October 2007

With the realization of China’s rapid ecological deterioration, partly caused by irresponsible logging, the Chinese government has in recent years taken a series of drastic measures to improve forest coverage. One important approach was to declare more than 61 million hectares of existing natural forests as the Natural Forest Protection Program (NFPP) zone spanning over seventeen provinces and autonomous regions, most of which is collectively owned forestland. A complete logging ban was instituted within the NFPP zone, and in non-NFPP areas, the cutting of trees in areas designated as ecological forests is also banned. These policy measures, while advancing the state’s legitimate objectives of protecting land from soil erosion and improving overall ecological status, have negatively impacted the livelihoods of forest farmers who rely on forest production for living. This paper will introduce and discuss regulatory takings laws in the U.S. and some European countries. Section II describes the regulatory takings laws that govern the definition of regulatory taking, compensation standards for such takings and procedural requirements for filing a regulatory takings claim. Section III proposes a series of recommendations on legislative reforms on China’s regulatory takings regime taking into account the unique characteristics of China’s property rights institution.