China's Looming Water Crisis

Joshua Bateman

25th February 2014

One unintended consequence of China's spectacular economic growth is a growing water shortage, reports Joshua Bateman. As rivers run dry, aquifers sink, climate harshens and pollution spreads, he asks: can China solve its water crisis?

As more water infrastructure projects are built, hundreds of thousands citizens must relocate every year to accommodate the construction.

In a report by the Chinese News Service, Jiao Yong, Vice Minister of Water Resources, said, "China has more than 400 cities short of water, some 110 of which are facing serious scarcity."
A study by the China's Ministry of Water Resources found that approximately 55% of China's 50,000 rivers that existed in the 1990s have ... disappeared.
According to Jiang Liping, senior irrigation specialist at the World Bank in Beijing, China is over-exploiting its groundwater by 22 billion cubic meters a year - yet per capita water consumption is less than one third of the global average.
"China faces a severe water scarcity issue in water resources right now and it's getting more serious because of rampant economic growth ... Right now, the economy takes too much water from the environment so the ecological environment has been degraded."
The Issue
According to a 2012 joint UNICEF and WHO study, 593 million Chinese have gained access to improved sanitation since 1990. However, even with the increased access to cleaner water, China still faces a significant supply deficit.
As more people migrate to cities and join the middle class, their water consumption increases. With urbanization, the use of toilets, showers, and washing machines increases as does the consumption of nondurable goods such as meat, alcohol, clothes and electronics, all of which require water for production.
The Water Footprint Network reports that Chinese annual per capita water consumption is 1,071 m3. Data from the Ministry of Water Resources show that in 2008, agriculture accounted for 62% of demand, industry for 24%, domestic for 12%, and replenishment for 2%.
However, industry and domestic will drive future demand. According to McKinsey data, in 2030 agriculture demand will account for 51%, industry 32%, and 16% will go towards municipal and domestic uses.
China's water efficiency is another problem. Industry in China continues to expand and compared to other countries, is highly inefficient. Liping said, "water use efficiency and water productivity in both industry and agriculture are very low."
According to Andreas Fruschki, Portfolio Manager of the $268 million Allianz Global Water Mutual Fund, "most emerging markets continue to rely on bottled water in plastic or tap water which is not potable and has to be boiled before consumption, which is expensive and inefficient."
A catalogue of problems
Another challenge China faces is logistics. More than 60% of China's water is in the southern part of the country, but most of the usage is in the north and coastlines.
As Debra Tan, Head of China Water Risk, a Hong Kong-based non-profit explains, "45% of China's GDP is derived from water-scarce provinces. It is not easy to grow your economy with limited water and geographical issues beyond your control."
Beijing and other northern cities get most of their water from underground aquifers. Over the last five decades, China has had to drill increasingly deeper to gain access to water.
According to research from author Lester Brown, key aquifers are declining by as much as 3 metres / 10 feet per year. This increases drilling expenses and energy usage and has also lead to an increase in arsenic poisoning.
An August, 2013 study published in the journal Science, found that as many as 20 million people in China may be affected by arsenic-contaminated groundwater. Testing for contaminated wells, however, is resource- and time-intensive given China's geographic size.
A study by Shourong Wang and Zuqiang Zhang concluded that climate change is compounding the problem. The authors found that China's average temperature rose by 1.1°C from 1908 to 2007. They expect that from 2000, the annual mean air temperature in China will rise by 1.3 to 2.1°C by 2020 and 2.3 to 3.3°C by 2050.
According to China Daily, Chen Lei, Minister of Water Resources, said, "global climate change could further exacerbate existing problems over water security, water supply and farming irrigation."
Another problem is that China's primary energy source is coal. Coal production is a water-intensive process and also has other ecological side effects, which further pollute China's water supply.
Ramifications for China
The need for an adequate supply of clean water goes beyond just a need for drinking water. Tan said, "China is a big producer of agriculture goods and food security is of paramount importance to China as is energy security."
In many rural areas, untreated human excrement is commonly applied as fertilizer. This further pollutes China's water supply and can carry diseases. Due to China's impaired water quality, many people suffer from poor hygiene and dental issues. Other health issues in China linked to poor water quality include higher cancer rates, poor immune systems, and lower fertility rates.
