Holistic Approach to Meeting the PRC’s Agriculture Challenges

While investments in agriculture together with institutional reforms have secured a stable food supply in the PRC, food security remains a concern due to productivity and environmental challenges.

Water availability is one of the biggest constrains to agricultural development in the PRC. It is aggravated by climate change that leads to more frequent droughts and floods, causing reductions in grain output.

An ADB project increased food security and boosted agricultural productivity through an integrated approach of infrastructure, institutional and capacity development.

The People’s Republic of China (PRC) feeds the largest population in the world, a task fraught with many challenges. While investments in agriculture together with institutional reforms have secured a stable food supply, food security remains a concern due to productivity and environmental challenges.

Water availability is one of the biggest constraints to agricultural development in the PRC. It is aggravated by climate change that leads to more frequent droughts and floods, causing reductions in grain output. About a decade ago, average irrigation water use efficiency in the country was only about 40%, and soil fertility was degraded in many regions due to intensive farming techniques over decades. In addition, there was limited institutional capacity to manage the advanced irrigation infrastructure that exists, and a lack of mechanized plowing and harvesting equipment.

It was against this backdrop that the Asian Development Bank (ADB) approved in 2012 a $200 million loan for the Comprehensive Agricultural Development (CAD) Project to support the PRC’s CAD program to promote a holistic approach to enhance food security. Five provinces (Anhui, Heilongjiang, Henan, Jilin, and Yunnan) and one autonomous region (Ningxia Hui Autonomous Region) were selected for the project.

Boosting agricultural productivity

“The project was designed to use an integrated approach to increase agricultural productivity through developing improved irrigation and drainage infrastructure,” says ADB Senior Natural Resources and Agriculture Specialist Shingo Kimura. “This was combined with institutional and capacity development to promote effective operation and maintenance of irrigation and drainage infrastructure, and to introduce modern agricultural technologies.”

At the preparation stage, the project team gathered extensive inputs from provincial and national government officials as well as villages, including women and ethnic minorities.

“A well-informed consultation process along with participation and involvement in subproject identification and implementation ensured the effective operation and maintenance of improved infrastructure upon completion,” says Mr. Kimura.

Over the six-year implementation period, the project improved drainage over more than 100,000 hectares (ha), developed extensive surface water and groundwater irrigation systems, and introduced water-saving technology. By adopting practices such as land leveling, soil testing, appropriately applying fertilizers, returning crop residue to farmland, and reducing salinity, the project improved soil quality in about 43,600 ha of land, while repairing almost 2,000 kilometers of roads, and providing tractors and plant equipment to farms.

Reducing rural poverty

It also increased agricultural productivity and irrigation water use efficiency in the project area, with grain yields increasing by 53%, cash crop yields (excluding vegetables) by 353%, and vegetable yields by 35% in the project area between 2010 and 2018.

“The project supported water-saving irrigation and conservation agriculture, which became more relevant under the PRC’s new policy orientation promoting sustainable agricultural production,” says ADB’s Director of Environment, Natural Resources, and Agriculture in East Asia Tom Panella. “It was well aligned with the PRC’s 12th and 13th Five-Year Plans, which highlighted the importance of food security, agricultural productivity, and water resources management.”

Further, the project contributed to reducing rural poverty through increasing both farm and non-farm income opportunities. It had a positive impact on women particularly by boosting their participation and representation in local water and farmer associations, increasing employment opportunities, and improving technical capacity in modern agricultural production and irrigation. The project created 24,263 jobs during implementation and 2,284 employment opportunities during operation of the facilities, with women taking up half of the new jobs created.

Ethnic minorities, which comprise about 60% of the population in the project area, benefited through training, job opportunities, and improved farmland. They comprised 60% of farmers who received training and almost 70% of those who received employment under the project.

“This project has achieved remarkable results despite the complexities of effectively managing 68 counties scattered around 6 provinces,” says ADB Country Director in the PRC Yolanda Fernandez Lommen. “The strong coordination between ADB, project implementation offices, and provincial and county governments was a key factor behind the success and smooth implementation of the project.”

Grain Yields5.74 ton/ha8.76 ton/ha53%
Cash Crop Yields1.90 ton/ha8.60 ton/ha353%
Vegetables25.2 ton/ha34 ton/ha35%
Irrigation water use efficiency – surface systems40%55% 
Irrigation water use efficiency – groundwater systems60%76% 
Average per capita income of farmersCNY3,614CNY9,675168% (in constant 2010 values)
Poverty incidence in project villages12.3% (2013)1.5% 
 Graham Dwyer

Graham Dwyer

Principal Communications Specialist, Department of Communications, ADB

This article is reproduced from Asian Development Bank.

How Rural Pensions in the PRC Impact Older Persons’ Well-Being and Their Families

Research indicates that the PRC's rural pension scheme increases financial independence and geographic flexibility in intergeneration families. Photo credit: ADB.

In the People’s Republic of China, a study shows pension income in rural areas improves economic independence and health of older people.


Establishing sustainable social pension systems in low- and middle-income countries is an urgent task as the growth rate of the senior population in these countries substantially exceeds that of high-income countries (Edmonds et al., 2005). Analysis of the People’s Republic of China’s (PRC) new rural pension scheme, the world’s largest social pension program, offers a robust case study of the impacts of pension benefits on older persons and their extended families in developing countries. In particular, our study examines whether increased income for aging parents relaxes the overall credit constraints for households, especially those in poor rural areas, thereby facilitating more independent living for pensioners and better access to crucial services including medical care.


Like many developing countries, the PRC’s population is aging rapidly. By 2050, more than 25.6% of its population is expected to be over the age of 65. Moreover, stringent family planning policies during the last 3 decades have contributed to a dramatic increase in the ratio of relatively low-income senior dependents, further intensifying the pressure on a shrinking working-age population to take care of their parents. Older rural residents living in less developed regions are particularly disadvantaged. In 2010, the poverty rate for rural people aged 60 and above was as high as 22.3%, compared to 7.8% for the rural population in the PRC as a whole (Cai et al., 2012).

The PRC launched the rural pension scheme in 2009 to alleviate some of these pressures and better provide for the basic needs of aging residents. The program now covers almost all counties with over 400 million people enrolled. Considering its scale and the large disparities between rural and urban areas as well as across regions and age cohorts, this pension scheme provides a unique case study of the heterogeneous impacts of pension income.

