A half-century policy of forest exploitation and monoculture in China has led to disastrous consequences, including degradation of forests and landscapes, loss of biodiversity, unacceptable levels of soil erosion, and catastrophic flooding. A new forest policy had been adopted in China called the Natural Forest conservation Program (NFCP), which emphasizes expansion of natural forests and increasing the productivity of forest plantations. Through locally focused management strategies, biodiversity and forest resources will be sustained, and downstream regions will be better protected from flooding. This new policy is being implemented with a new combination of policy tools, including technical training and education, land management planning, mandatory conversion of marginal farmlands to forest, resettlement and retaining of forest dwellers, share in private ownership, and expanded research. These policy tools may have wider relevance for other countries, particularly developing countries.