Working Paper

Economic Growth and the Natural Environment: The Example of China and Its Forests since 1978

Apr 3, 2008 | William F. Hyde, Wei Jiegen, Jintao Xu

This was created in partnership with Environment for Development .


China’s rapid growth over almost 30 years and its consistent forest data across 28 provinces provide an unusual opportunity to examine frequently discussed questions about macroeconomic and population impacts on the forest. The data support a theoretical argument for separating forests into four components, managed and natural forests administered by either state or private agents. Our regressions suggest 1) cautious optimism for a restrictive dual to Malthusian arguments about population—that is, declining rural populations may go hand-in-hand with forest recovery; and 2) more confident supportfor a variation of the environmental Kuznets curve for forests; that is, as incomes rise, the natural forest is first drawn down, then, when incomes rise above some level, the natural forest begins to recover. As incomes continue to rise, the managed forest eventually grows even more rapidly and offsets any continuing draw on the natural forest, with an aggregate impact of net expansion for all forests, managed and natural combined. The question that must arise is whether these environmentally satisfying results for China would be prove to be global—if comparable forest data were available elsewhere.