In analyzing these effects, three questions were asked:

  • Does more income for aging parents facilitate more independent living and less co-residence with adult children, particularly adult sons?
  • Does pension income facilitate better access to and use of crucial services, such as medical care for seniors?
  • Does pension income change pecuniary and nonpecuniary transfers between older people, their adult children, and their grandchildren?

To answer these questions, we examined two detailed household surveys: from Guizhou province, which is one of the poorest areas of rural PRC, and from the relatively well-off Shandong province. In both cases, we tracked each adult child’s living arrangements and demographic information regardless of whether the adult child is counted as a household member. Using both sets of comparative data allowed us to conduct stronger empirical tests.

Taken together, the research design disentangles the effects of pensions from other age-related factors shaping intergenerational relationships, thus contributing to the growing literature on the specific mechanisms underlying impacts of the pension scheme.

Our findings indicate that the pension scheme significantly reduces intergeneration co-residence, promotes pensioners’ consumption of healthcare services, and weakens (but does not supplant) nonpecuniary and pecuniary transfers across three generations. All of these impacts of the pension scheme exhibit far greater magnitudes in the locality with lower income, Guizhou, than the locality with higher income, Shandong.

In looking at intergeneration co-residence, we observed a perceptible reduction in adult sons’ co-residence with parents around the cut-off age for pension receipt, with a larger and more significant effect for Guizhou than for Shandong. Similarly, there is a more salient decline in co-residence between grandchildren and grandparents for Guizhou than for Shandong. Thus, pension income does appear to relax credit constraints most significantly for the poorer rural area and is associated with purchase of greater living space (and privacy) across three generations.

Moreover, the rural pension scheme appears to reduce some nonpecuniary transfers between senior parents and adult children and grandchildren, such as being assisted by children when ill, and to weaken pecuniary transfers between generations. One interpretation for the finding is that pensioners transfer less money to adult children and grandchildren after household division, especially in Guizhou, and that they instead spend the money on hired services. Another interpretation centered in household division is that separation between older people, their adult children, and grandchildren decreases the level of utility from companionship felt, thereby reducing a grandparent’s monetary investment in a grandchild. It could also be the case that parents’ pensions contribute to adult children’s rising migration rate and off-farm employment, thus increasing children’s economic resources and decreasing the demand for transfers from grandparents. In any case, the introduction of pension incomes appears to increase the economic independence of older people.

In addition to these multi-generation impacts, pension receipt is associated with greater healthcare consumption among pensioners or greater perceived confidence in consuming medical services when needed. In rural PRC, despite universal coverage by basic health insurance schemes, financial difficulties often prevent patients from receiving or continuing expensive medical treatments. Our findings suggest that pension benefits may help to alleviate this problem by promoting confidence in ability to pay for necessary medical services, positively impacting both the health and well-being of aging patients in rural areas and allowing family units the option of investing economic funds previously allocated toward the medical needs of senior parents into alternative investments, such as education, additional job training, or relocation.

Policy Implications

Throughout the developing world, adult children often provide the most important form of support for their aging parents, both through pooling of household public goods in co-resident living arrangements and other nonpecuniary support. Pension payments increase older people’s economic resources, which may promote their economic independence and enable adult children to choose to live in a separate home in the same village or to move further away in pursuit of education or work. Our analysis of the PRC’s pension scheme shows that providing pension income to older persons in rural areas may

  • reduce intergeneration co-residence, thereby creating additional economic and migratory opportunities for adult children and grandchildren;
  • weaken, but not eliminate, the web of nonpecuniary and pecuniary transfers across three generations, increasing the economic independence of older persons and allowing for immediate family to reallocate economic resources toward options, such as schooling and work opportunities; and
  • increase access to medical services among older persons in rural areas, improving their personal health and well-being and reducing the burden of medical expense coverage by extended family.

Our findings help strengthen the rural pension scheme program and thus improve the well-being of older persons and their families across regions in the PRC. They also offer insights into the feasibility of replicating similar schemes in other developing countries that are facing similar demographic challenges.

The complete study is co-authored by Karen Eggleston (Stanford University), Xi Chen (Yale University), and Ang Sun (Central University of Finance and Economics, People’s Republic of China) and is published in the November 2018 issue of The Journal of the Economics of Ageing.


E. Edmonds, K. Mammen, and D.L. Miller. 2005. Rearranging the Family? Income Support and Elderly Living Arrangements in a Low-Income Country.The Journal of Human Resources, 40 (1). pp. 186–207.

F. Cai et al., eds. 2012. The Elderly and Old-age Support in Rural China: Challenges and Prospects. Washington, D.C.: World Bank.

Population Division of the Department of Economic and Social Affairs of the United Nations Secretariat. World Population Prospects: The 2010 Revision.

X. Chen, K. Eggleston, and A. Sun. 2018. The Impact of Social Pensions on Intergenerational Relationships: Comparative Evidence from the People’s Republic of China. Journal of the Economics of Ageing. 12. pp. 225–235.

 Karen Eggleston

Karen Eggleston

Deputy Director, Shorenstein Asia-Pacific Research Center, Stanford University

This blog is reproduced from Development Asia.

Natural Capital Investment Is Key to Rural Recovery and Resilience

Our experience during COVID-19 has demonstrated the resilience of agriculture and its enormous value in driving economic recovery.

The harsh health and economic impacts of the coronavirus disease (COVID-19) pandemic are being felt across developing Asia. As the region moves toward recovery, agriculture presents a major route to reducing poverty and food insecurity compared to other sectors.

Prior to the pandemic, agriculture accounted for a significant part of the economy for many emerging countries—7.7% in China, 12.7% in Indonesia, 7.3% in Malaysia, 8.8% in the Philippines, 8% in Thailand, and 14% in Vietnam. Since millions of rural migrants lost their jobs in cities and returned to rural homes for their livelihoods, rural development is now becoming vital to post-pandemic recovery. As experiences in Thailand and the Philippines have shown, investments in agriculture can help revive food production and create jobs following a crisis, and enable rural communities to recover.

Productive and sustainable transformation of agri-food systems is a key element in the successful transition from middle- to high-income status. This is always challenging. But as countries push for economic diversification, expand the use of modern technologies, and establish effective management of food supply during this pandemic, many countries in developing Asia are well-equipped to overcome the challenge.

