China Council for International Cooperation on Environment and Development (hereinafter refers to as CCICED) examined Sustainable Agriculture and Rural Development as the theme for its Annual General Meeting in 2004, and also reviewed environmental aspects of China's accession to the World Trade Organization. In all, five Task Forces presented their reports: Agriculture and Rural Development, Integrated River Basin Management, Non-Point Pollution from Crop Production, Protected Areas Management, and WTO and the Environment.
CCICED believes that China is seeking a new approach for sustainable development based on the concept of scientific development. China has obtained an impressive set of accomplishments, but it will need new frameworks to address the growing complexity, rapid pace, and disparities of development. CCICED supports China's policy of putting people first and believes that China should accentuate the quality and efficiency of its growth. Council Members therefore applaud the action taken at the 16th CPC Congress to address the needs of farmers and rural areas.
Sustainable rural development will depend upon difficult institutional and fiscal reforms that will reshape government's role, and on creation of livelihoods in non-agricultural sectors. Environmental improvement can be accomplished through such reforms.
The relationship of environment and development in rural areas is in need of a new, more comprehensive approach, taking into account ecological services, environmental impacts, resource scarcity, and biodiversity conservation needs throughout China. Such an approach is embodied in the idea of integrated planning and management—for rural development, river basin management, protected areas and for the very serious problem of controlling agricultural pollution.
China's commitment to WTO implementation is an essential means for rural environment and development improvements. China's growing role in international trade for natural resource products requires new policy development to ensure reliable access to raw materials and to international markets for its products.
Council highlights the following six general recommendations that have been discussed and adopted by 2004 Annual General Meeting of CCICED
I. Create a new rural development framework for a New Era
1. Reform rural fiscal system. First, there has to be a restructuring of fiscal management. Different levels of government need to have their responsibilities clearly spelled out. When an expenditure is mandated, there needs to be sufficient resources provided for it. Second, although there has been an increase in recent years of investment into the rural economy, more is needed, especially into poor areas that have few of their own funds. New funding should be provided to local governments in a way that will meet local needs and be managed by leaders that are subject to monitoring by the local population and who are operating in a transparent way. Third, officials also need to begin to change their roles. They do not need to be involved in many activities that are better provided by the private sector, such as trading grain, breeding hybrid maize and running fish farms. However, when officials are providing government services, they need to be fully supported.
2. Establish new partnerships between rural citizens and local government. Work should be done to help farmers in establishing voluntary and independent farmer associations and encourage the development of private enterprises. Moreover, permitting a broader range of rural financial institutions, while reforming existing ones, would be helpful to farmers and entrepreneurs in rural areas to expand investment.
3. Enhance the investment in education, health and other fields. There has been a lot of new investment into rural education in recent years. This has been welcome. There needs to be more. Above all, rural education through the ninth grade should be made free and investments in facilities and teachers should be raised. Improvement of human capital is key to reducing rural poverty and creating better conditions for rural out-migration. On the supply side, improved education is needed in schools using curriculum that will help young rural workers enter the off farm employment market. Adult training is needed to increase the productivity of workers that will be going to cities, providing labor for factories and construction, starting businesses and working in the service sector. Although a nationwide social security policy should be the long run goal, in the shorter run, increased support and promotion of rural health insurance is welcome and needed. It should be made more flexible, both in terms of where the insured can access to health services; and by offering different types of policies, offering a range of services for a range of prices. On the demand side, much can be done, including creation of more non-farm jobs by fostering labor-intensive industries, removing barriers to the hiring of migrants and by creating incentives for banks to provide financing to local enterprises and the self-employed.
4. Agricultural technology has been the engine of growth in land productivity in the past; it will continue to be in the future. China is underinvesting in agricultural research. Almost every other country in the world is outspending China as a percentage of agricultural gross domestic product. Public agricultural research investment needs to be increased from the current level of below 0.3% to a new level of 1% of total agricultural GDP. A similar public investment in agricultural extension also is needed. The funding should be used to encourage outstanding science and provided to the best scientists who are not duplicating the work of others.
