTO agreements, only two articles and clauses are related to enterprises, while the rest concern various requirements of the government. After its entry into the WTO, the main body that will honor the commitments is the government, and it must therefore change its work pattern as an approval administration to set up an efficient market mechanism. In other words, after China's entry into the WTO, the government's function must shift from the micro management of the economy to paying attention to the macro-control over regulations, thereby gradually focusing its attention on other important sectors in the national economy and people's livelihood, such as agriculture, geological protection, infrastructure development, and so on. This requires attention to be paid to the following three aspects. The first is to comply with the new situation, and make an earnest change of the government's function to enable it to exercise macro-control over the forest industry, strengthen the governance of forests according to the law, and administer the forest industry in a systematized, legalized, standardized, and programmed way. Second, there must be maximum reduction of direct control over forest industry enterprises, with only indirect administration by a collective management. The third aspect is to take an active part in international multilateral cooperation. While involving itself in important activities such as multilateral consultation on international forest issues and the liberalization of trade in forest products with APEC (Asia-Pacific Economic Cooperation) countries, which have a great influence on China's forest industry, it is important to reconsider its forest industry in the light of its entry into the WTO, especially the challenges facing the industry. Taking part in intergovernmental talks at international forest conventions and studying the influence and benefits and losses brought about by the regional liberalization of trade in forest products will help China to map out the game-rules for the globalization of the forest industry. This will also enable it to work out a standard and quota system suitable for the sustainable development of the forest industry, as well as formulate a relevant policy for forest-products trade that will help to maintain the fundamental benefits of the State.

Financing the industry through various channels and at multilevels will further broaden the scope of foreign capital. To develop the forest industry through the six key program to realize striding development requires inputs in many aspects, including more efforts and large amounts of capital. Therefore, investments should be gathered from many channels, and in many ways and levels instead of making use of state capital, through allotment of funds and loans. Under the new situation, the use of both foreign and state capital will result in an adjustment of the economic structure, and help to optimize and modernize the industry and raise the economic benefits of enterprises. With the setting-up and improvement of a socialist market system and the strengthening of international competitiveness of forestry trades, the prospects for exporting their products and developing a foreign-orientated economy will be enhanced. Moreover, at this present time when free aid from the developed countries and most international organizations is declining, China must try its best to obtain free international aid by grasping the opportune moment to combine its ecological projects with forest development, especially when the international community and the developed countries are paying greater attention to environmental and forest issues. At the same time, it is beneficial to actively tap into channels for obtaining preferential low-rate loans from the governments of developed countries to push ahead joint-venture cooperation. In view of the actual needs for the development of commercial forests and the industrialization of the forest industry, the foreign affairs departments at various government levels can play a bridging role in obtaining loans from foreign governments to set up businesses and allow enterprises to overcome their shortage of funds for development.

China should also make full use of the pioneering role of scientific and technological cooperation to modernize the forest industry. International cooperation within the forest industry must be established on the basis of science and technology, with a market orientation and using trade to achieve economic benefits through integrating science, the economy, and trade into an integral whole. However, stress should be laid on the issue of the ecological environment, using this as a pathbreaking strategy for development in the western part of the country through the development of afforestation projects. The further promotion of scientific innovations in China's forest industry will also help to provide strong support and guarantee for the development of the forest industry and at the same time broaden its space for development in the new millennium.

6.1.5 Establishment of a Macro-management System

A macro-management system for forestry needs to be set up to cater to a socialist market economy and to the specific requirements of the special features of the forest industry—a management system that is conducive for revitalizing the forest industry. It should be noted that a transition is being made from an industry catering to timber production to one that targets ecological development. Therefore, a change must be made to the government's functions, to enforce the management of forests according to the law and strengthen its macro-control over policies and forest resources in general.

6.1.5.1 Transformation of government functions

Owing to the change in emphasis from timber production to the development of forests for ecological purposes and for social benefit, the government plays an extremely important role as it is the leader, the organizer, and primary investor in this task. At the same time, development is being carried out in the environment of a socialist market economy. Therefore, it is crucial to make an adjustment of the government's functions according to the requirements of a market economy, that is, to establish a management system which is suitable for the specific needs of the forest industry in a new environment.

1. The main attention should be shifted from timber production to the improvement of the ecological environment. As ecological development is an undertaking that benefits society, a worthy cause in relation to national ecological security and the development of the Chinese nation for future generations, it is a great responsibility for the government to strengthen its leadership in and support for ecological development. In the environment of a market economy, the most important point for the government to understand is that ecological development should be carefully and efficiently planned and organized, and correct policies formulated. It must work out a plan according to the needs, one which is practical for ecological development. It must also needs determine the goals for ecological development by defining the necessary tasks and the order in which they should be done, according to their urgency. It also needs to mobilize and organize the social forces to take part in ecological development but at the same time fully respecting the choice of the broad masses. As for formulating the right policies, it must study and draw up effective measures to promote ecological development and make greater efforts to increase the input for forest development for social benefit, so that a steady and long-term development of forests can be ensured. It must also give full consideration to the political and economic advantages inherent in a socialist system by pooling together all efforts to handle important matters, such as financial, material, and human resource areas, in order to revitalize the overall situation. At present, it is important to make clear the division of work between the central and local governments, in which the central government will take charge of the national nature reserves, the big rivers and lakes, the ecological development of trans-provincial areas and other projects related to these functions, as well as to give aid and assistance to the poor provinces (autonomous regions) in ecological development. The local governments, on the other hand, will be responsible for forest development for social benefit in their own localities and to carry out the necessary tasks for the development of some key forest projects between the trans-provincial areas.

2. The government needs to provide a conducive external environment for the development of the forestry industry. In a market economy, it mainly depends on the market to push ahead the development. The government must therefore give up its role of an organizer and director of production and, instead, assume macro-control over such areas as the economic environment, trade policies, and interest rates for credits and loans so as to provide and create external conditions necessary for development to proceed. To facilitate macro-control, national and regional plans need to be worked out for the development of the forest industry, making clear which major sector should be developed during a certain period. The governemnt must also provide encouragement and support, and make forecasts for a long-term market for major forest products and lead the industry toward healthy development. Macro-control also includes pushing ahead the organizational reform of the forest industry in China, gradually transferring the management of the state-owned forests, as well as those forests managed by collectives to enterprises or institutions. The low participation rate of the private sector in the forest industry must be addressed by reducing various taxations and levies to create an environment that is more favorable for investment.

3. Science and technology must be given emphasis by the government. Since science and technology plays an important role in production, the government must adopt science and technology as key factors in the development of major forest projects, and map out plans to further develop science and technology for the forestry sector. This will bring about good yields, techniques and talents, and benefits—in other words, a harmoniously operating mechanism. Thus, increase in inputs for basic research for the forest industry must be made so that the application of science and technology will invigorate the industry. More efforts are needed to develop human resources and to promote advanced and practical methods for the forest industry, and bring about a closer relation between science and technology and forestry production.

6.1.5.2 Raising the level of administration

The management of forests according to the law constitutes part of the national strategy in governing the country according to the law. It is an important aspect in the development of a legalized State. It is necessary to enforce the management of forests according to the law so that the results in forest development can be assessed. Ever since the introduction of the policy for reform and opening up of the country, the State has reviewed and revised one after another the following regulations and laws: the Forest Law of the PRC, the Decision by the Central Committee of the CPC and the State Council on a Number of Issues on Forest Protection and Development of Forestry, the Resolution on the National Voluntary Tree-planting Campaign, the Law of the PRC on the Protection of Wildlife, and the Law of the PRC on Desert Prevention and Transformation. It has also issued more than ten forestry administrative regulations to supplement the Forest Law of the PRC and the Law of the PRC on the Protection of Wildlife. It has also formulated and issued more than fifty department rules, and over 300 local decrees and local government regulations, all of which have played an important part in promoting forestry development in China. While there have been some achievements, it should be noted that since some of the laws and regulations were formulated and issued when the transformation of the economic system had not been completed, and the strategy for forestry development had not been changed, they have been unable to meet the requirements of the market economy. Therefore, the legal system for the forest industry in China needs to be improved as soon as possible to comply with the socialist market economy. From a short-term point of view, the first task is to speed up the process of forestry legislation—that is, to formulate concrete and suitable amendments and additions to the Forest Law of the PRC, the Law of the PRC on the Protection of Wildlife, the Law of the PRC on Desert Prevention and Transformation, and the Regulations on the Protection of Forest Plants, which had not been clearly defined or explained. The second task is to clarify, revise, or revoke those forest laws, rules, and regulations that are outdated. Those parts which are not compatible with the basic rules set by the WTO and the socialist market economy, or run counter to the law should be revoked while those that need revision must be modified as soon as possible. The third task is to improve the quality of forestry legislation. As a guiding principle of legislation, the concept of rewards and penalties must be implemented in a standardized way, that is, there should not only be punishment for crimes, but the legal rights and benefits of those engaged in forest management should also be protected.

The implementation of the law is a great responsibility for the forestry administrative departments at all levels. The function of law enforcement and supervision by forestry departments must be greatly strengthened, changing their role of an “athlete” to that of a “referee,” by using all means for checking, supervision, circulation of information, and imposing rewards and penalties, as well as warnings to create awareness. They must also improve the method of work, have a good understanding of macro-control, and draw up an overall plan for forestry development. All detailed work should be left to the lower levels of the administration, and the attitude of passive defense should be changed to one of positive offence, from “defendant” to “plaintiff.” Instead of punishing severely those who violate the law, a strict check should be imposed from within, and all violations should be exposed and dealt with in a strictly unbiased way, imposing punishment without leniency, when necessary. The task of supervision should be the responsibility of certain departments, units, and civilians, and those who do not carry out their responsibilities must be strictly dealt with according to the law. There must be punishment for crimes committed so that the rights and benefits of those engaged in forest management can be protected. The supervision over the enforcement of forest laws must be supported fully by the National People's Congress, the people, and the media so that the forest management can ensure that forest laws and regulations are carried out fairly and objectively. A team must also be formed for the enforcement of forest laws. The personnel involved must be trained and upgraded in their political and business skills so that a reputable image of these enforcers may be formed.

6.2 Science and Technology Innovation for Forestry Development

The new millennium has ushered in a new generation for which knowledge is the key to progress and technical innovations and new techniques are driving forward development at an unprecedented pace. Advanced knowledge and techniques are becoming the real capital and wealth for growth. Any country which succeeds in pushing ahead its science and technology will have comparative advantage. The competition for national strength among countries in the world is fundamentally one of science and technology. It has now become a common strategy for many countries in the contemporary world to revitalize the country, and establish it on a firm footing through advances in science and technology.

For China, science and technology has also played an irreplaceable role in producing continuous achievements in the development of its forest industry. As a whole, however, the application of science and technology is still at an initial stage in the forest industry, far from what is required by the rapid pace of development of the industry, nor is it adequate for the implementation of the six key programs, and the special characteristics and laws of forestry. However, the disparity means that there are potentials and challenges, as well as opportunities. To achieve efficiency in the development of the forest industry, technical innovation is essential and, therefore, in the new era, science and technology must be given priority to cater to changes and new concepts. With innovations in science and technology and their application in implementing the six key forestry programs, project development will receive strong support from an inexhaustible motive force to realize rapid development of the industry.

