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This paper studies the relationship among population, poverty, and the environmental factors, and the impact they have had on China's land, water, forests and pastures. It does so by examining the extent of environmental degradation and China's success in controlling its environmental problems is reviewed; by investigating how the leadership has tried to develop a legal framework and series of institutions to carry out environmental policy; and by providing empirical evidence demonstrating the determinants of the successes that China has achieved in surmounting (or slowing) some of its environmental problems. Five of China's rural resource concerns are surveyed in this paper: water pollution, deforestation, destruction of the grasslands, soil erosion, and salinization. The paper finds that government policy has not been effective in controlling rural resource degradation primarily because it has limited fiscal resources and poorly trained personnel, and under these constraints the government has delegated responsibility for environmental and resource protection to the ministries of agriculture and forestry, two institutions that have an incentive to favot pro-production policies. Instead, China's efforts to alleviate policy, integrate markets, and control population appear to have helped mitigate a number of adverse environmental consequences of China's development effort of the last 40 years.