China is considered one of the most seriously eroded countries in the world. The many causes of this degradation can be divided into natural, human-induced and root causes. The consequences of watershed degradation are severe and reach even beyond the country's boundaries. Addressing this issue requires a sustainable participatory and integrated watershed management approach. The Loess Plateau Watershed Rehabilitation Projects, implemented by the Ministry of Water Resources and co-financed by the World Bank has provided a model that is widely recognized for its great success. This calls for a paradigm shifting from a sectoral, top-down, technical and physical watershed intervention to a holistic, participatory, multisectoral and inter-agency collaborative, and result based watershed development.