6.2.1 New Tasks and Requirements for Science and Technology

Knowledge is strength. Knowledge means fortune. Since the 20th century, a profound revolution has taken place in the world in science and technology, ranging from the establishment of quantum theory to the drawing-up of a “working framework” for human genome sequence. With IT (information technology), nanometer technology, and life sciences as representatives, it has witnessed a brisk development in modern science and technology, which has deeply affected the way of production and the lifestyle of humankind, brought about an abrupt change in economic structures, production organizations, and management models as well as a qualitative leap in productivity. The development history of science and technology is related to the evolution of human society. It has been so since the 20th century and even before that. By the end of the 19th century and the beginning of the 20th century, the United States had realized vast advancement, surpassing that of Great Britain through technological innovations in the fields of iron and steel and electric power. This was followed by Japan's catching up with and surpassing the USA and the rise of the “four small dragons” in Asia, which also followed a similar pattern of development. The steam engine invented by James Watt, the key scientific discoveries by Michael Faraday, and the invention of the transistor have not only generated great fortunes for society, but also brought about profound changes in the lifestyle and the way of production of mankind, thereby creating a whole new era.

In China, the market value of the Yuan Longping brand had already reached over 100 billion yuan, solving the food problem for many people. The ABT root-growing powder invented by Wang Tao, a researcher at the Chinese Academy of Forestry and an academician of the Chinese Academy of Engineering, also brought about economic benefits of over 10 billion yuan. These are just some examples. By resorting to the Douglas function, economists made a calculation on the contributions effected by the progress of science and technology in some developed countries to the growth of their economies and discovered that the ratio increased as time went by. At the beginning of the 20th century, it showed a growth of about 5%, about 20% in the 1950s, 40% in the 1960s, 50% in the 1970s, and the 1980s witnessed an increase of 80%. This profile testifies to the assertion made by Deng Xiaoping that, “Science and technology are the primary productive forces.” Therefore, it can be concluded that the present era belongs to science and technology, an era of knowledge.

The development pace of science and technology in world forestry is also accelerating, leading to a revolution in forestry. Represented by the GPS, GIS, and RS (3S) technologies (global positioning system, geographical information system, and remote sensing), the extensive use of hi-tech in the forest industry and the sudden rise of forest biotech engineering, with genetic engineering technology at its core, are having a tremendous impact on management methods and the efficiency of the forest industry in terms of forest resources, seedling cultivation, forest tending, disaster control, and exploitation of resources. At present, the forest industry in China is still relatively undeveloped at the initial stage of socialism and forest development remains far behind the needs for sustainable development of the economy, the weakest link in national development. The existing level of forestry science and technology lags behind that of the developed countries, as well as other industries in China, and this has become a major factor restricting the long-term development of the forest industry. Therefore, to speed up the advancement of science and technology and innovations, it is necessary to adopt more stringent measures to facilitate strategic adjustments in orientation and emphasis for the development of forestry. Only by doing this can China catch up with the advanced level of the developed countries in the shortest time possible and match their level of socio-economic development.

Science and technology are advancing rapidly with every passing day. China must address the problem from a strategic and overall point of view. How much recognition and attention paid to science and technology reflect the strategic consciousness and overall sense of urgency towards the problem? A correct understanding of the connection between progress in science and technology and the pace of development of the forest industry must be in place in order to overcome the “phenomena of giving importance only in words, but neglect planning and action.” It must be ideologically ingrained so that all those responsible will have the spirit of seizing every opportunity urgently, as time and tide wait for no man, to push ahead the advancement of science and technology and innovation in the forestry trade.

6.2.2 How Innovations in Science and Technology can Promote Efficiency

Efficiency and fair play are common ideals that society pursues. The relationship between efficiency and fair play, however, indicates a contradictory movement between the productive forces and production relations. A new state of society will emerge, which is better than the old, and will eventually replace the latter if the new one can bring about greater efficiency, higher productivity, and regulate and improve production relations, as well as alleviate social inequalities. The superiority of socialism over capitalism must be ensured not only through efficiency of the productive forces, but also through fair practices in production relations. This is because of the inherent contradictions between the productive forces and production relations. From this viewpoint, efficiency is, therefore, of crucial importance if socialism with Chinese characteristics is to be proven superior, and this applies to any trade.

Science and technology are the productive forces of primary importance. The evolution of human society is the history of the continuous development of science and technology, a history in which a highly efficient productive force overtakes the previous one. The enhancement of efficiency brought about by progress in science and technology is the most active factor in the development of productive forces. It is a revolutionary phenomenon which helps to bring about great progress in every aspect of life. To keep in step with the progress of science and technology in the world, the pace of development of world forestry must also be accelerated, bringing about a new science and technology revolution for the forest industry. Whether the level of forestry science and technology is advanced or in its initial stage, the efficiency of all productive elements determine whether rapid development can be achieved in the forest industry in China. The advance in forestry science and technology is, on the one hand, an important indicator of the level of development of the forest industry but, on the other, it is a crucial step that forestry must take.

The implementation of the six key programs has stimulated a great need for progress in forestry science and technology and created demands for increasing input for their development. This will undoubtedly push forward their advancement and promote a boom for some industry enterprises that subscribe to their application, thus resulting in rapid development of the forest industry in every way. Using scientific innovations as a strong driving force for forestry development is the key to realizing the goal of rapid development. The advancement of science and technology will play a decisive role in the six key forestry programs, determining the success or failure in achieving rapid development of the forest industry. The progress of system transformation and mechanism innovation can be easily seen, but after some time, it will be followed by a long period of quantitive accumulation when it will not produce much effect on development. Only science and technology can offer a limitless space for imagination and room for improvement, bringing about a strong “multiplier effect,” or “producing maximum power by using minimum energy.” The development of science and technology extends from a qualitative change in part to the whole system, a fundamental way for raising efficiency. The higher the level of science and technology and management, the greater the effect will be on development if policy conditions and level of investment are constant.

6.2.3 Key Points in Science and Technology Innovation in Forestry

6.2.3.1 Raise the quality of science and technology for developing the six key programs

The six key programs constitute the main arena for forestry development in the new millennium and, of course, for the innovations in forestry science and technology. The science and technology work must be linked to the implementation of the six key programs. There is an urgent need for their development, so that they can be applied in project development. Progress in the whole industry should be the primary aim of science and technological work, in order to realize the actual needs, speed up development, and raise the quality of the programs. Only by meeting the actual needs can science and technology work become a vital force and make a significant contribution to the development of the programs and to rapid development of the forest industry.

To raise the level of science and technology for program development, great efforts are needed to achieve results and popularize the practical methods, as well as hasten the standardization of the programs, intensify supervision over the quality of skills, and improve technical training. To compile a “plan for the development of key forest programs and popularization of science and technology,” a serious study of the results of existing science and technology work is necessary. Only then can their applications be popularized for the six key program development areas. Some demonstration areas can be selectively established to promote their effects. The leaders of forestry administrations at all levels must use these demonstration areas as a network for the promotion and popularization of science and technology in-line with what has been done by the leaders in the State Forestry Administration.

6.2.3.2 Developing technologies for cultivation and protection

1. it is important to develop forestry biotechnology, and to achieve breakthroughs in tree-breeding and particle-genetic techniques. It is necessary to deepen the knowledge in genetic engineering so as to identify and apply new techniques to improve major saplings, and speed up tree cultivation and processing techniques to improve the use of trees. Research should also be carried out on the techniques for microorganism preparation, fermentation cultivation, and production of bio-fertilizers, as well as biomedicine for forest use. The application of bio-techniques should then be promoted intensively throughout the forest industry.

2. Great efforts must be made to develop efficient methods of forest protection by finding new ways to prevent and eliminate forest pests and facilitate forest fire detection and warning. In the prevention and handling of forest calamities, especially in the prevention and elimination of plant diseases and pests, the methods for forecasting and forewarning, and the biological control of diseases and pests must be improved through information technology and biotechnology. Extensive use of anti-disease breeding techniques to control the large-scale outbreak and spread of plant diseases and pests is crucial, in order to prevent or reduce disasters, and increase the efficiency of forest cultivation.

3. More research is needed to develop techniques for forest administration and management as well as to achieve success in the monitoring and supervision of forest resources and conducting forest surveys through remote-sensing technology. Along with the development of astronautic and aeronautic technologies, the administration and management of forest resources in China should also experience a revolutionary leap in the development and application of science and technology, especially in such fields as aerospace remote-sensing, air-navigation remote-sensing, and radar remote-sensing, as well as global positioning system and geo-information system. Thus, the administration and management of forest resources can be speedily transformed from the traditional to an integrated, modern type so as to achieve remarkable results in forestry information and catch up with the advanced countries.

4. It is of great importance to develop new methods for breeding and proliferating wild plants and animals. A study should be made on the multitude of living beings and, based on a deep understanding of the life habits and characteristics of the wild animals and plants, carry out research on those species that may be of important economic value so that they may be domesticated and multiplied on a large scale. Methods need to be developed for the speedy proliferation of wild animals and the cultivation of high-yielding wild plants on a large scale through artificial breeding of the species. This will provide a sound foundation for the reasonable exploitation and utilization of the resource.

5. New methods must be developed for cultivating plantations that are of high quality, high-yield, and highly efficient to achieve sustainable development. The breeding of good species, bio-optimization, and information distribution methods should be merged, with special attention paid to solving the problems of directional cultivation and integrated planting. The bio-economic problem of soil deterioration and frequent infestation of pests must be solved by stabilizing the bio-system and diversifying the landscape. In regions where conditions are suitable, practical new methods of fertilizing, and water-saving irrigation can be utilized, and plant-growing regulating agents should be applied to forests to speed up the development of plantations.

6.2.3.3 Developing ways of using technology

1. efforts must be made to develop methods to control the use of forest resources and achieve sustainable exploitation. A study should be made on how to create a “win-win” situation which is good for both the environment and the economy and can ensure that the exploitation of forest resources does not disrupt the continuity of sustainable ecology and economy. In addition, it would be beneficial to study how to use the fruit, flowers, juice, and leaves of forest plants and promote the use of forest resources to the fullest, and raise their productivity to provide the market with diversified products, thereby meeting the needs of the people.

2. Ways must be found to use forest resources effectively, especially to produce good quality plywood. Technology should be applied to develop new processing methods to produce composite wood materials for the industry. By using wood fibers and non-wood fibers, new types of composite wood materials of high density, high strength, high quality, and high value-added can be produced, which are non-toxic and does not cause pollution. This will result in higher productivity, and more comprehensive use of timbers for economic efficiency.

3. Ways must be found to develop by-products and special products, as well as new methods of processing. With a market-oriented outlook for the six major forest development programs, China can speed up the development and exploitation of special forest resources, and build up these resources for the economy so that a new type of industry may be introduced to enhance farmers' income. Technological advances must be speeded up for processing forest products, extending the forest industry chain, and pushing ahead industrialization management. Priority must be given to develop more efficient ways for storing, keeping fresh, and processing cereal grain and oil and mass-produced non-forest fruit to raise their value added. More sophisticated methods of processing and the comprehensive use of timbers and forest products will make the processing of forest products the growth point for the rural economy.