5. Managing the rural environment
The government also needs to reassess its commitment to the rural environment. Because monitoring and environmental impact assessment for agriculture is limited, rural environmental management is not being effectively dealt with through existing rural development frameworks, and provincial-level environmental administrations generally are not up to the tasks demanded for modern rural environmental protection. Priorities need to be established on which problems deserve the full attention of leaders. When the decision is made, new institutions and more support are needed. Larger numbers of skilled personnel are required. Budgetary support is needed for fully-funding environmental and rural extension staff needed at provincial and local levels.
Some of the most transformative approaches for China's environment and development are not being promoted nearly enough in rural areas. Appropriate water-saving technologies are often not available and the incentives to adopt them are not in place. More effort is needed to promote the application of the many integrated farming systems, such as the use of economically-viable recycling and sustainable production methods. Another is the use of integrated land and water planning and management in order to safeguard the extensive range of natural resources and high value rural ecosystems.
II. A New Framework for the Nation's Food Security Policy
China should adjust its national food security policy and can do so by taking five steps.
First, China needs to shift emphasis from food or grain security to food grain security. In doing so, the national government should redefine its food security goals in terms of rice and wheat, the two major food grains.
Second, long term productivity growth need to be emphasized. While direct subsidies to farmers can have a positive short term effect the experience in many developed countries is that they also lead to environmentally negative effects. Moreover the returns to such investments are generally low while experience shows that investments in R&D, extension services, education, health, irrigation and other rural infrastructure, have high multiplier effects, especially in poor areas.
Third, there needs to be a shift in emphasis from aggregate national food security to household food security. China as a nation will not face a long term food security problem as long as it continues to promote productivity-enhancing technologies and improve its infrastructure. The main focus of food security policy should be placed on increasing the income, productivity and access to off farm employment of these households.
Fourth, China needs to develop rational land use policies. The government's role should be to develop transparent processes for land use decisions. Development should be done by the private sector and negotiations for land purchases should be made directly with rural residents. Farmers need clear rights to ensure that those that lose their land are fairly compensated. Titling would help.
China's Grain for Green Program cannot to be blamed for recent price rises and is not a threat to national food security. Although there may be reasons to reevaluate the future path of Grain for Green, it should not be halted for reasons of food security.
III. Implement a broader vision linking ecological and food security
China's achievements in agriculture have been impressive. Unfortunately, China's successes have a big environmental cost. The damage to ecosystems is growing, especially through overuse of fertilizers and pesticides. This results in Non-Point Source Pollution from crop production that contaminates lakes, rivers, groundwater and the coastal seas. The security of rural ecological services is threatened, to the detriment of both rural and urban areas. In the near term measures such as compulsory labeling and the use of smaller containers for pesticides and fertilizers could save farmers money and reduce pollution. An awareness raising campaign, for example using radio and TV, could be a cost effective way of getting the message across to farmers.
China should make full use of its comparative advantages in agricultural production and trade—easing restrictions on levels of grain imports, and promoting export of labour-intensive agricultural products such as vegetables and fruits. Consideration should also be given to the use of economic instruments to reduce excessive use of pesticides and fertilizers.
Biomass potentially offers new outlets for agriculture and energy consumption, for example straw pellets can be produced for use as fuel. Efforts also are needed, by relative institutions that are well-trained and have an incentive to promote environmentally friendly technology that will increase farmer efficiency and give advice that adapts dosage to local circumstances. A re-commitment, with improvements to enhance efficiency and quality of results, to programs such as Grain for Green and other ecological construction efforts on marginal agricultural lands will enhance both ecological and food security.
IV. Develop new ecological and economics-based national strategies for integrated water management and water quality
Water scarcity, flooding and water quality continue to hinder development. China needs to move from flood and pollution control to ecological management of its water resources. A new approach, the Living River, drawing on nature's restorative capacity, could help. Development and planning decisions should be based on environmental impact assessments including the valuation of ecosystem services as well as social and economic costs and benefits. Much can be done in major rivers such as the Yangtze, where lakes and wetlands have shrunk in size and grown shallow, and where agricultural chemicals and other pollutants overload natural purification capacity. CCICED recommends the adoption of the integrated river basin management approach to identify and protect ecological services, starting with the Yangtze River. In addition, there is an urgent need for a national strategy for addressing Non-Point Source agricultural pollution, especially for nitrogen content fertilizers and pesticides.