In the past, farmers had few incentives to pursue sustainable agriculture and protect natural assets without incurring significant cost or loss of income. This was because of the disconnection between the retail price of food and the cost of production and distribution reflecting implicit environmental costs.

But now East Asia and developing countries in the Mekong have started introducing natural capital accounting such as gross ecosystem product (GEP) to attach a monetary value to nature, and applying eco-compensation or payments for ecosystems to provide incentives for farmers to change their behavior. These are critical to sustainable transformation of the agricultural value chain, and can be replicated to other regions including central and south Asia.

In February 2021, China unveiled a new government body for the promotion of rural vitalization as the world’s most populous country shifted its policy focus to further enhancing natural capital investment and boosting rural areas. The same week, China’s top leaders outlined priorities and tasks for the next-stage of reform at a key meeting, which stressed efforts to explore a market-based, sustainable way to realize the value of ecological products.

All of these actions are a move in the right direction for a rural recovery, while protecting the environment and natural resources. The wider region could consider how to incorporate similar approaches in their recovery plans.

Looking forward, several opportunities exist to continue the drive toward a more resilient and sustainable recovery in rural Asia.

Agribusiness marketplace. ADB is working with its developing members to establish an agribusiness marketplace on a digital platform. This platform will integrate modern advanced technologies, such as the Internet of Things, artificial intelligence (AI), big data, cloud computing, and blockchain, to digitalize agriculture value chains. This will reinforce food security and strengthen utilization, preservation, and improvement of natural capital. It will also help in solidifying transparency and traceability to improve food safety. At this marketplace, stakeholders of different sizes will have better channels to exchange information, sell products, arrange logistics, obtain financing, participate in training, and acquire third-party services, such as branding, certification, new product design, as well as professional assistance in legal, contracting, accounting and taxation issues.

Sustainable finance. Small and medium-sized enterprises (SMEs), including primary producers, dominate the food system. They are typically at a disadvantage when accessing finance, owing to opacity, under-collateralization, high transaction costs and lack of financial skills. Bank credits are the main source of external capital for SMEs. They need better access to alternative financing, such as equity finance, corporate bonds issuance, and mezzanine finance.

Incentive mechanisms. While there is growth in the adoption of eco-compensation or payments for ecosystem services in rural areas, the current incentive structures still encourage unsustainable short-term behaviors that deplete natural capital. This is a complex area requiring a suitable mix of appropriate “carrots, sticks, and narratives” to change the way that markets work (e.g., sustainable financing and payments for ecosystem services), to enact smart policies and regulations, and to change social norms through information disclosure and education.

ADB has established a working group to expand upon experiences in China and the Mekong subregion through a regional natural capital lab. The lab is designed as a living and virtual platform to incubate, accelerate, and expand natural capital investment, which will prioritize the support for greening of the agriculture value chain in developing Asia. The lab will leverage existing accounting tools to quantify the ecosystem service value of green agricultural value chains, strengthen eco-compensation or payments for ecological services to incentivize behavior change among small farmers, and establish a financial facility to convert ecosystem value or assets into the revenue model of agribusiness.

Our experience during COVID-19 has demonstrated the resilience of agriculture and its enormous value in driving economic recovery. The pandemic has also shown the importance of preserving the harmony among natural assets. Combining these two lessons underlines the need to transform agri-food systems so that they operate in a sustainable way. This transformation can be considerably enhanced by the use of digital technology and eco-compensation mechanisms. ADB’s natural capital lab and the associated financing facility would catalyze much-needed investment to achieve this transformation.

Qingfeng Zhang

Qingfeng Zhang

Chief, Rural Development and Food Security (Agriculture) Thematic Group, ADB

This Op-Ed is reproduced from Asian Development Bank.

Financing Sustainable and Resilient Food Systems

Opening remarks by Bambang Susantono, ADB Vice-President for Knowledge Management and Sustainable Development, at the Rural Development and Food Security (Agriculture) Thematic Group’s Sustainable Food Webinar Series, 16 March 2021.

Good evening, good afternoon or good morning to our distinguished panelists, colleagues, and guests, wherever you may be.

It is my pleasure to welcome you to our new Sustainable Food Webinar Series. The Series investigates how we can make the food systems more sustainable and resilient. This year, in September, we will have the UN Food Systems Summit, followed by ADB’s biennial Rural Development and Food Security Forum. It is an opportune time to discuss how to transform the food systems.

Risk of food insecurity is rising due to the COVID-19 pandemic

The pandemic disrupted economic growth globally, as countries responded to this tragic health crisis. Simultaneously, the risk of food insecurity is rising.

The FAO food price index has recorded an increase for nine consecutive months. Last month, food prices reached the highest level since July 2014. The World Food Programme also says that the number of people in Asia and the Pacific facing acute food insecurity nearly doubled to 265 million by the end of last year.

Countries must respond urgently to manage these growing risks. And we need to avoid the possibility of a food crisis similar to 2007/2008.

Vulnerabilities of food supply chains

One of the most important lessons of the pandemic is that our food supply chains are vulnerable. Weak logistics and storage systems are among the many challenges we face.

There are also public health risks associated with our food supply chains. WHO estimates that at least 61% of all infectious diseases are zoonotic—or those that originate from animals. Research shows that the risk of new or re-emerging zoonotic diseases is particularly high in Asia, due to the close proximity of humans and animals in wet markets.

The pandemic has underscored the close connections between people, nature, and climate. Balancing the health of people, animals, and the environment is crucial for sustainable development.

Added to this, unsustainable agricultural practices in our region poses serious threats to long-term food security. Such practices include increased and intensified chemical use. Also, getting food from the field to the table impacts our climate. According to the Intergovernmental Panel on Climate Change or IPCC, food supply chains account for up to 29% of greenhouse gas emissions.

Actions required for food system transformation

All these lessons increase the urgency of building sustainable and resilient food systems. How do we do this?

Policies and institutions must provide the right incentives to minimize environmental and health consequences. We need to scale up both public and private investments in green businesses—such as ecological agriculture, a circular bioeconomy, eco-tourism, and better pollution control.

We also can maximize the benefits of using innovative technologies. The rapid embrace of digital technology is generating new businesses and financial models that can help accelerate food system transformation. For example, remote sensing, spectral analysis, and blockchain technology can effectively reduce greenhouse gas emissions and reduce water use, among other benefits. ADB will proactively use our knowledge capacity and financial instruments to support our countries make progress in these areas, in collaboration with our partners.