4. It is important to develop ways to use animal and plant resources efficiently, and to find new methods of multiplying and using the animals and plants for industry. Better techniques for processing animal and plant products will enhance their roles in the fields of medical treatment, healthcare, tourism, and scientific research, so that the greatest economic benefits can be achieved with the least consumption of resources.

6.2.3.4 Strengthening advanced management methods

It is important to introduce, promote, and apply extensively the “3S” techniques (GPS, GIS, and RS) networking methods, and other new and sophisticated techniques of modern times to improve the means of monitoring and control over forest resources. Thus, the method of forest management must aim to form a network, by using digital and accurate information on forestry to bring about industrialization and an integrated system of management so as to make a leap in forestry productivity. The “3S” techniques have already achieved many breakthroughs. For example, the GPS has already been applied in auxiliary navigation for aerial afforestation, in positioning demonstration areas, in determining the lumbering boundary and in surveying forestry areas, thus helping to raise efficiency and accuracy in monitoring, which has led to good economic benefits. In the three areas in north China, it was possible within two years, using the RS technique to assess the amount of resources in terms of forestland and pastureland, as well as the level of the bio-environment, and to complete the survey of forest resources in the Tibet Autonomous Region. By using the GIS technique, it was able to introduce conventional digital management, as well as establish divisions for forest growth. The use of simulated models also provided the necessary conditions for forecasting and decision-making, and enabling the efficient monitoring of forest resources. Henceforth, the comprehensive use of the “3S” techniques, with RS and GPS forming the base, will help to establish and improve the GIS to provide a technical basis for implementing the forest development program, and to formulate a plan for the sustainable management of forests, for supervising management behavior, and for assessing the achievements and efficiency of development of the forestry sector in the country.

Attention should be paid to the development and application of new and sophisticated techniques in forestry, and more efforts should be made to develop “digital forestry” and speed up the modernization of the forest industry. The development of “digital forestry” will be of great significance, but this technical project will require hard work. Through this project, however, it will be possible to assess the level of forestry infrastructure development in China, an important symbol of whether China is capable of participating in international competitions and also an important measure of the efficiency of forest management and sustainable development of the forest industry. When completed, the project will greatly raise the scientific knowledge of forestry development, and enhance the efficiency of forest management and the technological level of decision-making. It is also a useful tool for solving the critical problem of incomplete, asymmetrical, and untimely updating of information resources in the forest industry and will eventually promote the quick circulation and sharing of information resources. During the Tenth Five-Year Plan period, great efforts must be made to push ahead the development of “digital forestry.” The main development objective is to establish a common platform for the development of the six key programs to identify uniform criteria and norms for digital collection and processing, and to develop an information system at different application levels and for different purposes. It will also be useful for establishing all kinds of multiple-scale databanks at the national level, at the level of the major forestry provinces, and important areas for ecological development, as well as at the county levels. For this, it is necessary to train professionals in “digital forestry.” On this basis, it has to form an assembled and integrated technical and application system for “digital forestry,” and a system for monitoring and managing resources. The contents at the core will include the following four aspects: the development of a technical system; a professional application system for the six key programs; an application system for the forewarning, monitoring, and appraisal of serious forest disasters; as well as the integration of the application systems.

6.2.3.5 Technical criteria for sustainable forestry development

It would be worthwhile to specify and put into practice some technical criteria for the sustainable development of forestry and to set up a model for the people to lead them in the right direction. It would also provide an objective operational measurement for the appraisal of achievements in the forest industry. This must be treated as an important and basic work for achieving standardization in forest management. On the basis of the criteria for sustainable management, and in the light of the principles set by the international standard for sustainable development of forestry and the current situation, it is necessary to set a technical standard that reflects fully the objective, process, and results of the forest industry in China. In addition, based on research and experimentation, a plan can be formulated and put into practice for an authentication system for sustainable development, and a system for attestation—that is, a method to appraise the results of the strategy, plan, and policy for sustainable development in the light of the technical standards set. A study of the impact that the authentication system exerts on China's forest management, the forest industry, and forest products trade would enable relevant policies to be made. It is also important to take an active part in the international process for the sustainable management of forestry and map out the relevant technical standards so that China can have a voice in the internationalization of standards and attestations.

6.2.4 Provide Motivation for Forestry Sci-tech Innovation

The motivation for forestry sci-tech research originated from the need for science and technology to modernize the industry and achieve sustainable development of China's economy. Only when the needs can be turned into a sci-tech investment and motivation policy of the government at various levels, into an innovative and development ability of enterprises, and into the goals pursued by technicians, can they become a motivation for development. The process from the conception of a theory to the study of it, and from the formulation of scientific knowledge to the technical study, experimentation and dissemination of it, is a very long one. This long period needed for the development of forestry methods has become a contradiction because of the limited academic lifespan of researchers. The biggest problem for research in forestry science and technology does not lie in how to achieve technical innovations, but in how to create a social, political, and economic environment for nurturing sci-tech innovation, and provide it with sufficient motivation for setting up a system for technical innovation, which takes into consideration the special characteristics of forestry, and to push forward the commercialism of forestry sci-tech results and facilitate their application.

6.2.4.1 Deepen sci-tech system reform

The aim of deepening sci-tech system reform is to establish a new operational mechanism that caters to the system of a socialist market economy and to the development rules of forestry itself, thus promoting the close linkage of science and technology with the economy. Therefore, it is necessary to work out policies and measures that would encourage sci-tech institutes to enter into the main arena of ecological and industry development, to make close contact with the six key programs and the development of the forest industry. This will break the existing situation in which all units have their own policies and methods, and are separate from one another. It will promote technical cooperation and exchanges among the sci-tech institutions, the sci-tech units, the departments for project management, forestry institutions and enterprises, and international organizations in order to create an environment that is conducive to the advancement of forestry science and technology. To make synchronized progress, there must be coordinated implementation and completion of the project, and the plan for sci-tech research must put the existing sci-tech results to practical use in program development. Special funds must be used for the designated purposes, but part of the project investment can be used for related technical services. To further establish and improve the market for expertise, information, and talents, and to regulate and put the market in order require the establishment of a legally effective system of operation for the technical personnel and the users, namely, a system of equality, openness, competition, and optimization, and a mechanism for the proper allocation of interests, as well as an incentive mechanism. Academic debates and arguments should be held on an equal footing for all, without deferring to seniority or prestige, thus ensuring that different academic viewpoints can be openly discussed and published, with more opportunities given to technical personnel to express freely their opinions and views. This will enhance the exchange of ideas and cooperation in research work across disciplines. This will help to overcome academic barriers and expand information-sharing on the basis of respecting intellectual property rights. The protection of intellectual property rights needs to be reinforced according to the law to prevent these assets from flowing out. Professional inventions and individual patents also need to be defined correctly. The relations between the State, the collective, and the individual must be handled well in order to motivate the three players to bring about transformations in sci-tech results and popularize the application of technologies. As for the distribution of technologies to the countryside and for social welfare purposes, the government at all levels and departments for forestry administration must provide active support and necessary assistance to ensure basic conditions for sci-tech personnel to offer their services in the rural areas.

Great attention has to be paid to system innovation. To a certain extent, system research is more difficult than technical research. The technical research discussed here is essentially different from the technical research in science and technology of a traditional nature. It is a process, a systematic program. The process includes not only the development and application of new products and technologies, but also the transformation of all these technically developed results into realistic forces in production to be used on an extensive scale in the market, and finally to realize its industrialization. This requires extending the sci-tech work of a traditional nature to enterprises and to the market. Efforts should also be made to break down the system's barriers which are unfavorable to science and technology development in forestry, and to establish a new type of operational mechanism for it, as it is of great significance to forestry development. The system of personnel placement must be improved to incorporate the elements of “openness, free circulation, and competition.” The system for filing items must be gradually changed to one of bidding and tendering, to reduce the incidence of repetition on subjects of scientific research. As for the mode of distribution, the science and technology institutes are given the authority to decide their own ways of distribution and to explore ways to improve the methods used for distribution, and so to raise the income of the research personnel, especially those who make substantial contributions, thereby recognizing the value of their work. A scientific method of appraisal and supervision should also be introduced to improve the system for on-the-spot checks and acceptance of the results, and the system for reporting the results and defending the thesis. For the management of the organization, a decision-making system consisting of a board of directors, with a president, should be set up to take on the responsibility for science and technology inquiry and supervision.

6.2.4.2 A national forestry sci-tech system for research

The weakness in basic research is the major factor preventing innovation in the commercial forestry sector at present, and is also the main reason for the relatively few breakthroughs in the key technical fields, therefore having less social impact. The extremely severe floods of 1998 have given rise to much debate about the effects of water on forests, and caught the attention of leaders of the CPC and the State, as well as those from all walks of life. Since there is a lack of systematic, sustainable, and dynamic research, the forestry sector has been unable to produce persuasive evidence in time to support its theory and rendered the department helpless, a reflection of the weakness in basic research and its inability to cater to the needs. Basic research in forestry technology serves as a cornerstone for a leap in the development of forestry. Only by providing a solid foundation in this area can results be achieved. Therefore, it is necessary to have a long-term view by putting in more investment to strengthen basic research in the forest industry.

The most urgent need in forestry development at present is basic research, and efforts must be made to strengthen this, especially research on tree saplings and their cultivation, and on relations between the forest and water, the forest and the atmosphere, as well as between the forest and the environment. Also important is the basic research on desertification and the best way of tackling this problem. Another area is systematic research on how to sustain the stability of forest-ecological colonies and the standard and quota required for sustainable forest management, as well as the development of a gene bank for timber species, seed resources, and timber science. The establishment of a gene bank for timber species and seeds is another sci-tech project of national importance after the project on “digital forestry” by the State Forestry Administration. Protecting the genes of timber species and seeds is important because once lost, they can never be recovered. It is a project that will make major contributions and benefit especially future generations, a “project of merits and virtues.” Doing this work well will contribute greatly to the preservation of forest species and seed resources, the protection of numerous living beings, and diversification in inheritance and the ecology. This will ensure a guaranteed supply of necessary species and seed resources for ecological development, and the development of timber forests for industrial use, as well as economic forests, and horticultural and herbal medicine gardens. It is a heavy task, and of great importance. This task must be set in motion as quickly as possible and implemented gradually. If serious efforts are made in implementation, the basic preservation of forest species and seed resources will be achieved within 5–10 years, and some 3,000 kinds of arbors and shrubs as well as some 300–400,000 types of bamboos, rattans, and flowers and plants will have been preserved. Moreover, some 1,000 optimized species and seeds would have been preserved.

To fulfill the heavy task mentioned above, it is necessary to draw up a uniform long-term plan to strengthen basic research and its application, as well as the development of innovation bases of all kinds to improve the skills for sustainable sci-tech innovation. To revitalize the forestry industry, it is essential to first invigorate science and technology research. During the Tenth Five-Year Plan period, the plan is to construct a batch of new laboratories and project centers at national, provincial, and ministerial levels, to reorganize and equip the stations for positioning and monitoring forest ecology, and to set up a nationwide network of bases for ecological experimentation. The development of demonstration bases for the revitalization of forests will be very useful, as well as an information network to disseminate forest science and technology quickly and efficiently. The disciplinary structure needs to be continuously adjusted and the measures and conditions for forestry sci-tech research improved in order to obtain results, foster talents, and maximize benefits.

