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1. Project Summary and Relationship to China's Agenda 21 This project seeks to improve the ecological environment and promote the development of the mountainous area surrounding Beijing. It also aims to develop the agriculture, eradicate poverty, restore the ecological balance, enhance the capacity of natural ecological defences for environmental conservation and to protect the water resource of Beijing. This project is based on programme areas 8A and 11E of China's Agenda 21, and is related to programme areas 11D, 11F, 11G, 14C, 14E, 14H, 16A, 16C, 16D and 17B.

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2. Background The mountainous area surrounding Beijing provides a natural ecological defence for Beijing. It is the surface water resource and fresh produce supply base for Jingjintang region. Thus, it plays a major role in the modernisation and environmental conservation of the capital Beijing. This area is also important for Hebeiís social and economic development, as the area covers 117,000 square km and has a population of 23 million. This represents 60% of the land area and 33% of the population of the province. However, the harsh natural conditions have kept this mountainous area inaccessible and poverty-stricken for a long time. The farmers and their families receive little education in the area: 60% of the farmers in the region are illiterate or semi-illiterate. Other problems include backward means of production, ecological imbalance, and serious erosion in 58% of the total mountainous area. The socio-economic base of the region is weak. Industry is at a primitive level which consequently induces serious pollution. Poverty is rampant, more than half of the counties are poverty-stricken and there are 2,000 impoverished villages. As a result of the vicious progress of economic impoverishment and environmental degradation, the cycle of poverty remains unbroken. This project complies with the National and Hebei Provinceís Ninth Five-Year Plan and the Long-term Targets of the Year 2010. Most of the contents and activities of this project have been placed in the Baqi plan and the Plan for the Mountainous Development in Hebei province. The National Plan of the Sanbei Shelter Forest and Agriculture in Rural Areas in Huang-huai-hai plain are also involved. In addition, this project is also based on the National Environment Conservation Plan and Hebei Provinceís Plan of Action for China's Agenda 21. Over the past 15 years, the Chinese Government and the Administration of Hebei province have made enormous efforts towards the restoration of ecological balance, conservation of the environment, improvement of production conditions and the eradication of poverty. The governments have also completed a series of projects on the research and demonstration of sustainable development of this region. A model called "Taihangshan Road" has been coined, which aims to introduce and maintain sustainable development of the mountainous area by means of technological innovation and support of the local people. A leading group and the office that seeks to promote conservation and development of the mountainous area have been set up in Hebei province and its related districts and counties. Until now, the government has established a few experimental stations, which includes the science experiment station of the Mountainous area in Qianxi county and the Eradication of Poverty Pilot area for sustainable development in Neiqiu county. Hebei Provinceís Mountainous Area Technical Development Office has been also set up in Shijiazhuang, and technical extensions have been planned. These centres provide a technical development base for municipal governments.

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3. Objectives

3.1 Long-term Objective This project aims to restore the ecological balance and enhance the capacity of the natural ecological defence system for the capital city. Furthermore, it plans to control the erosion of the upper reaches of the rivers through agricultural development and ecological engineering. This would create a sustainable development system, which will eradicate the poverty of the Mountainous Area surrounding Beijing.

3.2 Immediate Objectives * To establish 8 soil and water preservation areas and 8 eco-economical systems that preserve Beijing water reservoirs. The pilot area would cover 40,000 hectares and would prevent soil accumulation in reservoirs. * To establish 4 demonstration site with an area of 5,000 hectares to combat the desertification and eradicate the poverty of Bashang highland in order to return the ecosystem to its natural cycle and move towards sound sustainable agricultural development. * To renovate 9 demonstration villages of different functions which aim to restore ecological balance, control pollution, improve the environment, and set up the social basis for sustainable development.

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4. Outputs and Activities

4.1 Demonstration project to prevent and control soil erosion and land degradation, and to develop comprehensive agriculture in mountainous areas * To construct level ditches around the hills at Donghuangyu and Dacuizhuang, develop production of apple, Chinese chestnut, and crops that can be processed into cereal and oil; * To develop the comprehensive agriculture of a high-yield and high-quality at Maquaubao, Beishacheng in the basin of the Mountainous area; * To demonstrate a terraced fields programme at Mengjiazhuang and Zhaodian in hilly lands, grow wheat, maize and plant fruit trees; * To demonstrate ecological ditch programmes at Chengnanzhuang and Jiangshuigou, develop fruit production, cereal production and livestock farming. Monitoring Indicators: control of erosion in a land area of 20,000 hectares. The soil erosion rate in the region will decrease 15 percent. To increase the forest area total coverage by 10%, forest lands 4,000 hectares, cultivated lands 100 hectares.