Integrated rural development and food security

The pandemic saw millions of rural migrants lose their city jobs, forcing them to return to their rural homes. As we go into post-pandemic recovery, we need a clear strategy for rural development to rebuild these lost livelihoods.

In 2018, ADB adopted Strategy 2030, in which promoting rural development and food security is identified as one of the 7 priority areas. The strategy offers a holistic approach to support long-term rural recovery and resilience, while assisting our countries in transforming their agri-food systems. We believe that by effectively leveraging digital technology and addressing the rural-urban digital divide, we can achieve this in three key dimensions.

First is to promote greater agricultural productivity through innovative technologies. More “nutrition sensitive” programs can also help increase the availability and accessibility of healthy, nutritious food to all population.

Second, an enabling environment for agri-business to thrive will promote inclusive business, connecting the base-of-the-pyramid population with the mainstream economy. We believe that opportunities exist in leveraging digital technology for better integration of the huge number of smallholders into value chains. By providing on- and off-farm jobs, more youths can become “agri-preneurs.”

This leads me to the third point on rural development—that is to focus investments on improving social and environmental welfare. Better education and healthcare services, along with social protection systems, will be critical.

ADB’s achievement

Let me highlight some of our achievements in food security and rural development.

ADB increased investments in agriculture, natural resources, and rural development over 4 times this past decade. Our annual investments rose from $1.6 billion in 2009–2011 to $6 billion in 2018–2020.

In the past, farmers had few incentives to pursue sustainable agriculture and protect natural assets, which were often associated with significant costs or reduced income. This was due to the disconnect between retail food prices and the high cost of production and distribution, as well as an implicit environmental cost. This, however, has been changing over time.

For example, our Anhui Huangshan Xin’an River Ecological Protection and Green Development Project in the PRC is a model for how a structured green investment fund can support Small and Medium Enterprises in green businesses such as ecological agriculture, eco-tourism, and pollution control. It shows how we can blend ADB financing with an eco-compensation fund to help transform an agri-food system, while at the same time provide incentives for small farmers to adopt better practices.

Our knowledge work is also shifting to food system transformation. For example, ADB completed a cross-country analysis to promote green and resource-efficient agriculture in Bangladesh, Cambodia, and Nepal. We are also partnering with international organizations and national think-tanks to blend global knowledge with on-the-ground realities to create customized, context-specific knowledge solutions.

ADB’s catalytic role in financing food system transformation

Moving forward, we will continue to diversify our portfolio to cover food system transformation, leveraging on private and public partnerships, and providing innovative knowledge solutions. In fact, we are now designing an Innovative Natural Capital Financing Facility to enhance ADB’s ability to catalyze natural capital investments and provide knowledge solutions.

The facility has 3 pillars—a Natural Capital Lab, an Agribusiness Service Platform, and a Natural Capital Fund. The lab is a living and virtual platform to incubate, accelerate and expand natural capital investment. It will leverage existing accounting tools to quantify the ecosystem service value of green agricultural value chains. It will also strengthen eco-compensation for ecological services, which in turn will incentivize behavioral changes in small farmers. It establishes a financial facility to convert ecosystem asset values into a revenue model for agribusiness.

I conclude my remarks with my appreciation to our speakers today for enhancing our discussions. And the dialogue will not stop here. I look forward to our joint work ahead in helping transform our food systems. Thank you.

Susantono, Bambang

Susantono, Bambang

Vice-President for Knowledge Management and Sustainable Development, ADB

ADB Bolsters Support for Sustainable and Resilient Food Systems

ADB is diversifying its investment portfolio to include food systems transformation, leveraging on private and public partnerships, and providing innovative knowledge solutions.

MANILA, PHILIPPINES (19 March 2021) — The Asian Development Bank (ADB) has quadrupled its support for food systems development in the past decade from $409 million in 2010 to $1.2 billion in 2020 to help close the financing gap in ensuring food security.

“One of the most important lessons learned from the coronavirus disease (COVID-19) pandemic is the urgency of generating global awareness and building sustainable and resilient food systems which requires actions at many levels,” said ADB Vice President for Knowledge Management and Sustainable Development Bambang Susantono during the launch of the Sustainable Food Webinar series on 16 March. “We definitely need to scale up public and private investments in green business, such as ecological agriculture, circular bioeconomy, eco-tourism, and pollution control.”

The COVID-19 pandemic has increased food insecurity risks, lowered the nutritional status of vulnerable populations, and highlighted the weaknesses of food supply chains and the delicate connection between food systems and development challenges. A large financing gap, estimated at $140 billion per year, also poses a barrier in transforming food systems.

In response to the findings of a recent ADB study on sustainable and resilient food systems, ADB is diversifying its investment portfolio to include food systems transformation, leveraging on private and public partnerships, and providing innovative knowledge solutions.

Through an Innovative Natural Capital Financing Facility under development, ADB will drive investments towards natural capital and provide knowledge solutions by using existing accounting tools to quantify the ecosystem service value of green agricultural value chain and strengthen eco-compensation, or payments for ecological services, to incentivize behavior change of small farmers.

Experts from ADB, the International Fund for Agricultural Development, Organisation for Economic Co-operation and Development, the World Bank, and other development partners joined the seminar along with representatives from civil society organizations, national think tanks, and independent scholars. The webinar was the first of the Sustainable Food Webinar Series in preparation for the United Nations Food Systems Summit in September and ADB’s Rural Development and Food Security Forum later this year.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.


Restoring a River the Natural Way

Pu’er City used natural materials and processes to rehabilitate the Simao River. Photo Credit: CDIA/Rudini Baoy.

In the People’s Republic of China, rehabilitation of the Simao River took an ecological and green development path and was integrated into city plans.


The Simao River in Pu’er City, the People’s Republic of China (PRC) was rehabilitated to prevent flooding in the city, restore the area’s biodiversity, and improve livability for residents.

In 2012, the city government worked with the Cities Development Initiative for Asia (CDIA) to finalize the design of its rehabilitation project, which aimed to develop Simao River into an attractive landmark and improve its flood protection capacity. Soon after, KfW (German Development Bank) approved an $80-million loan to implement the key components of the project.

In 2018, CDIA development experts returned to Pu’er and saw that the measures implemented by the city, which largely adopted a nature-based approach, resulted in better flood control and more sustainable river management, improved water quality, and restored ecology of the river. Residents were also using green spaces near the river for recreation and social interaction.

