"The forestland use right reform aims to establish a modern ownership mechanism to improve the forestry industry's productivity and increase farmers' income from forestland," Li said.

The strong resistance from local interests has distorted the reform policies in Dongcun Village, bringing with them an adverse impact to the economy and ecological environment, Li said.

The richer a forestland becomes, the more problems it will face, Li said, using his on-the-spot investigation to reinforce his point. The reform has allowed the potentially large economic value of the forests to change into real economic benefits. Unfair distribution, however, will hinder reforms and open up for malpractice to become widespread. Farmers may use destructive ways, such as illicit logging or setting fire to forests, to express their dissatisfaction, which have been seen in some areas.

"China's forestry reform is attracting worldwide attention. Its success depends on proper implementation," Li added.

Room to grow

While China's forest industry may be big, it is not yet strong, according to the SFA.

SFA figures show the output value of the country's forestry industry in 2008 totaled 1.44 trillion yuan ($210.83 billion), with the trade volume of forestry products standing at $71.9 billion, up 14.94 percent and 11.8 percent, respectively, year on year. China's forest product import and export volume accounted for 18 percent of the world's total. China's output of wood-based board reached 94.1 million cubic meters. Its outputs of rosin, bamboo and bamboo products, artificial board and furniture all rank first in the world.

Despite the impressive SFA figures, China's forestry industrial development is not without problems, some of which require immediate attention. For example, the slow construction of raw material forest bases, poor overall industrial quality and crude growth pattern have all hindered the development process.

Even as the global financial crisis comes under control, China's forestry industrial development still faces severe challenges. In the first half of 2009, China exported $14.92 billion worth of forest products, a decline of 11.66 percent compared with the same period last year.

Forestry reform for collectively owned forestland puts a strong impetus on China's forestry industrial development, said Zhang.

"It can effectively activate about 170 million hectares of collectively-owned forestland, realize orderly trading of use rights, protect legitimate rights and interests of forestland use right traders, promote a reasonable allocation of various production factors and attract various sources of capitals to participate in forestry construction," he said.

The reform also helps to improve the level of mass production and specialization in the forestry industry and continuously invigorate development toward a modern forestry industry, Zhang said.

"The development target of the forestry industry in 2010-12 is to maintain an annual growth rate of 12 percent and increase the total output value of the forestry industry from 1.44 trillion yuan ($210.8 billion) in 2008 to 2.26 trillion yuan ($331 billion) in 2012," Zhang said.

China's Forestry Industrial Development

According to the results of the Seventh National Forest Inventory issued by the SFA on November 17, 2009, China's forest coverage rate is 20.36 percent; forest acreage is 195 million hectares; the forest growing stock is 13.72 billion cubic meters; forest carbon storage is 7.81 billion tons; and the annual value of forest ecological service function surpassed 10 trillion yuan ($1.46 trillion).

In the past five years, China's forest acreage increased by 20.54 million hectares. The national forest coverage rate grew from 18.21 percent to 20.36 percent, up 2.15 percentage points.

In this time frame, the acreage of privately managed forestland increased by 11.39 percentage points to 32.08 percent.