China's hardly the only country to have non ideal nature reserves; but problems can be remarkable, as in this article - excerpts here:
... as of 2004, between 1.25 and 2.85 million people were believed to be residing within core zones of nature reserves around China. Many protected areas are “paper parks”, with at least one-third lacking staff, management and funding. The Nature Reserve Law of 1994 did nothing to remove control of the land under protection from the government that was managing it when it became a reserve. Moreover, except for national-level reserves, it failed to provide a guaranteed source of funding for reserve administration and staffing. This has led to a situation in which reserve managers’ primary goal has become revenue generation rather than biodiversity conservation.
The rush to designate nature reserves of all kinds from the 1990s onward can be attributed in part to China's desire to win recognition on the global stage, and to deregulatory strategies that have allowed local governments to play an active role in their designation - often in the hopes of achieving the administrative status, political rewards and tourist income that can accompany reserves.
This has led to reserves with little significant biodiversity value, or that are too small to be ecologically viable. Furthermore, the existence of protected areas rarely trumps the lucrative opportunities presented by satisfying China’s large resource demands. Mining operations have been developed in even the highest level protected areas, including in Shangri-la and Deqin in Yunnan province as well as the Sanjiangyuan reserve in Qinghai province, often by companies that are either state run or with close ties to highly placed state officials, and against the wishes of local residents.
As in other parts of the world, nature reserves in China have often taken away community access to resources. Many reserves were established on land that had already been allocated to individual households under the Household Responsibility System. After a nature reserve is established, local people are sometimes charged a fee for the right to continue traditional practices (such as cardamom cultivation), negatively impacting their livelihoods. In other cases, households are resettled, and may fail to receive compensation packages, or encounter difficulties establishing new livelihoods, cultural disruption and coercion.