The degraded and secondary tropical production forests in China are in status of gradually converting to crop-trees and degrading in most forest-dependent communities mainly because of lack of scheme of Payment for Environmental Services (PES), while the degraded and secondary tropical protection forests (non-commercial forests) are in well protection and restoration because of implementing the Scheme of Forest Ecological Benefit Compensation Fund (SFEBCF) for Non-commercial Forests. In order to reduce deforestation and forest degradation, enhance environmental services and help improve forest dependent livelihoods in tropics of China, Lingshui Li Autonomous County of Hainan Province is selected as project area and one typical forest-dependent community (village) will be chosen as demonstrative area. Assessment report on environmental services derived from degraded and secondary tropical production forests in demonstrative area will be developed. Scheme of PES derived from degraded and secondary tropical production forests in demonstrative area based on community and other stakeholders participatory will be discussed, consulted, optimized, identified and implemented. Policy suggestions on the scheme of PES will be developed and submitted to local governments. This project originates from the ITTO Thematic Programme on Reducing Deforestation and Forest Degradation and Enhancing Environmental Services in Tropical Forests (REDDES).