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Ecological compensation is being applied to deal with transboundary external effects caused by water resources conservation or exploitation in China. A concept of water resources co-conservation and sharing was applied to burden the upstream conservation cost and to share the benefit in the whole river basin. Xin’an River Basin, related to two provinces in East China, was taken as the study area. The current territorial scales of the co-conservation area and the benefit sharing area were determined. The total actual water conservation cost for Xin’an River Basin was estimated to be about 488 million CNY in 2006. By analyzing the transformation of protection costs and benefits between different districts and sections, benefits brought by water to different beneficiaries were also estimated. The conservation cost was distributed to the water users or governments in the whole sharing area according to the proportion of shared benefits.

On the basis of generalizing the conception of river ecological compensation(eco- compensation) reasonably, according to river characteristics and people’s practice experience, the paper gives discussion on river eco-compensation mechanism from the angle of coupling system. By analyzing the characteristics during theoretical study and practical experience of river eco-compensation, to ameliorate the limitations, the paper describes the framework of effective river eco-compensation mechanism. For Xin'an River as an example, in the light of the present compensation theory, the author gives river eco-compensation mechanism overall framework based on co-construction and sharing ideas. Learning from the research progress and achievement of different areas, the paper gives typical examples analysis about trans-boundary river eco-compensation implementation on water quantity and quality joint operation level. Finally, the paper puts forward the improvement measures and further research emphasis of river eco-compensation.

It is necessary to promote the harmony between human and nature, and the equity between upstream and downstream areas for river basin sustainable development. Ecological compensation is being applied to pay for ecological services and transboundary external effects caused by ecological conservation or exploitation in China. A conception of co-conservation and sharing, which means to burden the conservation cost and share the benefit in the whole river basin, is presented in this paper to solve the difficulties with current research and implementation of ecological compensation in China. The scale of co-conservation area is determined by geographical characteristics, while the sharing area is established depending on economic factors. Xin’an River Basin, related to two provinces in East China, is taken as the study area. The territorial scales of the co-conservation area and the benefit sharing area are determined. By analyzing the transformation of environmental protection costs and benefits between different districts and sections, the distribution of conservation costs is conducted in the whole sharing area. Furthermore, a framework for co-conservation and sharing mechanism is discussed.