Economic measures to meet water scarcity, especially in northern areas, should include: an integrated approach to irrigation that will reduce unit consumption of water, allowing more agricultural production for less water; more authority granted to water management agencies; implementation of water rights for both ground and surface water; volumetric pricing and regulation of water; and progressive implementation of other reforms for water conservation in line with a sustainable water basin strategy that covers both water quality and quantity.
V. Modernize the management of China's protected areas
By designating some 18% of the nation as protected areas, China has placed itself among the most progressive nations. But the protected areas are not fully meeting their goals, either for protecting species, or in providing ecological benefits. Management is poor, with staff forced to find financial resources, sometimes at the expense of the biodiversity they are supposed to protect. Modern concepts of conservation biology, such as linking individual reserves by migration corridors, and recognizing the potential conservation benefits of surrounding agricultural lands, are not being applied. Relationships between local people and the managers of protected areas often are poor.
Finally, one of the biggest problems is the lack of investment and core support for management of the protected areas. Managers are given many duties and mandated activities, but often are not provided the fiscal resources that are needed to meet their obligations. Actions should be taken to correct this by providing sufficient core support and focusing the attention of protected area managers on conservation not enterprise management.
Protected areas should be categorized according to the internationally-recognized IUCN system. This can provide stricter protection for the most important areas. The new approach will require greater cooperation among various units of government in the establishment of boundaries and zoning. A system of protected areas should contribute in measurable ways to the provision of ecological services, for example from wetlands and natural forests. If so, improved funding for protection of these services can be justified.
VI. Use WTO membership to promote environment and sustainable development improvements throughout China's economy and in its international trade relations
China should take full advantage of its comparative advantage by trading its labor for natural resources that are more readily available in other countries. This will reduce the environmental pressures China is experiencing in rural areas and in its industrialization process. But it will require new linkages between domestic practices, for example in sustainable production and consumption, and international trade. CCICED recommends that China formulate a Green Trade Action Plan with policies that promote import of resource and energy-intensive materials and products and the export of labor-intensive products, services and technology-intensive products. The Foreign Trade Law should be amended to reflect the concept of sustainable development and to ensure the implement of Green Trade. China should develop a position for Doha Round negotiations that reflects Green Trade interests.
(Attached are policy recommendations from task forces)
Annex:
SUMMARY OF POLICY RECOMMENDATIONS FROM TASK FORCES
Agriculture and Rural Development Task Force
The remarkable reforms in China's rural areas, and the changes now being implemented to increase farmer's income, to enhance food security, and to protect environmental conditions in the vast areas of the countryside have become an integral part of China's push towards modernization. For the transformation to proceed smoothly without leaving a large share of China's rural population behind, a twofold rural development strategy is needed: A new framework for governing rural areas are needed to improve the performance of local government and increase the efficiency of policies; and large increases in investment are needed to improve the resource base of farm households so they will have the means to participate in China's economic development process. Meantime, a new shift in the way China manage national food security is warranted. Among the many policy recommendations made in the ARDTF report, we believe that the following policies will help define a new governing framework and promote sustainable agricultural and rural development.
Rural Fiscal Reform and Setting New Investment Priorities
China needs a healthy public finance system to enable government to provide an environment for development, including infrastructure and social services. The fiscal system sets incentives that guide the allocation of resources.
To meet this goal, there are several key areas for policy initiatives:
• Fundamental restructuring of the fiscal system.
• Reform the current tax system to suit each region of the country.
• Review critical services and make a clear division of responsibility between government and the private sector.
• Develop new systems of governance.
To implement these policy initiatives, several key actions are needed:
• The government needs to set priorities on services to be provided, and keep only the most important functions and fully fund them.
