Shennongjia Nature Reserve is facing a dilemma. On the one hand, its government has made efforts to protect the local environment and achieved considerable success; on the other hand, the area has lost out on opportunities to improve local economic development. To continue protecting the environment, or to focus on promoting the economy? This is the question for Shennongjia.

Present situation: High green GDP but low GDP

Shennongjia Forest District first applied for a pilot project in green GDP accounting in 2004. According to the authorized estimate, the green GDP per capita of the area was up to 300,000 yuan, 30 times as much as the national average. However, economic indicators showed that in the first quarter of 2009, among the 17 prefecture-level cities in the province, Shennongjia was bottom as usual, with less than one seventh of Tianmen's GDP, which was placed last but one.

"How can we ignore the fact that we are always last in the list of cities in Hubei by GDP?" sighs Xiang Changyou, director of the local development and reform commission. How to resolve this problem?

During China's 2009 parliamentary meetings in March, Qian Yuankun, officer of Shennongjia Forest District, put forward the idea of ecological compensation for Shennongjia, which gave rise to considerable debate.

Shennongjia Nature Reserve lies between the Yangtze and Hanjiang rivers, with 2,618 square kilometers of forest. According to Qian, every year trees here release over 3 million tons of oxygen and absorb about 300,000 tons of carbon dioxide, 1 million tons of dust and nearly 2 million tons of toxic gases. Additionally, as a natural reservoir, Shennongjia Forest District has water storage capacity of 3 billion cubic meters, all of which makes an enormous and invisible contribution to the surrounding areas. The local officials argue that Shennongjia should therefore receive ecological compensation, as this area has sacrificed many opportunities to improve economic development in order to protect its natural environment.

Golden monkeys living in the Shennongjia Nature Reserve in central China's Hubei Province. [Xinhua]

Local residents regularly complain that they are rich in forest resources, mineral resources, Chinese herbal medicines, and animal species, but felling, mining, digging herbs and hunting are all forbidden in Shennongjia. How can they escape poverty?

According to Liu Shengce, vice secretary of the local authority, Shennongjia was ranked as a state-level poverty-stricken county in 1992, and to this day it is still very poor. Xiang Changyou told China Newsweek, "In recent years, although our government has talked about ecological compensation many times, there is no specific policy at all. At the end of 2008, Shennongjia was finally confirmed as a pilot for a national ecological compensation system. However, the sum of 500,000 yuan (US$73,206) that was distributed was a drop in the bucket in the context of the present poverty level of Shennongjia."

Chen Wei, a ranger in the forest zone, is paid 1,100 yuan (US$161) each month by the largest forest farm – higher than a ranger's monthly salary of 800 yuan (US$117) on other farms. Even so, he and his family live in tight economic circumstances.

Shennongjia's per capita income is about 800 yuan per month. However, as it lies deep in the mountains and the road system is very backward, communication with the outside world is slow. This adds to the cost of living, and makes local people's life that much harder.