Together grasslands and deserts make up half of China's total land area. The immense and productive grasslands are largely concentrated in Inner Mongolia, Ningxia Autonomous Region, parts of Qinghai and Tibet. The natural wildlife they support includes three species on the verge of extinction: Przewalski's horse, the Asiatic wild ass and the Bactrian camel (the ancestor of domesticated camels). Others, including the Tibetan gazelle, are threatened by the influx of gold miners and truck drivers carrying goods to and from Tibet, who poach animals for food and trophies. Millions of domesticated sheep and cows are grazed on the grasslands of Inner Mongolia, leading to severe depletion of the natural carrying capacity and increased threat of desertification. There is often direct competition between domestic animals and natural fauna. Herdsmen poison or trap carnivores, and sometimes destroy forests by burning or girdling trees to increase pasture area. The government has recently stepped up efforts to control the conversion of grasslands to pasture, but lacks enforcement and patrol manpower.

Deserts make up one-fifth of China's total territory, largely in the northeast. Arid steppes cover additional areas in the Altai, Tian and Kunlun mountains in the far west, a region blocked from the southwestern monsoon by the Tibetan plateau and from the southeastern monsoon by its distance from the sea.