In addition, the new and diversified system for forestry sci-tech investment needs to be improved according to the new management pattern introduced by the government. Owing to the public nature of the effects of forestry sci-tech results, if the market disposition is not favorable while research in forestry science and technology demands a long period of work, the endeavor is risky and the intellectual property rights of the research cannot be effectively guaranteed. Therefore, the government must take up the major task of forestry sci-tech investment. By adopting various means and ways, the State Forestry Administration has to increase its investments in science and technology research and try its best to secure a higher growth rate than the forestry economy in the corresponding period. To carry out the work, no less than 3% of the total input should be used for the protection of natural forest resources and returning farmland to afforestation. The treatment of sandstorm sources around the cities of Beijing and Tianjin will be supported by a special fund which will also cover forestry science and technology research that will be used for the development of demonstration areas and the application of sci-tech results in these programs, as well as the development of stations for ecological monitoring as part of the programs. In the local areas, full use should be made of the “green box” policy by taking into consideration the real situation in their localities and increase by a big margin the investments in forestry science and technology. It is also important to ensure that the amount of input be increased year by year, and the rate of increase should be higher than that of economic development in the area. Meanwhile, policies and measures should be worked out to offer more incentives to encourage and attract individuals and enterprises to increase their investments in forestry science and technology so that they may be the main contributors to the development of forestry science and technology. Enterprises and individuals are permitted to offer donations or to set up foundations, with the funds used specially for supporting research in forestry science and technology, or giving awards to research personnel. Efforts must also be made to seek assistance from the financial, taxation, and insurance sectors to support this research in order to establish gradually a new pattern of investment in forestry science and technology from diversified channels and levels, and to turn around as soon as possible the situation of low investments in forestry science and technology.

Moreover, efforts must be made to foster talents within China and to import talent from the international community. Depending on the needs of the six key programs, top-grade talents can be introduced from overseas, including highly-skilled teams. Encouragement should be given to highly talented nationals to return from overseas to make a career in research. The sci-tech appraisal system must be reformed, and criteria set for the assessment and selection of young talent, especially of top-grade ones. It is also important to make the subject a practicable one, and the per capita proportion of funds for personnel engaged in sci-tech research must also be raised. Ways and means should be found to provide incentives for hi-tech enterprises to support and recognize the innovative value of the sci-tech and management personnel.

6.2.4.3 Commercialization of sci-tech innovations

The application of research and technical promotion are the two key factors determining whether forestry science can be turned into a productive force as soon as possible. The way to improve the work in forestry applied research and technical promotion lies in the commercialization of forestry sci-tech results. It is necessary to put into practice the registration of patents, improve the management of intellectual property rights, and establish an incentive system to encourage forestry sci-tech innovation. Intellectual property rights for innovations should be given more recognition in the appraisal of scitech results, and a special fund can be set up to support enterprises and individuals who apply for patent rights, both domestically and in foreign countries. Forestry inventions should be registered with the State Intellectual Property Office of the PRC so that the patent can be approved speedily and become a competitive force in the market. It is necessary to foster a smooth relationship between the owners of forests, the management authority, and those involved in technological research so that research institutions and individuals can be encouraged to participate in joint ventures and cooperate by using their scitech results as investments. In this way, the sci-tech personnel can gain income from their sci-tech innovations, thus providing an incentive for their work. The chief scientists (heads of the research teams) can be rewarded in various ways, such as annual salary and other options, and awards given to units and individuals who make great contributions in their fields of research and applied research. It is necessary to set up new laboratories and project centers at national, provincial, and municipal levels, and build positioning stations for monitoring the forestry ecology, as well as experimental bases to form an ecological network system. These demonstration bases will utilize science and technology to revitalize forestry at all levels and play a radiating role in pushing forward science and technology development in forestry.

Great efforts must be made to promote sci-tech industrialization and speed up the reform of the economic structure of forestry to raise its competitiveness and integral strength. The industrialization of science and technology, owing to its relatively high-level requirements, both in investments and human intelligence, will be able to achieve greater competitiveness in quality, offering extensive market prospects with a prominent radiating and demonstrative effect. The pioneering role of science and technology should be recognized, as sci-tech industrialization will speed up the strategic reform of forestry's economic structure. This is one of the major tasks of science and technology during the Tenth Five-Year Plan period, the major points being the following:

1. With a market orientation and based on the development of the six key programs, the aim is to accelerate the development and exploitation of special forest resources and their tourism and relaxation value, to turn forest resources into a dynamic economic resource. In this respect, there is great potential to be realized, especially in the western regions where large forests, grasslands, and herbal medicine resources can be quickly developed to form a new industry to increase the income of farmers.

2. The establishment of a number of leading enterprises based on science and technology will be able to give prominence to the forest industry through its scale, value added (with its high technical level), openness to the outside world, and multiplicity (multiple ownerships and forms). This will strengthen its ability to absorb and apply sci-tech results, raise its competitiveness and benefit the farmers.

3. It is to spur technical improvements in the processing of forest products, extend the industrial chain of the forest industry, and promote industrialized management. Priority should be given to strengthen research and development in areas such as storage and processing techniques for large-scale forest products, such as grain, oil, and woody fruit, and raise the value added of these products. However, the intensive processing and comprehensive use of timber and other forest products should continue so that the processing industry can become a new factor for growth in the rural economy.

4. It is to step up the development of bases for fast-growing trees and give prominence to “high, new, and sophisticated” types to create “famous, special, and fine-quality” products, and by relying on technical measures to promote integrated management.

6.2.4.4 Introduction of incentives for a competitive environment

Whether forestry science and technology can flourish depends primarily on the talents available. The development of the six key forestry programs can be the turning point for sci-tech research and its dissemination. It can provide the opportunity to nurture a batch of pacesetters in academic studies who can form the backbone in sci-tech research so as to raise the quality of management and operational personnel, and who, with their strong management ability, would be able to boost the forestry economy and sci-tech trend both domestically and internationally. Thus, it is important to improve the incentive and competitive system for personnel in order to provide an environment in which they would take bold steps, even risky ones, to be innovative, and where leniency would be shown for failures in order to promote the reasonable flow of talents and fair competition. Overseas talents in forestry science and technology can also be encouraged to return and make their careers in China.

A policy environment conducive to the transfer of forestry sci-tech results and the development of its industrialization is also important. According to the requirements of the Agricultural Law of the PRC and the Law of the PRC on the Popularization of Agricultural Technology, the forestry promotion systems at all levels must be reformed, and teams must be set up to look after public welfare, as well as offer management services. In this way, a new forestry promotion system will be formed at the grassroot level which is able to combine the state-supported and market-oriented sectors into one, with a system combining compensation with non-compensation. A new way must be found also for the promotion of forestry sci-tech results in the market, with a new orientation and benefits as its aim, and a new system of allocation. Forestry sci-tech units and individuals can be encouraged to transfer their sci-tech results in diversified ways and run sci-tech enterprises. Sci-tech personnel can also be allowed to engage in other sci-tech projects and promotion work, and obtain their share of various forms of technologies, investments, and services. Such forms of forestry sci-tech industrialization as joint ventures between enterprises and farmers, or the market and farmers, can be encouraged, with support given to those promoting the combination of forestry, science and technology, and education, or the combination of production, learning, and research, as well as an integration of technology, industry, and trade. Effective measures need to be adopted to promote the cooperation of forestry sci-tech institutions in the east with those in the west, and sci-tech personnel in the east will be encouraged to join those in the west for a cross transfer of sci-tech results. Effort should also be made to develop and establish organizations to act as middlemen for services such as forestry sci-tech project appraisal, and bidding and tendering to obtain qualification authentication from the Ministry of Science and Technology for the purpose of strengthening the administration and standardizing development.

6.2.4.5 Raising the level of sci-tech application through training

Raising the level of productivity in forestry depends eventually on the choice of personnel working at the forefront and the type of technologies used, as well as the measures taken in production. Science and technology can be turned into a powerful force only when it is mastered by the masses. It must be recognized that the technical quality of the forestry trade is not high, and talents are the primary resource to ensure the rapid development of the forest industry. It is therefore necessary to build up a cohort with the key task of liberating and raising the productivity of the forest industry.

At present, forestry is facing a difficult task in its development and is in dire need of a cohort of qualified cadres and workers. Though there is a large reserve of human resources in the forest industry, it is still relatively short of qualified personnel. With the restructuring of the forest industry on a large scale, the knowledge and methods used by former forestry personnel and workers will not be adequate for the needs of the new situation. The restructuring of the economy in the rural areas will bring about a great number of surplus labor who will be shifted into the forest industry and, with the implementation of measures for rapid development of the forest industry, talents from other walks of life will start to flow into the forest industry too. What deserves attention is that although the enrollment in institutes of higher learning offering forestry courses is gaining momentum, the increase in forestry specialists is quite limited, and vocational schools offering forestry subjects are on the decline, especially with their fostering abilities weakened. To depend on formal schooling to meet the needs of rapid forestry development, or raise the quality of the trade as a whole, is not feasible and so education and training in forestry must be strengthened. It is necessary to establish a regular and orderly system of training, work out practical training programs, and put into practice an active and effective training policy to upgrade the education and capability of leading cadres, project administrators, technical personnel, and the broad masses of forestry farmers at all levels, thereby helping them to understand the forestry programs, policies, standards, and regulations as well as acquire some basic skills in work. The training must be carried out from the top-down to the lowest levels, step-by-step and from level to level in an organized way. The training should be seen as one of the supplementary measures to be carried out simultaneously with the six key programs and projects according to the annual plan. The fees for training should be included as a project expenditure, while the technical training for ecological development should be free of charge. The budget for the development of training bases must be increased so that the study and living conditions of the trainees can be improved. In the meanwhile, efforts must be made to improve the training system and to prepare the personnel so that the training program can be systematically carried out in a programmed and regular way, thus optimizing the software environment and enhancing the training ability of the whole trade.

6.3 Sound Management for Forestry Development

“Strictly managing the forest, spending money carefully, and giving priority to quality”—this statement has been proved effective for quite a long time.

Management means to put all production elements into a scientific and systematic framework so that it is able to coordinate and link the whole process in an efficient and effective way. Broadly speaking, management includes mapping out an economic development plan with relevant rules and regulations, effectively coordinating all production elements, and supervising and regulating production and management processes. Forestry work in China is still at a low-level of development and it is unable to make fundamental changes in a relatively short time. Therefore, to spur forestry productivity, it is essential to strengthen and improve the management in an effective way to accelerate forestry development.

The strong feature of public welfare as an aim of forestry, the obviously long period required for forest production, and the breadth and extensiveness of forest development shows a dire need for improving forest management and administration. This is a heavy task ahead for forestry development in the new era, which demands sound management and administration practices, taking into account the new situation, the new tasks, and new characteristics in forestry development. At present, there are two factors in forest management that are of utmost importance.

