More than a quarter of China's total land area has been classified as desertified and the degradation is adversely affecting the lives of more than 400 million people, or 30% of its population.
It costs the country billions of dollars every year.
China now has 2.64 million sq km of areas under desertification, or nearly 2.5 times the country's total farmland, government statistics show.
But through a series of policy measures China has been implementing over the past few years, positive results are finally being seen.
Since 1999, the area of desertification has been cut by 37,924 sq km, and is being reduced at an annual rate of 7585 sq km.
Six forestry projects launched in 1998, which target the planting of 760 million hectares of trees, have so far produced some 20 million hectares of forest.
To hold back the desert, China is offering farmers subsidies to plant trees instead of growing crops.
State media said this project, with a target of converting 14.66 million hectares of farmland into forests and to cover 17.33 million hectares of barren land with trees by 2010, is starting to pay dividends.
But despite the achievements, on the eve of the UN-designated World Day to Combat Desertification and Drought on Friday, experts described the situation as "precarious".
They warned it could easily reverse due to adverse climate change or slackening of policy measures.
"At the moment, the situation has improved, but from a macro-level ... it is still full of uncertainties and is vulnerable to changes," said Ci Longjun, a desertification expert at the Chinese Academy of Forestry.
"The ecological system is very fragile and if any one element in the chain is damaged, the imbalance will easily lead to a collapse in the eco-system"
Chinese Academy of Forestry
"The ecological system is very fragile and if any one element in the chain is damaged, the imbalance will easily lead to a collapse in the eco-system."
Experts said population growth and the over-utilisation of land resources, the drive for rapid economic growth and the huge demands for timber have speeded up desertification in many areas.
Reforestation is often difficult amid water shortages, drought and harsh ecological conditions, and it can easily take decades to rehabilitate a desertified area.
Poor management often results in the destruction of vegetation, while excessive grazing, logging and mining continue to take their toll, even though there are regulations banning some of these activities.
Zhu Lieke, deputy director of the State Forestry Administration, admits problems lie ahead.
"Notable progress has been made in combating desertification and sandification in China ... but the situation is still severe," he said.
"We do face many challenges - desertification and poverty are linked together. Over 70% of the impoverished places are in desertified areas."
Overgrazing, in particular, often leaves grasslands barren for up to several decades, while also eradicating wildlife habitat, said Ci.
"When the grasslands can't take the pressure any more, the ecological system will collapse," she said. "The sabotage will have a tremendous impact on the grasslands for many years to come."
Illegal mining in poorer northern and northwestern regions such as Inner Mongolia, Xinjiang, Gansu and Qinghai, fuelled by their thirst for economic growth, is also hampering efforts.
"Our country is in the middle of industrialisation. The proportion of heavy industry is gradually increasing and the demand for coal is growing," said Zhu.
"I think the severe situation will continue until China has completed its industrialisation progress"
Zhu Lieke, deputy director,
state forestry administration
"I think the severe situation will continue until China has completed its industrialisation progress."
Experts said China must step up its investment, research and technology as well as strictly implement environmental laws in its battle against sand.
"We regard the anti-desertification effort as a project of morality," Ci said.
"We are enjoying what has been left behind by our ancestors, but we are going to leave behind desertified lands to our descendents. To properly handle this problem is a matter of responsibility to our children."