China, People's Republic of: Silk Road Ecological Rehabilitation and Protection Project

Agriculture, natural resources and rural development / Agricultural policy, institutional and capacity development - Agro-industry, marketing, and trade - Forestry - Land-based natural resources management

Extending across seven provinces and two autonomous regions, the YREC comprises the PRC's second largest river basin with a population of 120 million people._The basin accounts for 8% of the national gross domestic product and is critical for food security yet faces complex ecological and environmental challenges. With only 2% of the country's water resources, the region suffers from severe water scarcity, impacts from climate change including droughts and flash floods, and environmentally unsustainable development. In response, the Government of the PRC has prepared the Yellow River Basin Ecological Protection and High-quality Development Plan, 20212035, aimed at prioritizing ecological protection and promoting high-quality green development._To achieve these goals, ADB's YREC support adopts a programmatic approach targeting (i) institutional strengthening through governance and policy reforms, (ii) demonstration of innovative approaches and technology through integrated solutions, and (iii) capturing and sharing of knowledge through strategic partnerships. This project will play a demonstrative role for environmental protection under rural vitalization and promote high-quality green development as part of the YREC program.

Environmental degradation and weak ecological resilience are key concerns in the fragile landscapes of Shaanxi, Gansu, and Qinghai provinces (project provinces) in the Silk Road region of the northwestern PRC. The region has complex eco-environment systems that are water-scarce, have highly erodible low-quality soils, poor quality forestry and vegetation cover, and river systems with high sedimentation. These issues are exacerbated by climate change impacts. Notable contributory factors are the unsustainable use and overextraction of natural resources, poor state of natural resources (forest and wetlands), weak institutions and lack of coordination, lack of awareness about environmental issues, and limited knowledge and capacity to manage complex systems. Drought, wind and water erosion, and forest and grassland denudation are major issues, with about 72.8% of the region impacted by soil erosion._The region is also home to 92 million mostly low-income people with limited livelihood opportunities, who are dependent directly or indirectly on natural resources.

Weak institutional coordination for climate-resilient and integrated ecosystem management and knowledge sharing. Environment and ecosystem protection across important ecological functional areas in the project provinces requires close cooperation and cross-sector coordination among the responsible government agencies. The mandate of the Ministry of Natural Resources extends to coordinating activities to enhance climate and ecological resilience and improving rural livelihoods consistent with the PRC's rural vitalization program. However, interagency coordination with the Ministry of Ecology and Environmentwhich has a key role in managing national ecological function zones, agricultural nonpoint source pollution, and trans-provincial coordination on integrated ecosystem managementis very weak, especially at the local level. Effective coordination is critical for the sustainable management of forestry and important ecological wetland areas in the project provinces. Institutional coordination also needs to be enhanced among responsible government agencies to ensure clarity of roles and functions for achieving ecological and environmental outcomes, and to raise environmental awareness by engaging local communities in management activities and sharing knowledge.

Degraded and poor-quality forest and wetland ecosystems. Forest and wetland degradation is a critical ecological and environmental problem in the project provinces, which are key areas for soil erosion and desertification control. Shaanxi Province has national ecological areas suffering from poor forest quality, serious soil erosion, and desertificationimpacting the upper-middle reaches of the Yellow and Yangtze rivers. In 2015, only 45.6% of the forests in the Shaanxi Province were healthy. The main causes included improper selection of tree species, with poor species diversity and excessive planting density._As of 2020, Shaanxi, Gansu, and Qinghai had 64,111 square kilometers (km2), 183,865 km2, and 161,643 km2 soil erosion area, respectively, accounting for 31.18%, 40.16%, and 23.20%, respectively, of related provincial geographical area._In the drier regions of Gansu and Qinghai provinces, forest cover is low and in poor condition and wetland areas are severely degraded. This is due to traditional monoculture forestry, coupled with poor soil conditions, and inadequate forest tending and management practices._From 1990 to 2015, wetland areas in good condition in the northwestern PRC, including Shaanxi and Gansu provinces, decreased from 11,169 km2 to 503 km2, while wetland areas in poor condition increased from 29,725 km2 to 88,741 km2._Climate change impacts, such as extreme weather events, place additional pressure on already degraded forest and wetland areas. The primary challenge is to shift away from unsustainable monoculture forestry toward more climate-resilient forestry based on integrated ecosystem management principles to create diverse forest landscapes that support biodiversity and ecologically sensitive conditions.

Lack of local community participation and awareness of climate-resilient forestry and wetland conservation practices. The project provinces have historically been subject to intensive use of natural resources and large-scale extractive farming that has denuded the fragile environment. This has resulted in steady ecological deterioration and reduced livelihood opportunities in an already lagging region._There has also been a lack of public awareness and importance placed on cultivating environmental attitudes and values, insufficient capacity for integrated ecosystem management, and lack of professional management and technical personnel for forest and wetland protection. In addition, the lack of rural livelihood opportunities such as ecotourism is a priority issue to be addressed. Many of the existing sites for ecotourism are poorly resourced and managed, and there are few examples of quality ecotourism models to serve as examples of good practice. This is further impeded by lack of staff capacity in ecotourism services, poor planning and management, difficulty in attracting and retaining skilled staff because of lack of incentives, and weak organizational capacity.

Strategic fit. The project will demonstrate rural vitalization and ecological protection in the three project provinces and contribute to the PRC's high-quality development goals under the Fourteenth Five-Year Plan, 20212025._It is also aligned with the Yellow River Basin Ecological Protection and High-quality Development Plan (footnote 2), and the National Strategic Plan for Rural Vitalization, 20182022._The project builds on ADB's Strategy 2030, particularly operational priority 3;_and ADB's country partnership strategy (CPS) for the PRC, 20212025,_aligning with the priority CPS pillars of environmentally sustainable development, and climate change adaptation and mitigation. The project supports (i) institutional reforms to improve policymaking, public service delivery, and accountability; (ii) increasing regional public goods by defining knowledge as a core element to be achieved through ADB operations, with knowledge gained from environmental protection activities to be shared through regional knowledge sharing events; and (iii) promoting knowledge-based solutions for replication in the PRC and other DMCs.

Ecological restoration and quality in key regions crucial to national ecological security promoted

Ecological resilience and diversification of rural livelihoods enhanced

Trans-provincial coordination mechanism, institutional capacity, and knowledge on sustainable forest and wetland management strengthened

Forests and wetlands protected and rehabilitated

Multi-functional ecosystem services, environmental education and management facilities enhanced