Conclusion and Discussion This paper examines the relationship between economic growth and forest resources in Sichuan province, one of the largest, most forested provinces in China. And we found a statistically significant U-shaped relationship between the two. We used descriptive statistics, multivariate analysis and spatial econometric method to identify this relationship. The estimated regression results provide a weak evidence of the existence of EKC for forest resources in Sichuan, and the estimated turning point of the EKC was 85,191 Yuan (US$25,056.2), which is much higher than the current average income level in Sichuan. Because of the short time interval of our data (from 1995 to 2000), however, the existence of EKC and the turning point may need stronger evidence. In fact, the high turning point can even be interpreted as that there is no EKC exist. Nevertheless, this study contributes to the EKC literature by providing another empirical evidence for forests. This study illustrated the bias in the parameter estimates due to unobserved heterogeneity. The comparison between estimated pooled cross-sectional model and first-differenced model shows that all fixed effects need to be controlled to get more precise estimation. The study also illustrated the importance of taking into account of spatial correlation in land use data. By employing a spatial error model, we estimated the relationship between economic growth and the forest cover change with more precision. The sign, significance and magnitude of our estimated coefficients changed, meaning that without accounting for spatial effects we would have over or under estimated the effects of certain explanatory variables on the forest cover change. Most importantly, our findings, especially the U-shaped relationship between forest resources and GDP per capita with the high turning point, suggest that Sichuan is still in the first stage of economic growth in current, and appropriate forest policies incorporate policy for growth need to be implemented in order to slow down or to reverse the trend of declining forest while also continuing to achieve economic growth.