Abstract: Based on the investion to several major seed orchards of Chinese fir in Fujian Province, this research studies the costs, profits and economic effect of producing seed orchards of Chinese fir, by means of systematic methods of economic analysis. The economic effect of seed orchards falls into two parts: microeconomic effect and macroeconomic effect, which arc studied separately. The result of this lesearch shows: the current seed orchards of Chinese fir are not profitable fiom the point of view of microeconomrc effect, they can not bt justified or support themselves only by the seed revenue. The macroeconomic effect is extremely high, the IRR is as high as 17.98% and the return-cost ratio is 145.91. The factors which influence the economic effect of seed orchards and their sensitivities ate studied in sensitivity analysis.