Those whose emissions are below the assigned quota can sell the surplus to another enterprise; those who exceed the quota are fined. Thus, there are financial incentives in place encouraging factories to clean up their productive operations.

　　Throughout China's history, the spread of human activity and continuous population growth gradually encroached on the natural forests that covered much of China. Trees were chopped down for wood to burn on fires, or for construction purposes, while the land was redeveloped for agricultural purposes.

　　Inefficient farming methods led to decline in soil quality. The shortage of trees meant that water running off mountains was not retained but swept downstream, washing away soil and leading to devastating floods that damaged vast areas of farmland. The lack of forests also became a serious handicap as the deserts of northern and western China began a steady march eastwards.

　　Together with the Chinese Ministry of Water Resources and the local population, the World Bank formulated a watershed management approach that offered a sustainable solution to end this vicious cycle. One of the largest and most successful erosion control programs in the world, the Loess Plateau Watershed Rehabilitation project is being hailed as a model for water conservation - a model that is increasingly being applied across China.

　　Erosion has been substantially reduced through massive reforestation efforts, the discontinuation of farming on steep slopes, and the establishment of large-scale terracing and sediment control structures. The project has staved off soil erosion and reduced the amount of sediment seeping into the Yellow River. Over a period of seven years beginning in the 1990s, the project helped one million people out of poverty and fundamentally improved the ecological environment in the region.

　　[ More on the subject of environmental care for China can be found in the book: The Greening of China, by Geoffrey Murray and Ian G. Cook. Published by China Intercontinental Press, the book will be available in both English and Chinese in late 2004. ]