Project information

PRC: Flood Control, Environmental Improvement and Water Reclamation Works in Pu’er

Project snapshot

      • Start date: January 2012
      • End date: June 2012
      • Total project cost: $410,000
      • Financing: 
        • KfW: $80-million loan for key components of project
        • CDIA: $410,000 in technical assistance
        • Municipal Government of Pu’er
      • Commissioning agency: Municipal Government of Pu’er


Pu’er City is situated in the southwest of Yunnan Province. It covers a floodplain of about 45,000 square kilometers, framed by green hills and mountains where the famous Pu’er tea is grown. The city’s estimated population is 200,000.

Pu’er developed into a modern urban center in recent years, but increased urbanization brought pressing challenges. It experienced frequent floods that severely affected urban activities and the future development of the city. The foul odor of garbage and sludge from the Simao River further attested to environmental deterioration.


The Simao River traverses the urban area of Pu’er. The 15-km long watercourse acts as a natural drainage channel for the city and serves as a home for wildlife and vegetation along its shores. In previous years, however, the river lost its capacity to provide these environmental benefits.

In 2012, the river had a very low flood risk management capacity that it could only cope with a 5-year flood event or less. Due to the characteristics of the river’s course and riverbeds, it could not effectively drain flood waters, thus putting the city at risk of flooding.

The Simao River was also polluted. Solid waste, sludge, and aquatic plants impeded its normal water flow, and informal settlers occupied some of its riverbanks. Pu’er’s inadequate wastewater management system compounded the problem, as only 22% of the urban wastewater was collected and treated. The rest was discharged directly into the Simao River and its tributaries.

With the river’s poor water quality and surrounding environment, biodiversity could hardly thrive. This was a stark contrast to the rich flora that Yunnan Province is known for.

Pu’er’s residents perceived the Simao River as a heavy burden; they did not see it as an integrated part of their city and did not regard it as an emblematic feature of Pu’er’s natural beauty.


The Pu’er Municipal Government prepared a feasibility study of the Simao River rehabilitation project to develop the watercourse into an attractive landmark and to prepare the city to cope with severe flood events.

Comprehensive project preparation

The city government asked CDIA to review the feasibility study and finalize the preliminary design for the Flood Control, Environmental Improvement, and Water Reclamation Works in Pu’er project.

CDIA and the Pu’er government worked closely for 6 months in 2012 to prepare the project, involving all relevant stakeholders at each critical step of the planning process. They collected information and conducted surveys, analyses, and calculations to provide a strong foundation for the design of the Simao River rehabilitation project.

By the end of CDIA’s intervention, the city was set to pursue the following measures:

  1. Improve the water quality through a series of treatment wetlands at the confluences of Simao River tributaries and storm water channels;
  2. Provide a river layout that can withstand 50-year flood events;
  3. Allow the river water to flow through a combination of free-flowing stream and still water sections;
  4. Provide an open main flood channel with vegetation situated alongside riverbanks; and
  5. Divide project construction into three sections and three contract packages for the entire length of the river.

In December 2012, KfW signed an $80-million loan agreement with the PRC government to implement flood control and channel improvement works for the Simao River.

Use of ecological and green development approach

The city mostly used nature-based solutions recommended by CDIA to achieve a more sustainable river rehabilitation and create a healthy and livable environment for residents. It espoused the use of ecologically sound and diverse measures, natural processes and materials, and it based restoration efforts on the idea of the features being part of the natural environment and not exclusively built structures. It also planned to entirely use native plant materials for revegetation and for reinforcing flood beds and riverbanks.

The adoption of an ecological and green development approach ensures cost effectiveness in terms of construction and maintenance, and it can also recreate a natural river environment that protects against floods and provides natural habitats for biodiversity.

Integration of the project with city development plans

The city government integrated the planned interventions with their master plan and linked the river works with other relevant urban infrastructure projects, such as wastewater management, wetland park development, and urban renewal. This approach enabled the city to pursue a project design adapted to its existing and future development needs.


CDIA visited the city 6 years after it completed its technical assistance and found that the city completed 85% of the project work, including flood control, sewage interception, and river ecology restoration measures recommended in the CDIA study.

Pu’er officials noted that the risk attributed to flooding has been minimized in flood-prone areas after completion of dredging and excavation works along the river. They also expect that the river will be able to withstand a 50-year flood event when the project is completed.

The river’s water quality improved after the city reformed its wastewater management program, and the foul smell coming from the river was eliminated.  There was also a noticeable increase in fish population in the still water sections of the river.

The landscape surrounding the river was rehabilitated, with 50 hectares of greening and restoration efforts along its banks giving residents new spaces for recreation.

The city used natural and indigenous materials and processes during the project and that resulted in low construction and maintenance costs. Pu’er officials are optimistic that an ecological and green development approach will improve biodiversity and promote the sustainable development of the river.

Informal settlers along the river that were exposed to flooding were transferred to relocation sites with better amenities and quality of housing units.  

Finally, the roads and bridges constructed and retrofitted near the river are expected to improve mobility and access to social services for residents.

The project is transforming Simao River into an ecological landmark while reducing flood risks and improving water quality. Photo Credit: CDIA/Rudini Baoy.


Aided by the interventions and the commitment of relevant stakeholders, Pu’er is set to achieve its primary objective of developing the Simao River watercourse into an attractive ecological landmark while eliminating flood risks and improving the water quality of the river.

The integration of the project into the Pu’er City Master Plan paved the way for the coordinated implementation of relevant urban infrastructure projects. Meanwhile, the active participation of city officials and the affected communities in project planning and implementation strengthened their ownership of the project.

The city government linked the various project components with internal and external funding sources necessary to implement the project. It further established a governance structure, headed by the city mayor, to manage and maintain the river and its tributaries after project completion.

Key officials of the Pu’er Municipal Government are optimistic that Pu’er will serve as a model for other cities in the PRC on how to approach the problem of flood management the natural way and how to integrate flood management measures in a more sustainable manner.


Cities Development Initiative for Asia. 2012. Final Report: Flood Control, Environmental Improvement & Water Reclamation Works in Pu’er.

R. Baoy, E. Ringhof, and C. Yiyang. 2018. Pu’er Tracer Study. Tracer Studies on City Interventions. Cities Development Initiative for Asia.

