Research | Pan Qi: The Enduring Effects of China’s Payments for Ecosystem Services: Short- and Long-term Industrial Transformations

Release time：08 January 2026

Following the 1998 Yangtze River floods, China launched the Sloping Land Conversion Program (SLCP) in 1999. As the world’s largest forest conservation project, it provides subsidies for farmers to convert cropland into forestland, yielding significant ecological results. More importantly, this project, involving land reallocation and labor transfer, happened to coincide with the core needs for efficient land use in the agricultural economy, making it a perfect sample for studying policy-driven agricultural transformation in developing countries.

Currently, academia does not lack research on the ecological effects and demographic impacts of PES policies, with some conclusions suggesting a mild impact on food production. However, the most critical question remains unresolved: Can such projects truly drive agricultural transformation? What is the underlying logic? What are the long-term economic impacts? This gap is directly related to the sustainable development of agriculture and forestry, as well as social equity.

To this end, Pan Qi from the School of Management and Economics (SME), The Chinese University of Hong Kong, Shenzhen (CUHK-Shenzhen), in collaboration with Wang Wen from the Division of Social Science at the Hong Kong University of Science and Technology (HKUST), published the paper The Enduring Effects of China’s Payments for Ecosystem Services: Short- and Long-term Industrial Transformations in the Journal of Environmental Economics and Management, a top international journal in environmental economics. The study systematically reveals the short-term and long-term industrial transformation effects brought by China’s ecological compensation policies, providing important insights into understanding the complex relationship between ecological policies and agricultural development in developing countries.