• Functions should be divided into those that are needed to be delivered by the government and those that can be provided by the private sector.
• Transfer more funds to the rural economy; on a per capita basis, China is only investing a fraction of what was invested into the rural economies of Japan and Korea and Taiwan during their periods of rapid growth.
• The current tax reform and agricultural tax reductions, although useful and successful in many places, are restricting development and income growth in others. Allowances are needed to reflect regional differences.
• Lack of transparency and accountability in local governance institutions is a basic problem in the management of fiscal resources and investment efforts.
Building Partnerships with Farmer Organizations
In an economy with millions of small holders and an emerging market economy, it is imperative that farmers are able to organize to facilitate adoption of new technology, access inputs and market their output. Key areas for policy initiatives are:
• Government support including legal support, financial aid, and technical services such as training of leaders and technical and marketing information services provision.
• New laws and regulations are needed to clarify the legal status of groups. Farmer Associations (FAs) need the ability to enter into contracts, act as legal guarantors and take loans. In addition to authority, new rules and regulations are needed that protect the membership from the leadership, including the way in which the leadership is selected and monitored.
• A catalyst is needed. The experience of FAs in other countries has shown that even when a favorable legal and regulatory framework exists, an independent catalyst is often needed to get FAs started, expand and perform effectively. Training of FA leaders is also critical.
Preparing for Migration Out of Rural Areas
Labor markets are the conduits of the forces of a nation's transformation from a rural to an urban society. Policies are needed to stimulate demand and encourage supply.
Key areas for policy initiatives on the demand side:
• Restructuring China's economy by encouraging labor-using industrial development and discontinue policies that favor capital-intensive expansion.
• Eliminating restrictions on labor hiring by removing barriers that prevent firms from hiring migrants.
• Providing financial services to finance local enterprises and self employment.
And, on the supply side:
• The 3 most important policies are: Improve rural education; improve education of rural migrants in cities; improve skills training of migrants.
• Improve the provision of rural health services and health insurance.
• Eliminate barriers in the cities that reduce the benefits of migrants and discourage farm families from moving to the city permanently.
Land-enhancing and Water-saving technologies
Successful transformation of China's economy has been based on agricultural growth. In the past three decades, agricultural growth has been remarkable. Continued growth will depend on new productivity-enhancing technologies and overcoming water constraints:
• Deepening agricultural research and extension reforms by reforming the agricultural R&D system into one that is modern and effective. Some research institutes need to be closed; others need to be commercialized; others need to be merged; others need to be expanded. Better coordination among research institutions at all levels is essential.
• China needs to substantially increase its investment in agricultural research and extension. The Task Force recommends that public agricultural research investment should be increased from the current level of less than 0.3% to 1% of total agricultural GDP in the near future. And at least a similar public investment in agricultural extension should be made. China should also continue to encourage the development of biotechnology.
• Critical steps are needed to manage north China's water resources: First, water savings in irrigated agriculture need to focus on reducing the water consumed per unit of crop production. Second, water management agencies need more authority to implement the difficult measures that are needed. Third, a system of water rights for both surface and ground water is needed. Fourth, after water rights are established, the investments are needed to allow for volumetric pricing and regulation of water. Finally, with all above measures, China can begin to raise water prices, promote new water saving technologies, and reform management institutions.
Experimenting with Rural Finance
Mobilizing and efficiently using financial resources is important for achieving high economic growth, especially in China where such funds typically are in short supply. China has made an effort to reform rural finance in the past, but the measures taken so far have not been successful. The reforms have been incomplete and rural bankers lack incentives to provide good service. Informal institutions have thrived across China, replacing formal banking channels. The key areas for policy initiatives are:
Building Partnerships with Farmer Organizations
In an economy with millions of small holders and an emerging market economy, it is imperative that farmers are able to organize to facilitate adoption of new technology, access inputs and market their output. Key areas for policy initiatives are:
• Government support including legal support, financial aid, and technical services such as training of leaders and technical and marketing information services provision.
