“Ecological Bank” brings benefits to Chinese farmers – opens another door for green funding

Liangshan Bank

Thanks to the local “Liangshan Bank,” green resources that were once deemed useless by farmers are now assets.

The name “Liangshan Bank,” or “the bank of two mountains,” came from the “two mountains” concept of Chinese leadership, according to which “lucid waters and lush mountains are invaluable assets.”

Apart from being a traditional lender, Liangshan Bank acts as a platform to integrate green resources and transform them into assets with development value. The Liangshan Bank acts as a platform for integrating the management rights of green resources to make better use of them. Those who have deposited resources in the platform could get rent, dividends and low-interest loans.

Gaofu Forest Farm in Zixi county, Jiangxi, another of the program’s beneficiaries. [Photo/Xinhua]

Over 230 villagers in Liuxi Village in east China’s Anhui Province have deposited their unused forest and farmland resources. Previously, the scattered lands were hard to utilize and low value-added. By integrating them and introducing great projects, the farmers obtain multiple benefits.

“By drawing the saving and loan pattern of the bank, we integrate the fragmented ecological resources from farmers and approach suitable investors to manage them,” said Yao Hongwu, the village’s Party secretary.

To date, the Liuxi Liangshan Bank platform has integrated 151.7 hectares of land resources, which, after bringing in investment, have been developed into large-scale plantations of white tea, torreya and orchards, and created jobs for local people. In 2020, the local farmers earned 3.6 million yuan by working in the plantations, and the income of rural collective businesses reached 547,000 yuan.

Other regions across China are also exploring the Liangshan Bank model to transform the unique resources in rural areas into assets, increasing farmers’ income. In Huzhou, east China’s Zhejiang Province, where the “two mountains” concept originated, Liangshan Bank has been widely established. The locals have formed an alliance to promote cooperation between counties and districts to manage resources, shape brands and introduce projects.

East China’s Jiangxi Province has established new platforms including “Wetland Bank” and “Ecological Products Bank,” and developed green finance products such as loans for forest resources and ancient villages. Besides forest, farmland and water area resources, they also plan to integrate and utilize vacant homes to turn them into beds and breakfasts to develop rural tourism.

Yao Hongwu said that “by fully utilizing these rural resources, we not only offer more jobs for local farmers, but also improve the environment and inject vitality into the countryside.”

National campaign to realize ecological value

Anji county in Zhejiang province, in north-western China has spearheaded a national campaign aimed at realizing ecological product value-defined by the central authorities as safeguarding the security and regulatory function of the ecosystem and natural factors such as a good living environment that includes fresh air, clean water and a pleasant climate.

Absorbing carbon dioxide, producing oxygen, cleaning the air, biodiversity conservation, desertification control and wind prevention are among the key regulatory functions listed in a 2010 notice from the State Council relating to the national functional zoning plan.

According to the Anji county government, the program has integrated nearly 6,700 hectares of forest, more than 200 vacant homes, and bodies of water with a combined surface area of 1 square kilometer. The bank has developed 19 projects, many of them related to ecotourism, helping to raise 11 million yuan for rural collective businesses and creating 1,430 job opportunities.

In late April, the General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly published a guideline, pledging to establish a basic policy framework to realize the value of ecological products by 2025.

Central authorities currently use transfer payments as part of the government’s policy to redistribute money for needy regions to reward key areas for ecological conservation.

The Ministry of Finance has said the central government plans to allocate 88.2 billion yuan in transfer payments to such areas this year, a year-on-year rise of 11 percent.

Win-win situation

According to a recent paper compiled by the Academy of Macroeconomic Research, establishing a system for realizing the value of ecological products will encourage the government, enterprises and the public to contribute to environmental protection.

The system will benefit those who protect the environment, reward those who use the environment, and award compensation for damage caused to ecosystems. In addition to making environmental conservation a lucrative business, the system could result in economic development and environmental protection complementing each other, which is happening in Zixi.

Jin Jianhua, director of the finance office in Zixi, said Jin Zhufu is not the only farmer in the county to benefit from the Liangshan Bank program, which is expected to address the low incomes made by rural residents from rich forestland in their home areas.

With a coverage rate of nearly 88 percent, forests contribute just 1 percent of the income earned by people living in the county’s rural areas, Jin Jianhua said.

He added that the program has integrated about 6,700 hectares of forestry resources, and the county aims to double this figure in five years. Thanks to the program, the county has introduced ecotourism and carbon-sink programs in many forest areas previously considered to be economically low-valued. A carbon sink absorbs and stores carbon compounds by removing carbon dioxide from the atmosphere.

“Market vitality has been unleashed as a result of the Liangshan Bank program acting as a platform to integrate green resources,” Jin Jianhua said.

Art students sketch Dajue Mountain in Zixi.[Photo/Xinhua]

Loans granted for rural eco-tourism

Lin Tao, 40, who runs a decorating business in Zixi, longed for years to open a rural resort, but had failed to realize his ambition due to a lack of funds. Close to his home, tourism is thriving in the Dajue Mountain scenic area.

Lin was granted a loan of 5 million yuan after mortgaging the management rights to about 200 hectares of forest to the program for about 20 years.

He used the loan to transform three abandoned rural houses he rented into a rural resort. With 12 rooms and 18 beds, the resort opened on July 1. “Business is good,” Lin said. Rooms are fully booked at the resort during weekends and it has an occupancy rate at least 60 percent on work days, he said, adding that a room with two beds costs 800 yuan a night.

Lin said the tourism boom has created so many job opportunities that he has found it extremely difficult to hire workers. The average monthly salary for waiters at local resorts has reached 4,000 yuan.

According to the Jiangxi Bureau of Statistics, per capita disposable income in the province was 28,017 yuan last year.

“Residents used to leave the area to sell chickens and vegetables, among other produce,” he said. “Now, tourists consume all such produce.”

In 2002, Zixi began closing polluting companies while refusing new investment in traditional heavy manufacturing industry. Tourism contributes 65 percent of the county’s GDP, according to the Zixi government.

Natural resources audit system hold officials accountable

Meanwhile, the county has stepped up efforts to improve the accountability system for environmental protection.

After an ecological appraisal system was introduced in 2002, the county published a plan in 2016 to audit officials about to leave office for their performance regarding natural resources.

To date, 18 officials have been removed from their posts or demoted after failing to pass the audit. More than 30 officials have been promoted for good performance in environmental conservation.

The natural resources audit was included in a decision taken at the third plenary session of the 18th CPC Central Committee in 2013, which also vowed to establish a lifelong responsibility system for damage caused to the ecosystem.

Li Ximing, head of Zixi’s audit bureau, said, “Guided by the ecological appraisal and audit, cadres’ awareness of ecological conservation and green development has been greatly improved.”