1. It is important to identify the core of forest management and administration, with emphasis on the “three major subjects.” There are many aspects to the work of forestry management. If these are done without considering their degree of urgency and efforts are put into all of them at the same time, the result will be disastrous. It is essential to determine which aspect should be tackled first to bring about well-rounded development. What is the most important factor for good forest management in the new era? Through analysis and study of many problems encountered in actual work, it seems that the strict management of forest resources, forestry funds and the quality of forestry operation is the key factor. This is a critical problem for forestry development at present. It encompasses the three main areas that must be dealt with, which may be summed up as “Strictly managing the forest, spending money carefully, and giving priority to quality.”

2. The aim of forestry development has now shifted, from lumbering as the major activity, to ecological development. The historic transition has given primary importance to the development of forest ecology. The industry faces the heavy task of planting trees for afforestation projects to make the country green. All these require the government at all levels to carry out effective work in organizing and administering the tasks. Forestry development is a highly-complex undertaking spanning across the primary, secondary, and tertiary industries. Moreover, it has a distinctively outward nature, exerting great influence on society over a long period. Therefore, the government has not only to be efficient in ecological development but also to encourage the full participation of the whole society. Moreover, in order to develop forestry with Chinese characteristics it is necessary for the government to strengthen its macro-control capability. At present, this capability to organize forestry does not match the responsibility it has to take up. Consequently, attention must be paid to strengthen this capability, especially in the area of forest management and administration. To this end, ideological and organizational development has to take place at all levels, including the working-style, and business and system administration, especially in the State Forestry Administration.

The principles of “Strictly managing the forest, spending money carefully, and giving priority to quality” must be enforced strictly. If this is well done, then the work at the core of forest management is well under control. Effort must also be made to strengthen the “five developments” of the organization, so that they will become the leading force in raising the level of forest management. With a good understanding of the two keys factors of development, forest management will be able to bring the work of forestry to a higher level.

6.3.1 Understanding the “Three Principles” in Forestry Management

“Strictly managing the forest, spending money carefully, and giving priority to quality” are the three management principles that must not only occupy a prominent position but also be interrelated. Forest resource is the foundation of the forest industry and the material basis for the preservation and development of the ecological environment. Therefore, “strictly managing the forest” must be the basis for all forestry work in the new era. Funding is the important material force in forestry development. At present, the sharp increase in investments in forestry has made the principle of “spending money carefully” the second key factor for strengthening forest management. To raise the quality of ecological protection is the fundamental objective of the forestry ecological project and to “give priority to quality” will guarantee the healthy development of the forest industry. The three management principles form the basis, the key link, and the core of the forest industry in the new era, and are fundamental to the historic transformation of forestry development. Much work needs to be done, but with a strong foundation all work will fall into place. These three principles are therefore of paramount importance, and in this sense, constitute the main framework of the forest industry.

6.3.1.1 The principle of “strictly managing the forest”

To strictly manage the forest means to regulate and control the use of forest resources. This is not new. There are some such as Zuo Zongtang and Feng Yuxiang, who considered the forest as valuable as their own lives, saying that “whoever fells my trees will have their heads chopped off.” They resorted to this extreme penalty to exercise strict control over their forest. To manage the forest strictly today has greater significance than in the past.

Why must the forest be “strictly” managed? There are mainly two reasons. The first is that forest resources form the foundation of all forestry work. Without forest resources there is no forestry. The second reason is that forest resources at present are not only an integrated body of trees, a material being, but what is more important is that, in terms of both its position and role, there has been a great change compared to that in the past. The forest now forms the principal part of the ecological system on land, a screen for maintaining ecological balance and for defending ecological security, as well as an important factor for the sustainable development of the national economy and society. Along with the shift in focus from timber production to ecological development in China's forestry development, the significance of “strictly managing the forest” will have farreaching effects into the future. The emphasis laid on “strictly managing the forest” will protect not only a few trees but the whole ecological system, including acting as a screen for national ecological security and the material base for sustainable development of the society and the economy.

How should the forest be “strictly” managed? This is determined by its special position and the role it plays. At the same time, it is also decided by the special properties of the forest. The forest has three prominent characteristics: one is that the growth period of a forest is especially long, taking at least dozens of years, and even up to hundreds of years. Thus, the cultivation and restoration of a forest takes an extremely long time. “Easier to destroy than to recover it” is one of the prominent features of the forest. Once a forest resource is damaged it is difficult to recover it, requiring much greater effort. The other is that the period required for forest management is also very long, which is determined by the former feature. “One generation plants the trees, in the shade of which another generation rests,” as it is often said. Hence, to manage the forest requires a long-term view and relevant measures. “To enjoy the meals prepared by our ancestors and create benefits for our descendants” is the general meaning encompassed by forest management. However, felling trees indiscriminately, for the immediate gain of some individuals or groups without concern for the damage caused to the long-term interests of the State and the people, that is, “to enjoy the meals prepared by ancestors but to do evil for descendants,” often occur in daily life. Forests grow on a very extensive scale and the people who manage the forests differ greatly from one another and thus difficulties arise. Meanwhile, owing to their extensiveness, many destructive factors are present. Besides indiscriminate felling and illegal logging in the forest areas, there are such natural calamities as mountain fires, lightning, plant diseases and pests, droughts and floods. All these can cause great damage to forests.

All the above reasons determine that strict management and control over forest resources are essential. Should any negligence occur, the losses incurred cannot be remedied, which can have drastic consequence.

Therefore, the strict management of forest is now an important and urgent matter. The problems arising from forest resource destruction are serious and are manifested in the following. First, excessive logging is increasingly becoming grave. In the fourth forest resource survey, the felling that occurred beyond the planned quota was 42 million cubic meters, while in the fifth survey, excessive logging reached as high as 86 million cubic meters, double the amount of the previous year, showing a rapidly rising trend. Second, the incidents involving excessive logging, felling trees without official permission, and reclaiming land by deforestation have happened time and again. Soon after the program for national forest protection was implemented, activities such as excessive logging, or felling trees without official permission within the prohibited tree-felling areas, continued in a flagrant and unscrupulous way.

Analyzing these problems that have arisen in recent years to find out the root cause is a prerequisite for solving them. There are objective and subjective reasons that have brought about these problems, but more importantly, there exists a gap between knowledge and practice, which is discussed below.

1. There is little awareness of the law. For years, functionaries including some leading personnel in forestry circles have been unaware of the relevant laws and regulations—they have no idea what it means to breach the principles and the law, and committing crime. In their minds, excessive logging is not against the law as the persons who have committed crimes are allowed to go unpunished, resulting in the recurrence of crimes committed, even by leaders and persons in the legal service. (In the past, acts of excessive logging were not checked and treated as crimes committed). In accordance with the judicial interpretation of the Supreme People's Court, any enterprise which fell trees beyond the allowed quota is regarded as felling trees without official permission, and shall be punished as a criminal for illegal logging. If these acts are not stopped in time, more forestry farm managers or directors of the forestry administrations would be put into prison. It is time that they wake themselves up.

2. The illegal and criminal activities are not dealt with severely enough. There is still room for improvement on the prevailing laws on forestry. The main problem is non-compliance and lax law enforcement. In the handling of cases involving forestry, incidents such as obstruction of justice by means of power and penalty replacing conviction are widespread. There are cases where people intentionally cover up offenses occurring in their own units and systems without reporting them to their supervisors as required or punishing those held accountable as severely as required, and instead of prosecuting them according to the law, they handle them internally. There are even cases where no one seems to care about enforcing the law against indiscriminate felling, and there are also those who take a laissez-passez approach to others within the system who rob the resources they are entrusted with, thereby spawning a number of serious cases of destruction of the state forest resources. If such a situation is not radically altered, the protection and development of forest resources will remain an empty talk.

3. A well-devised supervisory and control regime is yet to be in place. There is simply no standard case-reporting regime. As clearly required by the State Council in its Document 2 (Guofa 2001), a sound accountability system needs to be set up whereby leaders are held responsible for the protection and development of forest resources during their terms of office, and leaders of government at various levels should be regarded as the primary persons held responsible. However, no specific measures for enforcing this document are in sight.

4. Lack of management competence is also a problem. To begin with, all the staff should be evaluated on their work. Over the years, the forest authorities and the forest public security forces have played a significant role in protecting forest and wildlife resources and social stability in the forest areas. Yet, numerous problems still exist in capability-building. Their skills and competence fall far short of the demand for reform and the development of forestry.

5. Some of the policies and measures are inadequate. Over the years, the State has developed a host of policies supportive of forestry, which are intended for the quick development of the industry. However, in the real world, some localities have done little to complement them with their own policies. To illustrate, the State has made adequate investments for the protection of natural forests, yet there is a big gap and unavailability of matching funds from the localities, which makes project implementation and the resettlement of laid-off staff impossible. In some places, there is a strong awareness of the need to protect the natural forests and a blanket ban has been imposed on felling in the natural forests but there are no subsequent ban-related steps to follow up with. This situation causes difficulties for the forestry enterprises and makes the work of the staff extremely difficult. The problem of the enterprises' loss of income and debt service after they stop felling has also, to some extent, hindered program and enterprise developments.

6. The management system of state-owned forest resources is not well structured. For years, the forest enterprises have acted as both managers and business operators of the forest resources—a dual-role player. There has been no effective mechanism to check the tapping of those resources. Therefore, whenever the interests of the enterprises and those of the State conflict, and whenever the immediate and long-term interests collide, the enterprises tend to give priority to their own immediate interests.

It is important to have a clear perception of the current problems and their root cause. These problems are not accidental; rather, they present a picture of in-depth contradictions inherent in the forest industry under the new circumstances, and the cumulative effect of those issues in the course of deepening reform. With the deepening of reform and the leap in growth of forestry, more issues and contradictions are likely to emerge. Rather than turn away from these existing issues, the authorities concerned should strive to resolve them. In fact, it is necessary to be proactive and be ready for other issues that might arise and work out feasible measures for their resolution. In the light of the new situation and new assignments in forestry development, the current phase of “the strict management of forests” should focus on the following aspects.

1. Forest resources must be controlled strictly in accordance with the law, and a system set up whereby those depleting the forest resources will be held accountable. To protect the forest by law is what underpins “the strict management of forest.” In response to the grave situation faced in forest protection and the large number of law-offending cases, law enforcement must be strict and more severe penalties must be meted for forest depletion offenses. It is essential, therefore, to establish at the earliest possible date, an accountability system to deal with the new phenomena of lack of control resulting in forest depletion cases and dangerous crimes committed. Those units or government officials who do not discharge their duties conscientiously, or are negligent in control, and violate the law, regulations and policies, commit offenses knowingly or in law enforcement, thereby causing forest depletion, should be investigated for their administrative or even legal liabilities.

2. There must be strict control over woodland so as to reverse its negative trend. Woodland form the basics of forestry and “the strict management of the forest” means starting with woodland. Therefore, woodland should be protected through law enforcement and inspection as demanded by the State Forestry Administration. The forestry departments at various levels should impose self-checks besides discipline in inspection and supervisory duties. Those who expropriate and occupy woodland at will without authorization, destroy the forest for land reclamation, and alter the nature of the woodland, should be investigated and punished according to the law, without exception no matter who is involved. Those forestry department staff who engage in fraudulent practices, punish culprits leniently or cover up the offenses should be severely punished according to the law. At the same time, all localities should speed up forest title registration and forest usufruct certificate issuance. There are still over 33.33 million hectares of woodland without a forest usufruct certificate, and hence the land confirmation and forest usufruct certificate issuance must be completed soon. For the woods and woodland reverted from cultivated land, the forest usufruct certificate should be issued quickly.