• New laws and regulations are needed to clarify the legal status of groups. Farmer Associations (FAs) need the ability to enter into contracts, act as legal guarantors and take loans. In addition to authority, new rules and regulations are needed that protect the membership from the leadership, including the way in which the leadership is selected and monitored.
• A catalyst is needed. The experience of FAs in other countries has shown that even when a favorable legal and regulatory framework exists, an independent catalyst is often needed to get FAs started, expand and perform effectively. Training of FA leaders is also critical.
Preparing for Migration Out of Rural Areas
Labor markets are the conduits of the forces of a nation's transformation from a rural to an urban society. Policies are needed to stimulate demand and encourage supply.
Key areas for policy initiatives on the demand side:
• Restructuring China's economy by encouraging labor-using industrial development and discontinue policies that favor capital-intensive expansion.
• Eliminating restrictions on labor hiring by removing barriers that prevent firms from hiring migrants.
• Providing financial services to finance local enterprises and self employment.
And, on the supply side:
• The 3 most important policies are: Improve rural education; improve education of rural migrants in cities; improve skills training of migrants.
• Improve the provision of rural health services and health insurance.
• Eliminate barriers in the cities that reduce the benefits of migrants and discourage farm families from moving to the city permanently.
Land-enhancing and Water-saving technologies
Successful transformation of China's economy has been based on agricultural growth. In the past three decades, agricultural growth has been remarkable. Continued growth will depend on new productivity-enhancing technologies and overcoming water constraints:
• Deepening agricultural research and extension reforms by reforming the agricultural R&D system into one that is modern and effective. Some research institutes need to be closed; others need to be commercialized; others need to be merged; others need to be expanded. Better coordination among research institutions at all levels is essential.
• China needs to substantially increase its investment in agricultural research and extension. The Task Force recommends that public agricultural research investment should be increased from the current level of less than 0.3% to 1% of total agricultural GDP in the near future. And at least a similar public investment in agricultural extension should be made. China should also continue to encourage the development of biotechnology.
• Critical steps are needed to manage north China's water resources: First, water savings in irrigated agriculture need to focus on reducing the water consumed per unit of crop production. Second, water management agencies need more authority to implement the difficult measures that are needed. Third, a system of water rights for both surface and ground water is needed. Fourth, after water rights are established, the investments are needed to allow for volumetric pricing and regulation of water. Finally, with all above measures, China can begin to raise water prices, promote new water saving technologies, and reform management institutions.
Experimenting with Rural Finance
Mobilizing and efficiently using financial resources is important for achieving high economic growth, especially in China where such funds typically are in short supply. China has made an effort to reform rural finance in the past, but the measures taken so far have not been successful. The reforms have been incomplete and rural bankers lack incentives to provide good service. Informal institutions have thrived across China, replacing formal banking channels. The key areas for policy initiatives are:
• Promote comprehensive reform of the rural financial system by moving to more complete and far reaching RCC reforms and experimenting with new approaches that provide management teams with strong short and long-term incentives.
• Enact new laws and regulations to promote and formalize rural informal credit markets. Private banks should be encouraged. More flexibility is needed on interest rates and on the number of products and lending practices.
• Enhance micro finance programs by allowing localities to experiment with their own forms and removing regulations that keep NGOs from operating and expanding their operations. Micro-finance units should be allowed to take deposits.
A New Framework for the Nation's Food Security Policy
China has a large resource base and a solid record of productivity that has ensured national grain and food security. Since 1983 China has been a net food exporter. In recent years it has become a net grain exporter. China has the ability to import. From a food security point of view, China is among the most secure nations in the developing world. It is time to develop new food security priorities:
• Shift emphasis from food or grain security to food grain security. The national government should redefine its food security goals in terms of rice and wheat, the two major food grains.
• Shift emphasis from aggregate national food security to household food security. While we do not believe China as a nation faces a food security problem, there are still millions of households that live under the poverty line. The main focus of food security policy should be placed on these households. The measures needed to make these households food secure are mostly consistent with measures that are needed to increase income, promote employment and make households more productive.