Brian Capati

Brian Capati

Urban Development Specialist, Cities Development Initiative for Asia

This blog is reproduced from Development Asia.

Integrating a Market-Based Approach to Biodiversity Conservation

The number of wild crested ibis in the Qinling Mountains increased by 52% in 2019 from 2010 because of improved ecosystem management. Photo credit: Shaanxi Rare Animal Rescue Center.

Participatory conservation and ecotourism can help maintain biodiversity while promoting sustainable livelihoods for local communities.


The Qinling Mountains in the People’s Republic of China (PRC) is a global biodiversity hotspot and one of the country’s most critical ecological function zones that supports many endangered, rare, and endemic plants and animals.

More than 60% of the estimated 15.7 million people who live in the mountains rely on farming and agricultural production. The high level of land-use pressure in the area and nature reserves created an urgent need to conserve Qinling’s ecosystem.

A project co-financed by the Asian Development Bank (ADB) and the Global Environment Facility (GEF) introduced market-oriented measures to enhance the environmental management while promoting sustainable livelihoods for local communities.

Project snapshot

      • Approval date: October 2010
      • Closing date: November 2019
      • Total project cost: $43.6 million
      • Executing agency: Shaanxi Provincial Government
      • Financing: Asian Development Bank, $39.5 million; Global Environment Facility: $4.1 million


Located about 45 kilometers (km) southwest of Xi’an—the capital city of Shaanxi Province, the Qinling Mountains has high levels of endemism. It is home to about 20% of the PRC’s wild giant panda population, and the only known wild population of the crested ibis—one of the world’s rarest birds. The water resources from the mountain range are integral to the watersheds of the Yangtze and Yellow rivers. About 70% of all vegetation types in the country can be found in this range.

Poverty incidence in the area is high—about 37% of the total population—due to limited profitable and sustainable income generation opportunities. Tourism is being developed but with modest results.


Heavy reliance on agriculture and competing land uses, particularly in the hilly areas of Qinling, have caused significant environmental, land, and biodiversity degradation. The land-use pressure also brought ecological conservation into conflict with economic development efforts of local communities.

Previous donor- and government-funded projects intended to address land degradation and related issues have supported rural livelihoods and land management in some areas but did not lead to sustainable environmental and human resource benefits once project funding ceased.


The Shaanxi Qinling Biodiversity Conservation and Demonstration Project(link is external) introduced a market-based approach that integrates biodiversity conservation with sustainable revenue generation and land and conservation management.

The approach involves measures that provide incentives for local communities to participate in biodiversity conservation by creating income opportunities from ecotourism businesses promoted under the project. Ecosystem service provision is aligned with the interests of individuals who comprise the market to reduce the dependency on unsustainable mechanisms. 

Covering a total area of about 63,900 hectares (ha), the project strengthened the ecosystem management in the Qinling Mountains, increased rural incomes, and reduced poverty.

The project established the Qinling National Botanical Garden (QNBG)—the first national-level botanical garden in the PRC, initiated jointly by the Shaanxi Provincial Government, State Forestry Administration, and Chinese Academy of Sciences. About 4,000 ha of state forestry lands were placed under its management. 

Certificates for forestry conservation and other practices for more than 6,000 ha were awarded to individual households.  

The project also supported the development of species management programs for four globally threatened animal species—the giant panda, the golden monkey, the golden takin, and the crested ibis. 

The QNBG built or upgraded community infrastructure, including 18 km of roads along the Tianyu river; more than 120 km of mountain paths; and village facilities supporting home-based ecotourism, such as solar lighting stands, water supply, and ecological toilets for 160 households. 

The project promoted small income-generating businesses, such as the sale of local fruits and other goods. Local communities implemented conservation agriculture on about 35 ha and ecological forestry rehabilitation on about 70 ha with support from the QNBG. Ecotourism business and conservation programs provided alternative but sustainable livelihoods for local communities, which eventually lessened pressures on the lands and biodiversity.

The project also rehabilitated the Shaanxi Animal Rescue Center (SARC) following international standards and good practices for botanical gardens and wildlife conservation.  In addition to their conservation functions, the QNBG and SARC provide state-of-the-art ecotourism products and services. Their revenues are reinvested for sustainable financing and conservation of the broader mountainous area.

About 260 ha of botanical gardens were established at QNBG, including 22 specialized gardens and associated public education facilities, such as a public education center, a herbarium, and two outdoor education camps. Designated as a national and provincial nature education base, the QNBG was visited by over 80,000 students from 2017 to 2019.

Research facilities such as laboratory, animal hospital, public education center, and tourist information center were installed at SARC. These also include the breeding and exhibition areas for endangered animals.

Through the GEF grant, the project supported the development of an integrated ecosystem management strategy and action plan, including policy recommendations for the establishment of a national park system (a comprehensive nature and ecosystem management regime being promoted by the central government) in the Qinling Mountains.

A species monitoring system was established under SARC, including a field-based monitoring patrol station. Ecological baseline monitoring and a database were also created for the QNBG.

Moreover, the project provided training programs and offered job exchange opportunities for technical conservation staff and implemented a replication and conservation awareness-raising program.


Improved biodiversity conservation and livelihoods
  • The systematic management of over 10,000 ha of forestlands in Qinling has helped reduced land degradation and soil erosion.
  • Mainstreaming the management of globally threatened animal species into government conservation programs has increased the population of the four endangered wildlife species from 2010 to 2019.
  • About 1.1 million ecotourists visited the project area in 2019.
  • Rural incomes have increased by 140% in 2019 from 2010. Households in the mountainous area have been lifted from poverty by 2019.
  • Project-related activities generated more than 1,500 jobs. Over 300 jobs were created directly by QNBG and SARC operations. The rest are through small-scale ecotourism enterprises within local communities, such as home-stay ecotourism enterprises that are in operation since 2016.
In the project area, the number of golden takins increased by 150%, crested ibis by 52%, golden monkeys by 71%, and giant pandas by 27%. Photo credit: Shaanxi Rare Animal Rescue Center.
Enhanced ecosystem management and institutional capacity

The project supported policies that promote long-term ecosystem management, habitat management and action plans, and updates on provincial regulations for Qinling Ecological and Environmental Management.

Through the project’s initiative, the provincial government prioritized the national park system for the Qinling Mountains. The plan for the Qinling National Park has already passed an expert panel review in October 2020.