4.2 Demonstration project to combat desertification * To combat desertification at Halagou and Changliang in Bashang highland. This will restore the grassland and forest belts, develop livestock farming and forestry, and improve the environment. * To ameliorate the sandy land at Beilongangxiaolin and Bata. The project will utilise sandy land resources rationally, adopt water saving irrigation techniques, increase vegetation coverage, develop fruit production, grassland, and crops that can be processed into cereal and oil. Monitoring Indicators: to harness 5000 hectares of sandy land, to increase high quality grassland by 3,000 hectares, increase meat production by 2,700 t; the project also aims to increase cultivated lands by 2,000 hectares and cereal production by 12,000 t, finally, to increase forest and fruit lands by 2,000 hectares and fruit production by 7,000 T.

4.3 Prevention and control of soil erosion and water pollution in the small water sheds of major surface water resources. The project aims to carry out integrated management in the following areas: * To carry out integrated management of Sunjiagou and Xiaoqui River in water resource protection: Water Resource Protection Area River Guanting reservoir Sunjiagou and Qingbiankou Miyun reservoir Jintaizigou and Tangquan Panjiakou Damaotou and Ganbo upstream of Baiyangdian Wanglongou and Tongtian Monitoring Indicators: the planning of integrated management for the small watersheds. Industrial waste water will conform to discharge standard. To increase forest area total coverage by 15 percent.

4.4 Mountainous region sustainable development village demonstration * To establish ecological villages in remote mountainous areas, which include Dalianzi, Hongquancun, Zijinguan, Changsanying, Nanzuo, Guyue, Daxujiagou, Gaojiayu, and Jiazhuang. Monitoring Indicators: the annual income of each person in the demonstration villages will reach 2,500 yuan, provide electricity to all these ecological villages, build county roads, and return all straw to field.

4.5 Poverty eradication demonstration in Bashang highland Taihangshan Mountainous Region . * Carry out poverty eradication programmes in Fongyuandian, Baicao and Yunzhou village of Bashang highland through improving and expanding the grassland area. This will develop and enhance the ranching industry in the area; * Carry out poverty eradication program in Xibaipo, Nanyun and Houjiazhuang villages of the Taihangshan Mountainous area through the introduction of herbals and fruit industries to the area and through the redirection of the irrigation system in the area. Monitoring Indicators: to develop 10,000 hectares of grassland, to increase forest coverage by 10%, fruit lands 500 hectares, fruit productive capacity 10,000 tons, meat productive capacity 5,000 tons, cereal productive capacity 8,000 tons, crude drugs 1,000 tons. The annual per capita income of each person will reach 2,400 yuan. Implementing Agency: Hebei Provincial Mountainous Technical Development Office

Time Schedule: January 1997 - December 1999

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5. Inputs

5.1 Chinese Inputs The Chinese inputs will be used for construction of the project, the purchasing of equipment and fine seeds, training, lodging and transport for Chinese experts and project management etc.

5.2 International Inputs International inputs will be used for purchasing the technologies and facilities for water supply and conservation, to integrate utilisation of resources, for surveying and monitoring, and for remote sensing and breeding. The international community will also provide managerial hardware/software and development support for the project. The fund will be used for research in natural disaster prevention as well.

5.3 Budget The total capital needed for this project is US$ 20.50 million. The Chinese side will raise US$ 13.50 million from domestic sources while foreign aid and investment will cover the other US$ 7.00 million.

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Table 1. Budget by Item (in million US dollars)

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Table 2. Budget by Output (in million US dollars)

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6. Benefits This project will increase the forest coverage by 10%, decrease the soil erosion area by 15%, abate the pollution of surface water resources surrounding Beijing, decrease the intensity of dust storms in Beijing, and decrease floods and droughts. This project will also help to eradicate poverty in the demonstration area, increase total cereal production by 48,200 ton, fruit production by 157,000 tons, meat by 14,500 tons, vegetable production by 50,000 tons, income by 1,500 yuan per person per year. 350,000 people will receive education and technical training in the demonstration area.

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7. Risks The major potential risk to the project is natural disaster which is almost impossible to control. It is necessary to evaluate the influence of natural disasters on the project in the area and analyse the potential risk for the demonstration projects, so that the benefit of the project will be enhanced as far as possible. This project can potentially create another environmental problem by introducing an enormous amount of pesticides in the area. Therefore, measures will be taken to minimise the use of pesticides.

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