• Emphasize long term productivity growth rather than short term subsidy programs. The returns to direct subsidies are not appreciated by farmers in the long run and the returns to such investments are generally low. Instead, investments in R&D, extension, education, health, irrigation and other rural infrastructure, have been shown to have high multiplier effects, especially in poor areas.
• Balancing land uses between agriculture and non-agriculture. The nation needs to develop rational long-run land use plans. To date, the conversion of cultivated land to non-cultivated uses has not significantly affected grain prices, domestic availability or imports. Compared to other nations in the world, China's rate of cultivated land conversion is low. The future of China's development is dependent on industrialization, thus there will be high demand for further conversions. Stopping conversion will hurt growth. The government's role should be to develop transparent processes for land use decisions. Given these processes, development should be done by the private sector and negotiations for land purchases should be made directly with rural residents. Farmers need clear rights to ensure that those that lose their land are fairly compensated. Titling would help.
• China's Grain for Green Program cannot to be blamed for recent price rises and is not a threat to national food security and should not be halted for reasons of food security.
• China's grain reserve management system requires additional reform to address unclear rules for management and release of grain. The lack of transparency contributes to variability in grain pricing and creates chaos in the market. Rules for purchases and sales need to be open and transparent.
Integrated River Basin Management (IRBM) Task Force
The main ecological and environmental problems China facing are becoming basin-wide issue. Despite the significant investment in engineering of river basins, water scarcity, flooding, water quality, shrinking of lakes and wetlands, loss of biodiversity continue to hinder economic development, and will jeopardize China's development achievement in the future. A new approach, ecosystem-based integrated river basin management (IRBM) will be an effective way to solve these problems and restore the Living Rivers in China, through which to maintain the river health, ecosystem services and human welfare.
The Task Force recommends that the Chinese Government should take the following priority actions in a short-term:
• Integrating IRBM into the next national five-year plan (2006-2010) and developing river basin Master Plan for the large river basins.
• Evaluating, modifying and improving the synergy between existing IRBM related laws and regulations such as: The Environmental Protection Law, the Water Pollution Prevention and Treatment Law, the Soil Erosion Control Law, the Flood Control Law, the Fishery Law and the National Reserves Management Regulation to ensure the IRBM in the term of legislation.
• Establishing of the IRBM commission at the national level, which consists of National Development and Reform Commission, Ministry of Water Resource, State Environment Protection Administration, to coordinate regulations, policies and planning; Establishing of overarching river basin commissions for all large river basins; Establishing of river basin authorities based on provincial or municipal government in medium river or tributaries of large rivers to improve the institutional arrangement for IRBM.
• Specifically for the Yangtze river basin, developing Regulation for Water Resource and Environment Protection, developing Master Plan for ecosystem-based IRBM in Yangtze Basin and setting up the Yangtze Development and Conservation Forum to improve the wide cooperation among and participation of major stakeholders and the public.
Non-Point Pollution (NPP) Task Force
Agriculture is becoming the main source of water pollution in China, as industrial and urban wastes gradually are reduced. Both point source (especially intensive livestock production wastes) and non-point source (from crop production) pollution are important, but NPP is the more difficult to control. NPP could become the greatest threat to water quality in China and contributes to atmospheric pollution as well. The main constraint is not the lack of scientific knowledge about NPP, or the lack of control technologies. The key issue is the absence of policies, appropriate laws and institutional mechanisms to help farmers learn about NPP and how to minimize the problem; and the lack of incentives to adopt available technologies and management practices.
Develop a national strategy to control non-point pollution.
Without a national strategy for NPP there will be only limited progress on reducing the pollution impacts of crop production because the required actions involve several ministries and a range of public bodies. CCICED recommends development of such a strategy as an urgent matter. A national NPP control strategy should be formulated in the context of IRBM and actions to limit the overuse of irrigation, global concern for greenhouse gases (China contributes perhaps 1/3 of the world's nitrous oxide emissions from fertilizers used in crop production), agricultural policies, and better control of point sources such as village and town sewage and wastes from intensive animal production. The NPP strategy will need to cover several important topics: improved advisory services to farmers; better environmental assessment and monitoring to measure risk to human and ecosystem health from fertilizers, pesticides and manure; application of circular economy within rural areas; the potential to move some high input agriculture such as grain production to areas where there is a lower risk from NPP; and awareness-raising of the damage caused by overuse of fertilizers and other chemicals.