3. There must be strict enforcement of the cutting quota to put an end to excess felling. Experience has shown that the cutting quota is instrumental in controlling forest consumption and boosting the virtuous cycle of forest resources, and as such, it should be adhered to. The strict control of quota forms a vital link for “the strict management of forest.” Self-checks should be conducted everywhere with regard to the implementation of the quota. Wherever there is a criminal case, it must be tracked down. Those who are caught for wrongdoing must be punished, and those who are investigated for criminal liability must be treated as such and should not just be fined instead of being sent to prison. Greater efforts should be made to supervise the quota implementation in the natural forest protection areas. Commercial cutting of natural forests within the protection areas in the upper reaches of the Yangtze River and the upper and middle reaches of the Yellow River should be brought to a halt across the board. In addition, the timber production in the state-owned natural forest protection areas in the northeast, Inner Mongolia, Xinjiang, and Hainan must be reduced according to the plan. Those responsible and their superiors must be held accountable for any area found to engage in excess cutting, and the cutting quota and timber output target of such areas should be reduced. The state-owned forest areas in the northeast and Inner Mongolia are the most resource-rich ones, and they should be treated as high priority areas in which excess felling and criminal offenses by persons involved in forestry should be prosecuted. Importance should be placed on eradicating typical cases involving excess felling and offenders should be dealt with seriously and prosecuted for depleting the forest. The control of “resources” must be improved by thoroughly investigating and dealing with those who recklessly issue, falsify, and sell woodcutting licenses for profit.

4. Wild flora and fauna, as well as wetland animals and plants, must also be strictly protected and put under greater control. The wild flora and fauna constitute an integral part of forest resources, while wetlands are an essential part of the ecosystem. Their protection involves preserving the diverse species and genes which are important for the maintenance of ecological balance and sustainable socioeconomic growth. All localities must further improve their protection measures, with emphasis on the management of wildlife habitats, nature reserves, and wetlands. The forest industry must collaborate with other industries, the commerce administration, and the justice department in order to monitor and supervise the markets, hotels, and restaurants engaged in the illicit buying and selling of wildlife so as to stamp out criminal offenses involving the depletion of wild flora and fauna. In the meantime, active steps must be taken to have strict control on illegal wetland occupation. The wetlands must be recovered and expanded by restoring the cultivated land to the lake and leveling the earth embankments to facilitate water flow.

5. The authorities must take action against criminal offenses leading to forest depletion in order to deter other serious cases from happening. Unplanned and indiscriminate cutting, timber robbery, looting, and arson cause great harm and undesirable consequences to the forest. To guard forest resources is a major political battle. Hence, forest departments at various levels must stem such crimes. It is crucial to forge some effective mechanisms for fighting these offenses. The forest department must seek active cooperation with the departments in charge of public security, industry and commerce, customs, supervision, environmental protection, prosecution, and justice so as to form a synergy to fight these crimes. For cases that lead to major consequences, the prosecution and justice department should be involved at an early stage to make possible the speedy solution of such cases.

6. Attention must be paid to forest fire management and pest control. Forest fire is fatal to the notion of “the strict management of forest,” while forest disease and pest disasters can be compared to “the smokeless forest fire.” All of them cause great harm to the forest. That is why it is necessary to implement to the letter the Regulations on Forest Fires Prevention and the Regulations on Forest Diseases and PestsPrevention and Control double the effort in forest fire and forest disease and pest prevention. It is also important to popularize the biological fire-prevention wall and the biological control of forest diseases and pests, as well as other effective measures. Remote sensing and other hitech devices can also be widely applied in order to enhance the monitoring system which can watch out for and forecast forest fires, forest diseases and pest damages, and resource consumption and growth with a view to mitigate the damage to the forest caused by disasters.

7. It is necessary to keep a close watch on timber processing and the timber industry. Timber processing and utilization constitute the biggest area of consumption of forest resources. All illicit logging, unplanned cutting, illegal purchase, transport and dealing in timber represent serious criminal offenses, and must be resolutely stopped. Authorized by the State, the forest department must have a clear picture and take stock of the timber processing business for the sake of law and order. For this purpose, time and effort must be spent to take stock of the local timber mills and have them registered individually. Those timber-processing enterprises and markets which operate unauthorized by the forest department and engage in processing timber of illegal origin must be shut down. And those who buy up illegal logged timber must be subjected to prosecution according to the law. A close watch must be made on timber transport, to detect illegal transport so that no illicit timber can get into the market.

8. Resource-control reforms must take place in order to work out a new forest management regime that can satisfy the needs of the new period. Stressing the importance of the “strict management of the forest” does not mean an inflexible policy. If not a single tree is to be cut, forest commerce will not survive. “Strict management” means managing and protecting the forest resources by law, and at the same time, reform the resource management system to respond to the demands of a socialist market economy and the diversified operation of the forest industry. To this end, the following tasks should be given priority:

• To streamline the state-owned forest management regime. Such an endeavor will satisfy the pressing need to enhance the protection of forest resources. In order to realize this reform, experience must be gained from pilot projects before gradually applied in a big way throughout the country.
• To institutionalize the system of subjecting to the leadership at the higher levels in forest management. All localities must enforce the State Council Document No. 2 (Guofa 2001) which provides that the forest management team must report to a higher-level authority—that is, the county-level teams will have to subject their work to the leaders in the forest department of the place where they are located, and to the leaders at a higher-level department. The nomination or removal of the head of the department concerned must be approved by the higher-level department as well.
• To reshape and reform the relevant forest management policy and system. With the introduction of the five major transitions and the implementation of the six key programs, the policy on forest-resource control needs to be adjusted and changed accordingly. The idea is to place ecological forests and those for public benefits under strict management. No flexibility can be considered when it comes to commercial logging in the nature reserves, nature preservation areas, ecologically vulnerable areas, and key shelter forests. A more lenient approach may be adopted with regard to fast-growing forest areas—a departure from the current practice—which will make possible an independent business operation that can meet the demands of the market. As the reform involves a spate of policy issues and covers a wide range of fields, it is quite delicate. We must therefore uphold the principle of “being cautious and active at the same time” in the steady march forward.

6.3.1.2 “Prudent spending” in forest management

“Prudent spending” means managing and spending project funds in a wise manner. Funds are the lifeblood of project development, while fund management is the crux of project management. Today, when the forest industry is diverting to ecological development and the six key programs are being implemented, it is important to underscore the need for prudent spending.

1. The huge investment in the six key programs is unprecedented throughout the history of forestry in China. Therefore, to manage and spend the money wisely is a big responsibility. Over the years, under-investment has been the basic problem hampering the growth of the forest industry. The Central Committee of the CPC and the State Council have now turned their attention to it, and committed a substantial amount of financial resources for ecological development. Tens of billions of yuan are earmarked for the six key forestry programs—a hefty sum and a heavy commitment. The large amount of money does not only mean that greater efforts must be made to develop the industry but it also means high expectations from the state and the people for the industry, as well as a heavy responsibility for the forestry staff. To manage and spend the funding well is itself a heavy commitment. It would be a great mistake if the industry fails to benefit from the state investment as a result of a wrong policy, damage, or waste because of a neglect of duty.

2. The unique way that the funds were obtained for the forest industry places a heavy responsibility on everyone to spend wisely. It must be realized that the State, cash-strapped as it is, increases its financial input by issuing treasury bonds. People from all walks of life subscribe for the bonds with their savings to support afforestation. This is their nest egg, and each yuan embodies the support they give to national development and the desire to improve the ecosystem for future generations. Careful management and spending of the money and the creation of a good ecosystem in China constitute the sacred duty of the current generation of forest protectors. Conversely, each yuan wasted or lost means a crime against the people. It is therefore, the duty of everyone to be prudent.

3. The importance of strict management over funds. Funds are the dynamic factor propelling the projects forward. Hence, good management of this hard-won money and raising its cost-effectiveness to push the key projects ahead is crucial. How can the money be spent wisely? In the context of the real situation in the forest industry and the practical needs of the key projects, the following requirements should be considered:

• Priority should be given to the planning of fund allocation so that a firm control over prudent spending can be exercised. To begin with, care must be taken in deciding on the projects to be implemented and the funding needed. Good decision-making will result in successful fund management. Wrong policies mean an irreversible setback for fund management. The overall plan for the six key programs has been approved by the State, and they represent the major development works at the state level. The overall decision has also been taken. Currently, what is needed is to decide in terms of the projects and funding how to consolidate the ongoing projects and link them to the proposed six key programs. It is necessary to plan the implementation of the six key programs at the provincial level, highlighting the key areas that need addressing and identifying the units that will shoulder the project development. In carrying out the project, there must be a comprehensive arrangement to integrate the various projects that are to be accomplished in a given county, and link the program to the annual plan, with each assignment targeting a certain hilltop or plot of land. No duplication of efforts and waste of money should occur. Moreover, no project outside the planned budget nor any project without an implementation plan should be included in the annual plan. In this way, a money-controlled mechanism can be set up right at the source.
• A sound fund-management system must be set up as a framework for “prudent spending.” Prudent spending, in a nutshell, means strictly abiding by the state rules and regulations. Therefore, system building is vital to secure the funds, since relying on humans in financial matters is risky. The use of funds must be regulated by means of a system so that there are rules to follow. The State has enacted one after another the Procedures on Financial Fund Management Earmarked for the Natural Forest Protection Project, the Rules on Accounting of Financial Fund Earmarked for Natural Forest Protection Project, the Procedures concerning Supplementary Fund Management Earmarked for Forest Ecosystem Benefits and other regulatory documents. The Regulations on Fund Management Earmarked for Key Ecological Projects in Forestry and the Procedures for Accounting of Funds Used on Key Ecological Projects in Forestry are in the pipeline. The fund management system should always exercise strict compliance which means the strict enforcement of law, rules and regulations without exception.
• It may be possible to have a money-controlled mechanism to create a legal channel for prudent spending. What is most important is to have the disbursement under control, which can be likened to a tap. If the tap does not work well, it can lead to problems resulting from loss of control. Prudent spending then becomes empty talk. Against the background of China's effort to establish a socialist market economy, it needs to actively pursue a new approach and new pattern of forestry fund management that meets the demand of such a market economy. Priority should be given to fund management over project management to ensure the safety and cost-effectiveness of the money spent. According to the practice of the World Bank forestry loan program over the years, an account settling system is an effective measure to ensure the specific use of the earmarked project fund and to upgrade its cost-effectiveness. Such an approach should be applied across the board.

