About one third of the world's land surface is covered with arid and semi-arid areas. It is predicted that global warming will increase desertification by 17% before 2050. At present, desertification is making approximately 12 million hectares every year useless for cultivation and grazing worldwide. Over 250 million people and one third of the earth's land surface are directly threatened by desertification (Diallo 2003). China is one of several countries severely affected by desertification; almost 90% of natural grassland has been affected to differing degrees (Lu & Yang 2001; State Environmental Protection Administration of the People's Republic of China 2002). The land desertification rate in China was 1560 km2 yr−1 in the 1970s. This rate had increased to 2100 km2 yr−1 by the 1980s, and was 2460 km2 yr−1 by 1995 and 3436 km2 yr−1 in 1999 (Zhu et al. 1999). Areas that have shown increased desertification are derived from degraded grassland or cultivated land (Zhang & Cheng 2001). One very serious direct consequence of grassland degradation is thought to be the frequent occurrence of sandstorms. Whereas China was hit by almost 70 sandstorms over the past century (Qing 2002), with an average frequency of one sandstorm every three years in the 1940s, this had increased to one every two years by the 1960s. By the 1990s, the sandstorms in north China took place several times a year and this increased further to 12 in 2000 and 18 in 2001 (Jiang 2002a). The frequency of sandstorms in north China appears to be a direct consequence of grassland degradation. Taking Hunshandak Sandland in Inner Mongolia as an example (Fig. 1), the proportion of sand dunes that are shifting rose from 2.3% in the 1950s to 50% in the 1990s, while available grasslands declined by some 40% between the 1950s and the 1990s. The economic cost of these sandstorms has prompted the Chinese government to commit substantial funds to meet this loss, but the degradation is ongoing in the area and the living standards of local people are still low (Liu et al. 2003). It is opportune to adjust strategies to reach two objectives simultaneously, namely to restore the degraded grassland, and improve the living conditions of local people. To illustrate this, we focus on Zhenglan Banner (county), which is representative of the whole Hunshandak Sandland in terms of climate (Ma et al. 1998), economy and ecology (Fig. 1). Zhenglan Banner has a total area of 100 600 km2, a human population of 78 730 and stock raising is the dominant industry, the average income per person per year being US$ 225 (Bureau of Stock Raising in Zhenglan Banner 2002).