Introduce new fertilizer and pesticide laws and regulations
The existing laws, regulations and incentives encourage or fail to discourage over-use of chemical inputs. They need to be modified or replaced with regulations and institutional measures that promote Good Farming Practices regarding dosage, timing and method of application of fertilizers and pesticides. Such measures need to be supported by improved rural education and extension services that make farmers aware of the savings associated with reduced use of these chemical inputs. The attention to NPP needs to be complemented with stronger controls and incentives for reducing discharge of human and livestock wastes into waterways and better treatment of manure and human sewage.
Promote technology improvement for agronomic efficiency, human health and environmental safety
There can be a triple win for China and her farmers from controlling NPP from agricultural chemicals. CCICED recommends three mutually supportive actions. A national campaign to promote adoption of proven technologies for reducing NPP; Research and development of new technologies appropriate for China's circumstances; and third, the launch of pilot studies to determine optimal practices for NPP control, using the existing experience of eco-counties and model villages as the base for testing revised policies and practices.
Protected Areas Management Task Force
The future of China depends upon maintaining healthy natural ecosystems. Natural ecosystems ensure the nation's supplies of freshwater, energy and nutrients, crop pollination, pest control, diverse genetic resources, carbon storage, flood control and many other ecological services. Protected Areas are designated for their special ecological and other values, and therefore should be managed in a fashion that delivers long-term benefits to people. It is a remarkable achievement that China has been able to designate over 18% of the country as Protected Areas.
Such areas need to be managed in the context of the overall landscape and economic development. But China's current system of Protected Areas is not delivering sufficient benefits. They are failing in their prime purpose of conserving species and representative ecosystems and delivering ecosystem services. Management and funding are only weakly linked to the full range of protected area functions. Indeed, current legislation and management practices lead to conflicts with local people, poor enforcement and little or no coordination with other economic sectors. Protected areas should take various forms rather than only limited to natural reserves.
Modernization of China's Protected Area System is needed in order to make it fully representative of the country's wild species and ecosystems and for their beneficial ecosystem functions. A modern flexible and effectively managed system will provide sustainable benefits to local people and the whole nation.
Establish a comprehensive legal framework for Protected Areas
CCICED recommends new framework legislation under which more specific legislation (including the proposed nature reserve law) and regulations could be included. Protected Areas need to be categorized according to the internationally recognized system devised by the World Conservation Union (IUCN). Management objectives could then be specified according to needs and feasibility appropriate to the category.
Design a new approach to a National Protected Area System
China needs a Protected Area System that takes into account the whole landscape. A range of protected areas categories could then be designated as needed, including strategic corridors that preserve important ecological linkages, changes in boundaries and zoning. The Protected Area System Plan should become part of Five Year Plans at all levels of government. China also needs an alliance among government units to ensure the integration of protected areas with other land uses and development planning, especially with sectoral ministries. This alliance could take the form of a committee of the State Council. Similarly, provincial Environmental Committees should supervise and evaluate Protected Area plans and performance, including that of the staff which is linked to competence standards and professional careers.
Implement innovative financing mechanisms more clearly linked to delivery of ecosystem services
CCICED recommends revamping of existing public funding of Protected Areas to place greater emphasis on payments for sustainable ecosystem services and less on extractive use and infrastructure development within such areas. The new approach should allow for payments from both within and outside of China. It is recommended that quality assurance be established to prevent inappropriate initiatives such as designation of non-priority sites, and funding for incompatible activities.
