The northeastern provinces, once the richest region of China with abundant natural resources and flourishing heavy industry, are grappling with some of the worst unemployment the country has seen. In addition to laid-off workers from state-owned factories, the so-called "rust belt" must also contend with a rising number of loggers whose livelihood is threatened by bans on felling trees and cheap imports of Russian timber. At a recent conference on the role of the private sector in developing national forests, the Ministry of Forestry solicited proposals on ways to use private enterprise to revitalise economically depressed northeastern areas. Successful schemes in the eastern and southeastern provinces offer some hope. Advocates of reliance on private enterprise cite the example of eastern China's hilly Zhejiang province, which thrives on manufacturing plywood, wood flooring, furniture and horticulture. The forest is state owned but 90 per cent is privately managed under a contract system. Private investment in the forestry sector has created three million jobs in the past five years, according to official statistics. But in the country's north, forests are still owned and managed by the state. The residents there are among the poorest of China's rural areas. Of the 592 poorest counties in China, 492 are in mountainous areas living off steadily diminishing forest resources. While last November's 16th Communist Party Congress affirmed the role of private entrepreneurs in developing the economy, many experts question if private management can help boost rural incomes while protecting China's remaining forests. China has 22 per cent of the world's population but only 2 per cent of its forestry resources. Parcelling out the forest to loggers under a contract system would give each household about five hectares in the 135 national forest districts in the northeast. Products would be handed over to the state, and opponents argue that because of this, households would be unlikely to plant forests and the depletion of resources would accelerate. They point out that experiments in the 1980s in Jilin province resulted in wanton destruction. After 10 years, the hillsides were bare. "Parcelling forest to private households will bring momentary prosperity but permanent damage," said Feng Guoqiang, a researcher working for the Ministry of Forestry. Economic hardship in the northeast's logging communities has become worse in recent years, with cheap Russian timber flooding in. Instead of helping protect Chinese forests, imports have knocked down the price of domestic timber, forcing loggers to fell more trees, Mr Feng said. "As long as production quotas are set in monetary terms, the pressure on cutting trees will continue," he said. He said the government needed to offer retraining in traditional logging communities and help families living deep in the forests with grain and coal subsidies to ease hardship. "The market economy cannot solve all the problems," said Mr Feng. South China Morning Post