Science-based capacity development for local agencies has also strengthened the management conservation, baseline database and monitoring, species management plans, and scientific courses for public education. Around 300 staff were trained on conservation and habitat management through on-the-job training at professional institutes such as the Royal Botanic Gardens, Kew and the Durrell Institute of Conservation and Ecology in the United Kingdom, and the Chicago Botanic Garden in the United States.

The Qinling National Botanical Garden has become a major ecotourism destination and a major public education center for school kids. Photo credit: Qinling National Botanical Garden.


  • Integrating market-oriented interventions has helped generate revenues from ecotourism in the demonstration area and through the conservation of natural ecosystems. Innovative regulations, enhanced institutions and capacities, and strengthened enforcement mechanisms are crucial for market-driven environmental management systems.
  • Government support is necessary when integrating local community livelihoods with conservation efforts.
  • The integrated environmental management strategy and action plan served as a critical scientific basis for government policymaking to improve ecosystem management of the Qinling Mountains through the establishment of a national park system.
  • The project’s designed interventions for institutional capacity and policy development can be replicated within and outside the PRC.

ADB. 2020. Completion Report: Shaanxi Qinling Biodiversity Conservation and Demonstration Project. Manila.

ADB. 2009. Report and Recommendation of the President to the Board of Directors: Proposed Loan and Administration of Grant to the People’s Republic of China for the Shaanxi Qinling Biodiversity Conservation and Demonstration Project. Manila.

ADB. 2008. Market-Based Approaches for Managing the Asian Environment: A Review. Manila.

Shaanxi Development and Reform Commission and Shaanxi Finance Department. 2018. The Integrated Ecosystem Management of the Qinling Mountains. Beijing.

The State Council. 2011. National Principal Function Zoning Plan. Beijing.

Zhiming Niu

Zhiming Niu

Senior Project Officer (Environment), East Asia Department, ADB

This blog is reproduced from Development Asia.

Balancing Ecological and Economic Development through Sustainable Forest Management

Underutilized forestland is turned into a Chinese fir forest in Yudu county in Jiangxi province. Photo credit: Jiangxi Provincial Project Management Office

Jiangxi province in the People’s Republic of China enhances forest productivity and ecosystem health using holistic and sustainable practices.


Forestry plays an important role in both economic development and environmental sustainability. For Jiangxi, a mountainous province in the People’s Republic of China (PRC), the forestry sector is one of the key drivers of growth as it provides protection and livelihood to rural communities. However, overexploitation of natural forests, underutilization of forestlands, inappropriate tree species selection, unbalanced stands structure, and unsustainable silviculture practices have made the province’s forest ecosystem fragile.

With the growing demand for forest products, the forestry sector of Jiangxi requires significant improvement to satisfy the economic needs of the province while rehabilitating the degraded forest ecosystem. A project funded by the Asian Development Bank (ADB) introduced sustainable forest management to help Jiangxi improve the health of its forest ecosystem and enhance its economic potential.

Project information

42022-013: China, People’s Republic of – Jiangxi Sustainable Forest Ecosystem Development Project

Project snapshot

      • Approval date: 9 November 2010
      • Closing date: 30 July 2018
      • Total project cost: $70 million
      • Executing agency: Jiangxi Provincial Government
      • Financing: Asian Development Bank, Government and Beneficiaries


Forestry plays an important role in both economic development and environmental sustainability. For Jiangxi, a mountainous province in the People’s Republic of China (PRC), the forestry sector is one of the key drivers of growth as it provides protection and livelihood to rural communities. However, overexploitation of natural forests, underutilization of forestlands, inappropriate tree species selection, unbalanced stands structure, and unsustainable silviculture practices have made the province’s forest ecosystem fragile.

With the growing demand for forest products, the forestry sector of Jiangxi requires significant improvement to satisfy the economic needs of the province while rehabilitating the degraded forest ecosystem. A project funded by the Asian Development Bank (ADB) introduced sustainable forest management to help Jiangxi improve the health of its forest ecosystem and enhance its economic potential.

Project information

42022-013: China, People’s Republic of – Jiangxi Sustainable Forest Ecosystem Development Project

Project snapshot

      • Approval date: 9 November 2010
      • Closing date: 30 July 2018
      • Total project cost: $70 million
      • Executing agency: Jiangxi Provincial Government
      • Financing: Asian Development Bank, Government and Beneficiaries


Jiangxi is a mountainous and underdeveloped province in the southeastern part of the country. In 2008, its provincial gross domestic product (GDP) per capita was only CNY14,727 (about $2,000), one-third less than the national average.

Mountainous and hilly areas account for 78% of the province’s total area. In 2008, the forestry sector’s gross output reached CNY76 billion or 14% of the provincial GDP. In the same year, its forestlands contributed to 7% and 8% of the PRC’s wood and bamboo production. Forests logs are mainly used as sawn timber, veneer, and fiberboard for domestic uses.

Development Challenges

About 10.6 million ha or 62.5% of Jiangxi’s total area is designated as forestland. However, 1.5 million ha of these lands were barren or low yielding. The average forest stock volume was only 34.4 cubic meters (m3) per ha, much lower than both the national average of 76 m3/ha and the world average of 99.8 m3/ha.

Jiangxi’s forest ecosystem was fragile due to its unbalanced age and the monoculture structure of its young and middle-aged stands and unsustainable silviculture practices. Major causes include:

  • the historical overexploitation of forest resources,
  • the underutilization of forestlands because of lack of investment and/or access to credit,
  • short-sighted production-oriented afforestation,
  • inadequate know-how or skill in forest management by the communities, and
  • lack of institutional experience in sustainable forest management.

The forests are also vulnerable to natural disasters, such as the winter storms that hit the PRC in 2008. The underutilization of forestland had led to soil erosion, siltation of rivers and lakes, and deterioration of water quality.

Rapid economic growth has escalated the country’s demand for forest products. The government needs to move away from production-orientated, low-quality monoculture forest development to meet the rising demand of wood-processing industries, improve the health of the forest ecosystem, and boost carbon sequestration to mitigate climate change.


Approved by ADB in 2010, the Jiangxi Sustainable Forest Ecosystem Development Project helped establish new forest plantations, rehabilitated barren and low-yielding forestlands, and promoted sustainable forest management through an ecosystem-based, multi-functional forest development approach.

