VI. Improving the System for Payment-Based Resource Consumption and Compensating Conservation and Protection Efforts

27. Accelerating price reform for natural resources and their products

In line with the principles of cost-benefit balancing and based on full consideration of society' s ability to tolerate price increases, a cost assessment mechanism for natural resource exploitation and consumption will be established to incorporate the interests of resource owners and any ecological and environmental damage into the pricing mechanism for natural resources and their products. Price regulation over natural monopolies will be strengthened. A system will be created for overseeing and reviewing the pricing cost and a mechanism will be established for making pricing adjustments. Procedures for decision-making on pricing and the information disclosure system will be improved. The overall price reform of water for agricultural purposes will be moved forward. A system of progressive pricing for water will be put into full practice for non-household water consumption that exceeds plans or quotas for water consumption, and a system of tiered pricing for urban household water consumption will be fully implemented.

28. Improving the payment-based system for land use

The scope of state-owned land that is operated on the basis of a payment-based use system will be expanded. The proportion of land for which use rights can be transferred through bidding, auction, or listing will be enlarged. Less land will be allocated for non-public use. Income and expenditures related to selling use rights for state-owned land will be incorporated into public budgeting. Industrial-land supply methods will be reformed and improved, with the implementation of flexible transfer periods, long-term leasing, lease-then-sell arrangements, and lease-and-sell arrangements being explored. The mechanisms for setting and appraising land prices will be improved. The system of grade-based pricing for land will be refined. The relationship of land-related transaction and lease expenses with taxes and fees will be straightened out. An effective regulatory mechanism will be put in place to achieve reasonable price parity between industrial-use and residential-use land. Prices of industrial-use land will be raised, and the proportion of industrial-use land will be reduced. Methods such as land contracting and leasing out will be explored to improve the payment-based use system for state-owned land for agricultural use.

29. Improving the payment-based system for mineral resource use

Improvements will be made to the system for the sale of mining rights, and means suited to a market economy and the nature of the mining industry will be established for the sale of prospecting and extraction rights. In principle, the sale of these rights will be market-oriented, and the income and expenditures related to the sale of state-owned mineral resources will be incorporated into public budgeting. The property rights of owners, investors, and operators during the processes of payment-based acquisition, possession, and exploitation will be clarified, and research will be conducted into the development of a system of national premiums for the use of mineral resources. Standard fees for the use of prospecting and extraction rights, and minimum investment in mineral prospecting will be adjusted. Progress will be made in building a nationally unified mining rights exchange, and efforts in information disclosure on the sale and transfer of such rights will be intensified.

30. Improving the payment-based system for use of sea areas and offshore islands

A mechanism will be created for adjusting use fees for sea areas and uninhabited islands. An effective system will be established for the sale of use rights for sea areas and uninhabited islands through bidding, auction, and listing.

31. Accelerating reform of resource and environmental taxes and fees

The taxes and fees for natural resources and their products will be straightened out, their respective purposes will be clarified, and the appropriate scope of taxation regulation will be defined. Faster progress will be made in introducing price-based on resources. The scope of resource taxes will be gradually expanded to cover the use of all kinds of ecological spaces. A trial reform will be carried out in parts of northern China to levy a resource tax on groundwater. The development of legislation on environmental protection tax will also be accelerated.

32. Improving the ecological compensation system

Explorations will be made into establishing a diversified compensation mechanism, transfer payments to major ecological functional zones will be increased step by step, and the incentive mechanism that links ecological protection performance with fund allocation will be improved. Measures will be drawn up for implementing a mechanism, principally for local compensation, and supported by additional funds from the central budget, by which local governments compensate each other for ecological or environmental damage and ecological conservation efforts. Local governments are encouraged to launch ecological compensation trials. Efforts will continue in carrying out the ecological compensation pilot initiative for the Xin' an River ecosystem. Help will be given to carry out trans-regional ecological compensation pilot initiatives in the Beijing-Tianjin-Hebei water source conservation area, in areas along the Jiuzhou River in Guangxi and Guangdong, and in areas along the Ting and Han rivers in Fujian and Guangdong. Explorations will be made into carrying out pilot ecological compensation initiatives in the Yangtze River basin- an environmentally sensitive region.

33. Improving the mechanism for utilizing ecological protection and restoration funds

Given the need for systematic governance of mountains, forests, farmland, rivers, and lakes, the measures for utilizing and managing relevant funds will be improved and existing policies and channels will be integrated. At the same time as efforts are being made to comprehensively improve the conditions of rivers throughout their entire drainage basins,more funds will be spent on the protection and restoration of national ecological-security shields, such as the Qinghai-Tibet Plateau ecological shield, the Loess Plateau-Sichuan-Yunnan ecological shield, the northeast China forest belt, the northern China desertification-prevention belt, and the southern China mountainous belt.

34. Creating a recuperation system for farmland, grasslands, rivers, and lakes

A recuperation plan will be formulated for farmland, grassland, rivers, and lakes, adjusting the use of farmland in areas where there is heavy pollution or where groundwater has been over-extracted. Basic agricultural activity from land sloped greater than 25 degrees, which is not suitable for, and the ecosystem of which is harmed by, cultivation, will be gradually excluded from classification as basic cropland. A permanent mechanism will be formulated to consolidate progress in returning farmland to forest and grassland and converting grazing land back into grassland. Pilot projects will be launched to return cultivated land to lakes and wetlands. Efforts will be made to move forward with the pilot initiative for the restoration of heavy-metal contaminated soil in the Changsha-Zhuzhou-Xiangtan region, as well as the pilot project to comprehensively deal with the over-extraction of groundwater in northern China.