Stricter protected areas in China coincide with more firm openings and closures and higher nature benefits

Balancing conservation with local economic development remains critical challenge for protected areas globally. While environmental regulations can trigger economic restructuring, how these dynamics affect long-term ecosystem service values under different resource conditions is poorly understood. Here we analyze over 50 million enterprise records across 6638 Chinese protected areas (2000–2020) using a multivariate regression framework linking policy strictness, resource endowments, industrial transfer, and ecosystem service values. We find that stricter protected area policies are associated with higher industrial turnover, shifting regions from net industrial inflow to dynamic equilibrium. Enterprise entry is generally associated with stronger ecological benefits than exit, although both pathways contribute to diversified economies. Tourism resources emerge as a dominant factor shaping transfer dynamics. However, certain industrial transitions are accompanied by localized trade-offs, such as reduced soil conservation. These findings suggest that context-specific industrial restructuring, rather than industrial exclusion alone, is essential for aligning ecological sustainability with local livelihoods. More firms open and close near stricter protected areas and ecosystem services tend to be higher with local trade-offs, according to a study of 50 million Chinese firm records using multivariate regression across 6638 areas.