On the island of Hainan, China, the provincial government has recently committed itself to sustainable development, which requires the integration of social, environmental, and economic factors in decision making. However, while Hainan’s recent Eco-province designation establishes environmental and economic factors as the basis of policy development, it overlooks the equally important social component of sustainability, in which social needs and values are key considerations. This paper presents the results of a study on Hainan in 2002, with government officials, forestry workers, and the Li, an indigenous minority group, and places the province’s situation within the context of both the larger changes underway in China, and the theory and practice of sustainable forestry. The research results show that the government of Hainan has not yet been able to manage both social welfare and environmental and economic issues, demonstrating the difficulty of implementing sustainable forestry and of balancing short- with long-term goals. The inclusion of Li communities in forestry-related decision making could reduce tensions between local communities and forestry management and also improve the sustainability of the government’s forestry practices.