Abstract: This thesis, based on the analyses of the decree and functions of the reform of Chinese environmental economy, inspired by the successful experiences the European countries have had from their policies on their environmental economy like the long term contracts between the governments and the farmers, subsidy policy, and tax cut or exempt policy, and after reexamining some other reviews of the research results of the reforestation policy in the west areas, come up with the preferences to the policy, which include favoring long term subsidies, respecting the will of farmers, and trying to improve the forestry investment environment, and it deals with how to run the industrial operations and management when the reforestation policy begins to achieve results.