To carry out the account settling, or reconciliation, there are three main aspects. First, the unit working on the project should use its own funds (the matching fund), and only seek reimbursement after the completion of the project (or at a certain phase of the project) when the accounts will be examined and approved. Failure entails it being done again or making corrections to enable the project to measure up to the standard expected before reimbursement is made. Such an approach creates a close link between the project quality and the use of the funds, between the project quality and the interests of the project workers, between the use of funds and the progress of the project. These three links contribute to the effective use of the funds. Second, an inspection of the project for approval must be carried out by several departments concerned. The planning department sees to it that the project is executed according to the plan; the financial department will ensure that the matching fund is sufficient and available and used as earmarked; the technical department will check the project quality to ensure that it conforms to the design (including field-leveling, seeding, planting, environmental-friendly, survival rate, preservation, etc.). Only after approval has been given and endorsed based on the inspection can the project unit apply for reimbursement. In this way, the smooth execution of the project can be ensured and made mutually complementary, stimulating and interacting, which could inhibit to a large extent the so-called favored project and laissez-passer type criteria. Third, the account settling has to be jointly checked by several departments. They not only have to check whether the project delivery is up to standard and each outlay is reasonable, but also be concerned about whether the project is progressing according to the plan and in a balanced way, so that they can take stock of the overall status of the project. In other words, this reimbursement method focuses on the project management—the basics, and use of fund management as a leverage to steer and coordinate planning management, technical management, technological management, and environmental management, with a view to ensuring the safe use and cost-effectiveness of the fund.

Afforestation involves much work and it is quite complicated. A single fund management and operation system cannot satisfy the needs of all the projects. Practice serves as the best teacher. Thus, while pushing ahead with the reimbursement system, there is a need to explore and consider other novel fund management approaches and methods, in particular the approaches to fund management for various types of ownerships, economic sectors, and operational mechanisms, so as to streamline the regime and practice for afforestation project fund management.

It is necessary to monitor and examine fund usage and apply safeguards rigorously. To ensure the safe use of funds means that efforts must be made to monitor and inspect the use of funds. Although the right project may have been chosen, the fund management system is sound, and the channel for the use of funds is orderly, this does not guarantee good fund management. Hence, intensified inspection and monitoring are essential. It is necessary to have a system whereby units can conduct self-checks and nip problems in the bud. This must be followed by strict action against all offenses and violations. These offenses should be brought into the open and the persons concerned given their due either through prosecution for administrative liabilities or brought to justice. The same is also true for those endangering the safety of the fund. Therefore, it is important to have an accountability system so that leaders who break rules and regulations can be held accountable. The State Forestry Administration has drafted a set of interim rules concerning the accountability of violators of project fund usage, to be strictly followed in future.

6.3.1.3 “Priority to quality” is essential

“Priority to quality” means giving priority to the high quality of the project. If the “strict management of forest” is the basic of forestry, and “prudent spending” the key to project management, “priority to quality” is the pillar and core of sound forest development. Without quality forests, all the talk about the hundred-year tree-growing campaign is meaningless. In this sense, quality constitutes the core of forest management in the new era.

Quality forests are what have been emphasized for years. However, for various reasons, the quality of the present forests leaves much room for improvement, although much progress has been achieved in terms of quantity. The new forests, in particular, are of low quality with poor survival and preservation rates.

Quality is what sets a country apart from others in terms of overall national strength and national competence; hence it will draw the attention of a growing number of countries. The United States, Japan, and Germany, as well as other developed countries have always emphasized quality, believing that it is the foundation of a strong economy and a policy that will help to build up a country. The reason behind the strong competitive power of their products lies precisely in their attention to the high quality. Throughout history and in the real world, the problem of lack of quality has caused horrendous accidents such as the collapse of high-rise buildings, falling of bridge spans, collapse of river dikes causing great casualties and even setbacks in war, the toppling of a regime, and the retrogress of a society. A nation that does not care about quality is a hopeless one; the same can be said of forest planting. No quality means no forestry development. In the history of global forestry development, it can be seen that quality was very much emphasized in Japan, Germany, and New Zealand. They have exhaustive criteria and technical operation regimes for each stage, from seedling through forest operation. Hence, the high-level development of their forest industry has laid a sound foundation for their countries.

In China, the Central Committee of the CPC has committed several billion yuan to the six key programs each year at a time when the country is having financial constraints. In the course of the fifty years of forestry practice, there have been examples of places where quality was neglected, which led to the stagnation or loss of what had been achieved, and even retrogress of forestry, which were painful lessons for all. In the new century, the aim is to achieve an ecological civilization, following the agricultural and industrial ones, and China is striving to build an affluent society through a civilized development approach, by developing production, encouraging a higher standard of living and a friendly ecosystem. Its forestry is also finding itself in a transition from an emphasis on timber production to ecosystem building. In such a new situation, sustainable socio-economic development not only requires forestry to deliver on quantity, but also on quality. To sum up, they have become the strategic goals of forestry which will make or break forestry. Quantity without quality is merely a number without substance. Speed with no quality is purely the pursuit of effect, and quality without efficiency is a waste of energy. Achievement without quality is a show-off. The quality issue should be present throughout the forestry growing process as the overall interest of forestry development is at stake. It is a technical issue, but it is also an issue concerning management, professionalism, and politics.

1. Quality is the lifeline and constant concern of forestry work. “Priority to quality” covers various aspects of forestry, including the quality of afforested areas, the quality of the six key programs, the quality of the forest industry, the revision of forest policy, system reform, innovation mechanism, scientific innovation, and institutional-building. Among all these issues, afforestation, as the first stage of operation in the tree-planting process, determines the quality throughout and therefore constitutes the basis and prerequisite of forestry production. Afforestation requires a long lead time and strong continuity. For the commercial forest, for instance, the collection of seeds and seedlings, tree planting, nurturing, and control take at least several years or decades before it can be logged. Throughout this lengthy process, the quality requirement looms large. Any quality problem would lead to the failure of the endeavor. This is the law of nature inherent in forestry production. Without quality afforestation, there can be no talk of forestry production.

2. Quality is a firm guarantee for the success of the six key forestry programs and the realization of a leap in forestry development. The six key forestry programs have no parallels in history in terms of scale, coverage, and investment. They are noble assignments entrusted to the people by the Central Committee of the CPC, which has high expectations of the Chinese people. The success or failure of the six key programs will have an immense impact on the realization of a leap in forestry development. Now that these programs have been jump-started, the number of afforested areas will no longer be a problem, but what really matters is their quality. If the quality is not up to standard, the goal of the projects will not be met even when there is afforestation. This means a tremendous waste of human, material, and financial resources. Therefore, it is important to take a responsible approach and always keep in mind that “programs of enduring importance call for quality above all.”

3. Quality is the basic lever available to free the forestry sector from stagnation and to raise the forest management level. Currently, China's forestry remains at a very low level of development with production lagging far behind other countries with developed forestry. There are numerous reasons for such a state of affairs, but the main reason is the neglect of quality, of afforestation particularly. The attention paid to quality in afforestation should be translated into an effort to raise production, to increase economic benefits, to change the backward state of affairs in forestry, and to radically upgrade the management level.

4. Quality is a logical option to adjust to the new requirements in forestry and to respond to the new demands of social development. In the new period, the key to all the “five major transitions” is the change in emphasis from timber production to ecosystem development. Such a transition manifests the change in the demands of society and one of the new demands is for the quality of afforestation. Among others in forestry development, the first priority must be the ecosystem to fulfill the need of the people for a harmonious ecological environment. The forest must not only be green, but also beautiful with diverse species. Forestry has also become a cutting-edge industry because of its superiority in the ongoing agricultural restructuring effort, as well as an essential source of the increased output of farm produce and farmers' income, which raises still higher the demand for forestry in terms of quality and effectiveness. With rapid economic development in China, there are diversified demands by the economy for forestry products. For example, the paper industry needs long-fiber timber, whereas the furniture industry needs expensive big-caliber timber. In other words, they expect much of forestry products. Following China's entry into the World Trade Organization (WTO), the fierce competition in the international market has led to an urgent demand for forestry development. Currently, the composition of tree species in forests is not ideal because the low-value and common varieties predominate, while the good-quality trees and new varieties, as well as internationally well-known species are few and far between. In addition, the problems of timber production accreditation, forest diseases, and pest control remain to be addressed. All the above problems can be resolved through an emphasis on high quality. Only by attaching importance to forest quality can the demands of socioeconomic development be met.

In other words, the success or failure of the afforestation effort and the future of forestry depend on quality. Thus, quality must be placed above everything else so that a healthy and sustainable development of afforestation can be ensured.

At present, quality control is governed by the theory on sustainable development—in other words, a brand new concept of quality needs to evolve, by setting up a quality criteria system, enforce a comprehensive quality control, strive to achieve a qualitative leap forward in the new period in order to ensure a dynamic, sustained, and healthy development of forestry in accordance with the requirement of “priority to quality” and in the light of the central task of improving the overall effectiveness of forestry. In-line with this concept, the following are basic requirements for quality control:

1. It is crucial to improve the effectiveness of forestry and carry out a target-based operation. Quality control in afforestation is aimed at maximizing the benefits with minimum input, that is, to eventually realize the highest benefits from the forest ecosystem and socioeconomic effectiveness. To maximize the effectiveness, it is essential to work toward a target. In the past, many afforestation projects shared a similar technical standard and operational pattern but did not have a clear goal or function. The so-called ecological forest operated without relevant criteria, and hence the poor ecological function. The so-called commercial forest was not run in a business-like manner, and therefore it did not generate economic profits. Such untargeted operations, in fact, are not helpful to the economy and need an overall transformation. A series of new approaches need to be adopted, such as determining a goal in the context of a diversified operation, having an effectiveness indicator system in working toward the goal, and having across-the-board quality control in line with this system. The aim of building an ecological forest should be to deliver ecological and social benefits. This can be done by planting or aerial seeding in an enclosed area so as to enable natural self-recovery. It should also have an ecosystem with three-dimensional configuration of trees, shrubs and grass, with multilayer plants of different ages, and a stable system structure and rich diversity. Commercial forests should set as their goal the pursuit of maximum profit through intensive operation, goal-oriented maintenance, and maximizing the output of wooded land to realize economic benefits. The dual-purpose forests should be managed in a scientific way in accordance with the different requirements and pursue goals to raise the stand quality, to have a mix of coniferous and deciduous trees in terms of composition and to create woods with trees of different ages to form a multilayer distribution in terms of space.

2. It is important to keep abreast with the times by accepting new quality-control concepts. With the implementation of the six key programs, China's forestry has entered a new historic period. The quality control of afforestation must be subject to reforms and streamlined in order to upgrade the quality of the forest composition. To be specific, attention should be paid to the density, survival rate, and conservation rate, as well as other factors, such as the composition of stands, variety compatibility, system stability, biodiversity, and the socio-economic factor. In addition, the quality-test-indicator system must be improved so that a change can be made from quantified indicators to comprehensive indicators. In afforestation, an indicator system that includes quantity, quality, and management, as well as other comprehensive benefits should be established. In addition, quality control measures need to be improved to enable a change from the purely technical measures to comprehensive ones—that is, to combine the technical measures, policy mechanism, regulatory regime, fund control, and work improvement. Last but not least, the conventional control system should be changed to modern management. Use should be made of contemporary scientific knowledge to put in place an afforestation quality information system to achieve effective control by monitoring the quality of the planted trees.

