Abstract: How to speed up the process of forest certification in China has been a dilemma of our government and forestry enterprises. When deciding whether to apply for forest certification or not, the enterprise's pursuit of maximizing the financial benefits plays a leading role, but the government's support and promotion is also an important aspect. This paper analyzes and compares the costs and benefits in details, and then provides a reference for the government to design compensation mechanism from adding forestry enterprise's financial benefits.

Key words: forest certification, financial analysis, incentive and compensation mechanism