Phases of dynamical change are taking place in many developing countries causing land-use change. In China there has been enormous economic growth since 1978 followed by impacts on the environmental, social and economical conduct of the society. One of the counter actions taken by the Government to halt the environmental degradation in the Loess Plateau has been the introduction of the Crop Conversion Program in 1999, stopping agricultural activity in slope areas, mainly used by small-scale farmers. At the same time climate variations have also been evident in the area with decreases in rainfall and increases in temperature since 1970. The aim here is to examine what vegetation changes are seen on large scales in the area from 2000-2002, and how they correlate to local land-use changes. We then investigate how the land-use changes correlated with climate variations and/or policies and reforms. The data included in this integrated assessment includes remote sensing information from MODIS and ASTER images, climate and statistical data as well as farmer's participatory data. The results show that the large-scale vegetation has increased and that correlates well with dramatic local land-use change caused by the policy implementation. This however is not correlated with the climate variation found during this time (both lagged and simultaneous) which show a less favorable vegetation condition; all very well perceived by farmers. Hence the direct force behind the extreme land-use change is more associated with policy and economics than climate.