The central government will spend 220 billion yuan ($33 billion) over the next decade to protect China's natural forests.
The State Council, China's Cabinet, said on Wednesday the country will carry out the second phase of the Natural Forest Protection Program between 2011 and 2020.
The target is to increase forest coverage by 5.2 million hectares, wood stock by 1.1 billion cubic meters, and forest carbon sinks by 416 million tons, the State Council decided at an executive meeting presided over by Premier Wen Jiabao.
The program, which began in 2000, is aimed at ending the felling of trees in natural forests for commercial purposes in the upper reaches of the Yangtze River and the upper and middle reaches of the Yellow River.
Forest farms in Northeast China and the Inner Mongolia autonomous region will also have to reduce logging.
The policy was adopted by the central government after massive floods ravaged China in 1998, a disaster that conservationists largely blamed on the loss of forests and wetlands.
The ecological rehabilitation program proved effective in improving the country's fragile conditions, said the founder of the Beijing-based environmental protection organization Da'erwen, Feng Yongfeng, who oversees a research project on the country's forest management policies.
According to the State Council, since 2000 forest coverage has increased by 10 million hectares and the felling of 220 million cubic meters of wood stock has been avoided.
From next year, natural forests surrounding the Danjiangkou Reservoir in Hubei province will be included in the conservation program in a bid to protect the sources of the country's South-to-North Water Diversion Project.
Feng said policies should be designed to encourage participation from local communities that live on the forestry resources.
Natural forests are those that have been undisturbed by human activity for a relatively long time, according to Liao Chengzhang, a researcher with the State Forestry Administration.
A 2006 report by Greenpeace stated that China had only a small area of intact forests left -- less than 2 percent -- most in the Tibet autonomous region, Yunnan province and Northeast China.
The abundant varieties of plants, insects and microorganisms in natural forests can provide important eco-services, such as water and soil conservation. They can also attract and control carbon emissions better than man-made forests.