Take measures to ensure local people's benefit from living near Protected Areas
Protected Area managers need to have the means both to consider local socio-economic and cultural impacts of plans and to ensure local people are involved as stakeholders. Special attention should be given to the plight of local people whose relinquishment of use of Protected Area lands and resources has led to their impoverishment. The Protected Area managers require skills development, a proper career structure, and assured salary funding that is not dependent on exploitation of the Protected Area in order to carry out their work with maximum positive impact for local people.
WTO and the Environment Task Force
China's accession to the World Trade Organization (WTO) was the most important development in trade policy in recent years for China itself and the WTO as a whole. The impact on China's economy has been profound. Because of the numerous commitments undertaken in its accession, the consequences have been felt throughout China's economy. They have probably been stronger and more widespread than those experienced by any country following the conclusion of other trade negotiations, including the impact of the Uruguay Round.
The environmental impacts of China's WTO accession also have been substantial. They have been particularly pronounced in the six sectors for which the Task Force on WTO and Environment (TFWE) has undertaken environmental impact assessment: agriculture, forestry, marine aquaculture, automobiles, energy, and textile. These studies represent the most comprehensive assessment of the environmental consequences of trade liberalization policies undertaken by any country to date.
Develop an agriculture policy that integrates environmental and sustainability considerations. WTO accession offers an opportunity for China to gradually shift its policy focus from food self-sufficiency to food and environmental security.
• Take advantage of increased trade opportunities provided by WTO accession; favor the import of environment and resource-intensive products, such as grains; and encourage the export of labor-intensive products, such as vegetable, fruits and poultry. Efforts also should be made to promote organic and green food production and trade development for niche markets abroad; to provide support for farmers to switch from resource-intensive agriculture such as wheat growing to labor-intensive agriculture such as animal husbandry and horticulture.
• Ensure that measures taken to provide support to farmers' incomes, rural communities, and agriculture environmental protection are fully consistent with the provisions of the "green box".
• Provide necessary support to gain greater access to international markets. Many Chinese exports—such as poultry, fisheries products, tea and vegetables— possess numerous competitive advantages but increasingly encounter more stringent environmental and health standards in developed country markets. China needs to help Chinese exporters cope with the difficulties they face, through timely information with respect to foreign environmental requirements and testing procedures. It also needs to strengthen China's own standards whenever possible, and reinforce its own inspection and quarantine practices to assure foreign customers that China's food exports are safe.
Contracting and expanding sectors will experience totally different environmental consequences and therefore need to be treated differently by the government. This requires that the government develop environmental policies and regulations accordingly.
• In the growing sectors, the government will need to introduce more stringent environmental regulations to improve environmental quality or to improve international competitiveness. For example, the price of automobiles in China is due to drop dramatically as the terms of China's accession require the removal of major duties on car imports. This provides a unique opportunity for China to implement higher emissions and fuel efficiency standards without raising automobile prices.
• In the contracting sectors, measures will be required to ensure that these sectoral adjustments will not cause unacceptable environmental harm. The forestry sector will require close monitoring of forests and forestry policies to make the necessary adjustment whenever needed. This review should include domestic policies and conditions, as well as import and export policies and forests in other countries liable to be impacted by dramatically increasing Chinese imports of their products.
Actively seek access to global resources while effectively managing all impacts associated with China's import of natural resources.
• Closely monitor the environmental impacts of China's imports of natural resource commodities.
• Raise environmental standards for the manufacturing of commodities that are highly polluting domestically to avoid shifting of pollution toward China, particularly those that are re-exported.
• Pursue dialogue, cooperation and green-procurement where possible (such as green forest certification) to reduce potential environmental impacts of Chinese importing on supplier countries and build the international image of China as a responsible consumer.
• Participate in global environmental regimes and contribute to the Doha negotiations.
Promote sustainable development through trade.
• Conduct environmental impacts assessments of current import and export policies including impacts outside China; through trade development make green trade as necessary means to promote sustainable development.
• Amend the Foreign Trade Law to reflect the concept of sustainable development and ensure the implementation of the green trade policy.
• Actively participate in the Doha Round negotiations and develop a position that reflects China's green trade interest in the trade and environment negotiation.
