Afforestation is very pivotal in realizing China's goal of carbon neutrality. Expanding forest area and enhancing the forest carbon sequestration has been identified as an important strategy in the national climate mitigation plans of China. However,current research has predominantly concentrated on assessing afforestation areas based on ecological criteria,overlooking the influence of economic factors,especially those related to water resource costs in afforestation activities. Incorporating the cost of water resources into an afforestation economic decision-making framework,this study utilizes GIS and statistical data to assess the impact on ecological and economic afforestation areas and carbon sequestration potential in China. The findings revealed that: (1) China's ecologically viable forestation area is 1509.31 Mhm². China's economically forestation carbon sequestration potential amount to 75.18 Mt CO₂ annually. The cost of water will cause China's ecologically viable forestation area to decrease by approximately 50% and China's economically forestation carbon sequestration potential to decrease by around 30%. Thus,the cost of water exerts a significant constraining effect on forestation. (2) With the consideration of water resource costs,the existing carbon market can merely stimulate an enhancement in the carbon sequestration contribution of forestation from 3.16% to 4.91%,expanding to a range of 3.75% to 5.83%. This suggests that the current carbon market has a relatively modest incentive effect on augmenting the carbon sequestration potential of forestation. (3) China's reforestation activities,taking into account the constraints of water resource costs,exhibits a carbon sink potential of 43.07 Mt CO₂ per year. By comparison,this figure surpasses the carbon sink potential of afforestation. Furthermore,the cost of water resources leads to a 27.54% decline in the carbon sink potential of reforestation,which is lower than the 38.91% decline for afforestation. The reduction in carbon sequestration potential resulting from water resource costs is comparatively lower for reforestation when compared to afforestation. Thus,it is advisable to promptly integrate the cost of water resources into afforestation decision-making processes and to refine the carbon trading market mechanism,emphasizing the exploitation of the carbon sequestration potential of reforestation. The research is of great practical significance for improving the utilization efficiency of land resources,formulating flexible ecological restoration policies,and scientifically understanding and fulfilling the carbon neutrality contribution of afforestation in China.