Sustainable forest management is a strategy that contributes to the management, conservation, and sustainable development of forests and provides for their multiple and complementary functions and uses to meet the social, economic, ecological, cultural, and spiritual needs of present and future generations. The project adopted a holistic approach which takes ecological, silvicultural management, and social aspects into account following the sustainable forest management principles.

The project also enhanced the local capacity and reinforced environmental protection awareness among stakeholders through intensive trainings on sustainable forest management, forest carbon sequestration and stock estimation, and climate disaster risk mitigation. It also provided forest insurance against natural risks and set up a system to monitor forest carbon stock.

Following the sustainable forest management principles, new design rules and environmental codes were prepared by the project to guide participating counties and end-borrowers through site selection, design, implementation, and inspection. A total of 47,638 ha of forestlands were developed or rehabilitated. Timber plantation (Chinese fir and slash pine), tree crops (orange, oil tea, and tea trees), and low-yielding and snowstorm-damaged bamboo rehabilitation were supported by the project loan to offer options to farmers to balance short-term and long-term incomes when they plan for forest investment. Mixture of broadleaf species with conifers and bamboo groves were introduced to protect forests against climate-related disasters, pests, disease, and fires. Natural regeneration is also protected. Mixed forest is promoted versus monoculture to improve ecological biodiversity and multiply the functions of timber plantation. Farmers adopted environmentally friendly silviculture practices from site preparation to tending.

A forestry insurance program was established to protect the forestry sector from risks. With government subsidy, nearly 30,000 ha of timber plantation was covered by a forest insurance policy to improve the risk resilience of forest farmers, enterprises, and farms. The premium for timber forests is 0.4% of the costs to replant the trees per mu (unit of land measurement in the PRC). Forest insurance and risk mitigation measures training for farmers were also conducted.

The project trained local officials, forest bureau staff, forest farmers, and workers on sustainable forest management and climate mitigation measures. The project also developed a monitoring, verification, and reporting system to improve forest carbon estimation in Jiangxi through a grant from ADB’s Climate Change Fund. It also piloted sustainable forest management in 380 ha of snowstorm-damaged and low-function forests to enhance carbon sequestration capacity and mitigate the risk of climate disasters.

Taking advantage of the reform on forest tenure and the development of trading centers for forestry property rights in the PRC, the project accepted forest property and forestland tenure rights as collateral among other collateral and guarantees. This flexible approach effectively enhanced accessibility to credit, and addressed a longstanding issue within the agriculture and forestry sectors about the lack of investment resulting from insufficient collateral or guarantee.


The productivity of the project forests improved with an average yield resembling Jiangxi’s first-rate or top 10% forests. Tea-seed oil yields increased from 225 kilograms per hectare (kg/ha) to 531 kg/ha, orange yields reached 22,612 kg/ha, while tea leaf yields reached 3,088 kg/ha.

Figure 1. Benefits of Sustainable Forest Management

Source: Asian Development Bank

The project promoted environmentally sound practices and generated significant environmental benefits. Bare mountains and slopes were converted into ecologically stable forest stands. Mixed forest plantations improved the structure of the forest, which enhanced resistance to pests and fire, increased biodiversity, and boosted water and soil conservation. Timely rehabilitation of snowstorm-damaged bamboo forests protected them against climate-related disasters, pests, and diseases. Water conservation reached 18 million m3 and soil erosion declined by about 95,300 tons annually. The application of integrated pest management and bio-agents further prevented pollution and outbreaks of pests and diseases. The project also reduced the use of chemical fertilizers by 3.2 million kg per year and replaced them with organic compost and compounds. The project is estimated to contribute about 142,900 tons in carbon sequestration annually.

The intensive training and extension programs improved the local communities’ understanding of and skills in sustainable forest management. The sustainable forest management concept and approach were institutionalized within Jiangxi forestation administration system.

The project also provided 75,368 local farmers and individuals, two-thirds of whom are women, with job opportunities like land preparation, tree planting, forest tending, daily maintenance, and harvesting. Nearly 12,000 households who participated in afforestation and bamboo rehabilitation have improved incomes through profit sharing in farmers’ cooperatives or companies. About 25,000 households have earned incomes by leasing their forestland for annual rents. The high demand for nursery stock, fertilizer, and forestry equipment also contributed to increased rural incomes and reduced poverty in the project area. From 2011 to 2018, rural income grew from 95.9% to 205.7% and poverty incidence rates in project areas declined from 24%–34% to 0.25%–4.71%.


Practices that are effective in balancing the ecological and economic development of forestlands include:

  • planning for long-term management with clear and defined development objectives;
  • using short- to medium-term incomes from economic trees and crops to supplement long-term, multi-purpose timber forest investment;
  • replacing monoculture with mixed stands to reduce biotic and abiotic calamities and improve biodiversity;
  • integrating existing natural regeneration in the structure of new stands;
  • selecting site-adapted, native tree species for afforestation;
  • promoting advanced seedling technology and
  • paying close attention to the seedling quality;
  • shifting to low-impact site preparation and planting techniques;
  • applying selective weeding and tending methods; and
  • applying tested practical and effective forestry techniques.

A comprehensive quality management mechanism for this project was established with specific indicators and third-party investigation to ensure high quality and productivity of the forestlands. The project’s achievement has attracted farmers’ attention and influenced silviculture activities beyond the project area. The project management office installed signboards on exemplary sites for publicity and to set examples.

Increased financing support from both the public and private sectors allowed for the effective utilization of forestland and further improved the quality of afforestation. In the medium and long-term, this enhances forest production, environmental benefits, and livelihoods.

Overall, it is possible to satisfy the social and economic development needs while balancing ecological and economic development.

Xin Shen

Xin Shen

Senior Project Officer (Natural Resources and Agriculture), East Asia Department, ADB

This blog is reproduced from Development Asia.

Evaluating Losses Associated with African Swine Fever in the People’s Republic of China and Neighboring Countries

© 2022 Regional Knowledge Sharing Initiative. The views expressed on this website are those of the authors and presenters and do not necessarily reflect the views and policies of the Asian Development Bank (ADB), its Board of Governors, or the governments they represent. ADB does not guarantee the accuracy of the data in any documents and materials posted on this website and accepts no responsibility for any consequence of their use. By making any designation of or reference to a particular territory or geographic area, or by using the term “country” in any documents posted on this website, ADB does not intend to make any judgments as to the legal or other status of any territory or area.