3. It is important to be pragmatic and to comply strictly with the law of nature and the economy, taking into account the local conditions. Afforestation is a biological project and the law of nature must be observed. In the past, there were painful lessons in this regard. These mistakes should never be repeated in the six key programs. The natural trend of the growth of trees should be respected, as well as the evolution of its ecological changes, by planting the right trees in the right places with no rigidity in the choice of shrubs, bushes, or grass. In the northwest, shrubs should be planted as widely as possible as they are drought-resistant and suitable for barren land. The carragana sp., for instance, can survive in any condition and has high ecological and economic value, and should be popularized on a larger scale. In the southeast, however, where the area is humid, advantage should be taken of the ample precipitation and the fertile earth to plant a large variety of trees, in particular the rapid growing ones. The local conditions should always be kept in mind when selecting trees; they can be planted, or afforested in an enclosed area by employing aerial seeding. In the rocky regions of the southwest, trees need to be planted in an enclosed environment to enable natural recovery to take place. On the high remote mountain ranges and in desert areas, aerial seeding is more practical in terms of cost-effectiveness and is beneficial to the recovery of ecological vegetation. This is where the switch from timber production to ecosystem building can find its expression. Afforestation is also an economic undertaking which must be approached in accordance with economic law, that is, cost accounting. The cost of afforestation needs to be linked to its effectiveness, incentives, and responsibility.

4. It is necessary to pursue modern and scientific management practices, with emphasis on quality control. A modern and scientific approach is already practiced in the manufacturing industry, where a high-quality product is not the result of quality inspection alone, but it encompasses the whole production process. If a high-quality product is to be obtained, not only is post-production inspection necessary, but there must also be control over every stage that could affect the quality of the production. Objectively speaking, quality control of afforestation in China remains at the initial stage of post-production inspection and statistical management. A focus on product control but neglecting process control is an outdated practice and it is necessary to introduce the concept of overall quality control. A project quality control system should be developed so that quality control becomes the responsibility of the entire staff. Quality control should cover aspects such as program planning, seed nursing, and specific operations such as forest maintenance and business management— that is, quality control throughout the entire process, involving all departments concerned. It should be the responsibility of the entire industry to eventually make overall quality control a reality.

How can this be done? The following steps must be taken:

• There must be strong organizational leadership to achieve quality afforestation. With the top leader steering the whole process. Since the six key programs are the responsibility of the government at various levels, good quality should form the center of such a responsibility. As afforestation is a monumental endeavor, the top leader should hold overall responsibility for it and he should emphasize quality himself. In addition, a responsibility system for quality should be established by which the quality of afforestation and the performance of cadres at various levels can be assessed. During their terms in office, anyone can censure a project when it is of poor quality. The job responsibility system should also be applied to the workforce as well, and used as a basis for reward or penalty following the inspection. Inspectors will be subject to a supervision system so as to prevent improper law enforcement. In addition, the capacity of the quality-control staff must be further enhanced. Humans are the essence of quality control. A weak enforcement team can bring nothing to the job. That is why the quality of these personnel is essential. They must be highly skilled to carry out quality control. Of course, the importance of policy and administration cannot be overlooked. By delegating responsibility and providing incentives, the forest staff will be more committed to long-term afforestation and become more aware of the need for good quality.
• There is a need to institute a technical standard system in afforestation. Setting a standard forms the technical basis of product quality. Zhu Rongji once pointed that if a country has an outdated technical standard, it will affect other areas of work. That succinct comment of his has highlighted the importance of such a standard. Thus, a technical standard in afforestation is the very basis of a quality forest. Currently, there are more than 600 state and local technical standards for afforestation, of which 45 are at state level. However, both the current state-level and professional ones have largely outlived their usefulness, as evidenced in their different requirements and purposes. Therefore, they need a thorough review as soon as possible. In-line with the basic requirement of the change in focus from timber production to ecosystem building for afforestation and a diversified operation, those standards needing fine-tuning, revision, or completely changed should be perfected, revised, or reenacted accordingly, while those no longer valid should be resolutely revoked. In doing this, all localities and firms should be given due guidance in stock-taking so that a complete and scientifically devised system of technical standards can be put in place, based on the State's technical, professional, and local firms' standards. Given China's entry into the WTO and its requirements, it is essential to adopt international standards. The technical standard that is devised must be accepted by all in order to avoid a situation where each unit has its own standards. Governed by the principle of uniformity in planning, screening, code-numbering and issuance after authorization, the scientific and technical department should provide guidance while those in charge of afforestation should coordinate with the parties concerned and work together to ensure these standards are accepted and used.
• It is important to intensify seedling monitoring and infrastructure development. As the Chinese saying goes, “A nine-story pagoda begins with the foundation and a thousand li (1 li equals to half kilometer) journey begins with the first step.” Seedling is the basis of afforestation and high-quality seed is crucial for high-quality afforestation and the success of the six key programs. At present, there are serious problems with seed production and distribution. Fraud in seed production and the use of inferior seedlings to pass for good ones are regular occurrences. Good seeds and seedlings are in short supply from the production bases. Because of the incomplete seedling infrastructure, the bases cannot produce sufficient high-quality seedlings for the six key programs. In the new situation, strict management of the seedling market is essential. The monitoring of seed quality is particularly important since ordinary people cannot tell a low-quality seed from a good one. Problems in this regard could cause irreparable damage. Hence, it is important to have strict management and tackle this issue at the root. Support should also be given to cultivating better seeds by enlarging the seed cultivation areas and building more seed woods and seed-collection nurseries. The various forestry departments should plan to produce the seeds of basic trees through licensed production by specialized units so as to ensure quality and the hereditary property of the seed. As regard to nursery stock, the various economic sectors are encouraged to do this job. As long as they have the productive capacity and technical knowhow, they can be granted licenses for production and business and engage in stock nursing and operation. The nursery stock market must also be reinvigorated by encouraging competition so that its quality can be improved. Strict quality control must be enforced with regard to the production, circulation, shipment, sales, and utilization of seedlings by means of vigorous law enforcement and market regulation so that seedling production and the legitimate rights and interests of the operators and users can be protected by law, and seedling production can be put on the right track by the rule of law. Furthermore, the infrastructure for seedling production needs to be built. Recent years have seen the state investing approximately 4 billion yuan in seedling projects. The various localities should give priority to infrastructure building in order to benefit from forestry as soon as possible.
• Science and technological support for afforestation must be enhanced. It is well-known that science and technology constitute a productive force in its own right and hold the key to the quality of afforestation. The first task is to popularize the use of quality seeds and strong seedlings, as well as strongly resistant varieties of trees, shrubs, bushes, and grass. Advanced techniques, scientific vegetation recovery, and good management should also be applied far and wide. As for the technical problems encountered in the development of the six key programs, they must be tackled at the earliest possible date regardless of the department and discipline barriers. In addition, some pilot areas need to be established, particularly typical ecosystem pilot areas with features such as hi-tech, good quality, and cost-effectiveness. Moreover, a meticulous plan for scientific and technical support for the six key programs needs to be worked out, in which the units delivering the scientific and technical support should be identified, the technical responsibilities defined, and a sound support system put in place. A preferential policy should also be drawn up using the projects as the platform to integrate production and technology so as to lure a wider circle of technical talents to the project development. The application of the advanced “3S” technology, as well as a complete afforestation quality information system will contribute to the realization of automation in the management of information data. This will facilitate data search for checking and comparison, as well as to monitor project development. Finally, various types of training for different levels of staff should be conducted on a large scale, so that the all-round competence of the development workers, technicians, and managing personnel can be upgraded.
• Greater effort should be made to standardize the afforestation quality-control system. Regulatory effort will be instrumental in upgrading forest quality and is vital to achieving standardized scientific, institutionalized, and legalized quality control. Over the years, a great number of rules and regulations have been enacted and these have laid a solid foundation for quality afforestation in the new period. However, some of them have become obsolete and irrelevant to the needs of the market mechanism. These should be subject to an across-the-board review so that a new control mechanism and new approaches can be devised for the six key programs—that is, a quality-control mechanism integrating the invitation to tender, supervision throughout the process, and account settling and reimbursement after the completion of the project. It is necessary to institute a legal and open bidding system without delay. Project management must be the rule of all the six key programs, and various afforestation companies, specialized teams, and individuals will be encouraged to participate as lawful entities in this endeavor through bidding and tendering, and contracting or sub-contracting. A guarantee of quality will give credibility to participating firms while the requirement for quality will obligate every participant in a bidding contract to ensure that a high quality is accomplished in afforestation. This step is to be followed by a supervisory system to prevent projects from being corrupted or badly executed. The supervisory unit is to be chosen through open bidding, or assigning by contract, with respect to an entire project or one of its components. In this way, the obligations and rights of the constructing unit, the supervisory unit, and the supervisory engineers are clearly defined. Work on the accreditation of the expertise of the supervisory units and their engineers must also commence. In addition, a regime to regulate the supervisory work is to be set up accordingly. Finally, an account-settling and reimbursement system needs to be enforced together with the above measures. The fund disbursement must be linked to the quality of the afforestation so as to have overall control over the quality. Not only should the reimbursement be conditional on the outcome of the final inspection, but also on the quality of each and every process—no quality, no payment.
• Stronger macro-control and strict accountability must be pursued. (1) There must be a close link between the quality of every process and the project determination, the task assignment, and fund disbursement. (2) If a unit at a county level fails to achieve the standard of afforestation, it may be considered as unfit and the size of the project may be reduced, or the unit may simply be disqualified from undertaking the project. (3) An annual performance evaluation and public censure system regarding the quality of afforestation need to be in place. The year 2001 saw the State Forestry Administration subject individual units to criticism and public censure for their poor afforestation efforts. The following year witnessed the recognition of three provinces and cities for their outstanding performance in afforestation for three consecutive years. They were given the highest honor, the “National Afforestation Award on High Quality,” as well as a monetary reward. In future, this practice of giving rewards and penalties will be institutionalized and perpetuated. (4) There must be strict accountability. In conformity with the State Forestry Administration on the Rules on Administrative Responsibility of Afforestation Accidents, those responsible for using poor-quality seeds and seedlings, submitting falsified afforestation quantity and quality reports, engaging in fraudulent practices when checking the quality for acceptance, and as a result cause major or exceptionally serious quality problems, will be severely punished or even prosecuted according to the circumstances. This should be applicable to everyone without exception. At the same time, a supervision panel from society can be considered to allow public opinion to be expressed.

The pursuit for harmony between the environment and development and the realization of sustainable development have become the strongest call of the times in the 21st century, while paying attention to and strengthening forest has become an irresistible trend in the world. By attaching unprecedented importance to forestry, the CPC and the State have pointed out the direction of development for China's forestry industry and assigned a historic mission and great responsibilities to forestry. At the same time, they have also provided strong motivation and a rare opportunity for forestry development.

The transition from timber production to ecological development is a historic one for forestry. It signifies that China's forestry has embarked on an entirely new course of development aimed at improving the ecological environment, characterized by striding development, with impressive forestry programs as its carriers and using major programs to bring about rapid development. Such a transition will inevitably have farreaching impact on China's eco-environmental development in the 21st century, as well as ensuring and promoting its sustainable social and economic development.

The direction is now clear and the blueprint has been drawn up. The heavy task has been assigned and the future lies ahead. This is a historic opportunity to exert efforts to push forward forestry development in the new era with a strong sense of responsibility to the CPC and the people for the mission entrusted.