Another issue is that as more water infrastructure projects are built, hundreds of thousands citizens must relocate every year to accommodate the construction.
With insufficient water supplies, economic growth and innovation in China will be hindered. Via email, Fruschki stated, "many industries rely on water supply - mining, power plants, food and dairy, semiconductor production, solar panel production - and if there isn't enough water, growth has to slow down."
On the other hand, the existing situation does create economic opportunities. By 2015, China plans to invest up to $735 billion into a new, strategic industry with the goal of creating new, greener energy solutions.
A portion of this capital will be allocated to decontaminate water ways and for new water-related technologies.
Global implications
China's water shortage has global implications. As more water projects are built in China and water is diverted from the south to the north, the water supplies of nearby countries such as Vietnam, Laos, Cambodia, India, Thailand and Bangladesh will be affected.
Rivers which could be impacted include the Indus, Brahmaputra, Ganges, Mekong, Irrawaddy, Nu, and the Lancang.
The lack of water will also impact global commodity prices. Without enough water, the production of all raw materials will be materially impacted.
Also, without sufficient water, remaining Chinese farmers will have to transition to more drought-resistant crops. China's lack of water has already made the country go from a net exporter to net importer of grains because they are water-intensive crops.
As a multitude of rivers and lakes recede or evaporate every year, there is the increased risk of extinction of certain animal species, such as the Chinese alligator, as their habitats are negatively altered.
Addressing the Issue
Liping said, "to combat water scarcity, we need to have different strategies. We need to increase the value of productivity per unit or drop of water in physical water scarcity areas and increase water use efficiency in economic water scarcity areas for irrigated agriculture using new technologies."
For example, "use better seeds and have synergies between agriculture and water irrigation scheduling so water productivity can increase."
"A lot of things can be done on the technology side in order to facilitate the change or conversion from a resource consumption manner to a resource efficient manner. This requires integrating water resource and environmental management."
Fruschki agrees. "Solutions exist. Canals can be built and water redirected or stored, desalination plants can provide additional supply on the coast lines. Also, demand can be reduced by stopping wastage and leakage and quality improved by treating waste before discharging in rivers."
According to Reuters, China's current five year plan calls for $304 billion to be invested in various infrastructure projects including dams and irrigation systems.
One example is the South-North Water transfer. According to Xinhua, the official press agency of the People's Republic of China, this project is forecasted to cost $82 billion and will annually divert approximately 45 billion cubic meters of water from the south to the north.
And China continues to invest in dams such as the Three Gorges Dam, which was completed in 2012 and can produce 22.5 GW of power. Construction on the Xingjiaba and the Xiluodu dams is expected to be finished by 2015 and combined, they will produce approximately 20 GW of power.
Private sector involvement
Over the last few years, the Government and private companies have also increased their investments in desalination technologies. According to the 2013 China Greentech Report, which is produced by The China Greentech Initiative,
"From 1980-2010, the number of sewage treatment plants in China grew from 37 to 3,000; China plans to construct an additional 2,000 to 3,000 plants nationwide between 2011 and 2015 to realize urban water treatment rates of 85% and a national recycling rate of 15%."
Another solution is to move to a more market-driven water pricing structure. Via tariffs and other fees, the cost of water has increased over time, but is still relatively cheap compared to other markets. An increase in the price of water would also encourage investment from private industry, which would reduce the need for government investment.
China has already seen interest from global companies. Siemens, General Electric, Veolia, and Dow are some of the companies investing in China.
For certain provinces, the government recently introduced water quotas, which must be met by 2015. And various provinces and counties have reached agreements to trade their water rights for financial consideration to other provinces, which are short of water.
Improving efficiency
On the demand side, in the Wilson Center's China Environment Series 12 Report, researchers found that if best practices - fixing leaks, improving cleaning, reusing water and condensate, recovering heat, improving insulate - were implemented, huge gains cold be realised.
China's textile industry "can save approximately 25 percent of the water and 30 percent of the energy used in a typical cotton fabric dyeing mill in China - all with initiatives that recoup costs in less than eight months."
Tan said, "it's such a multifaceted problem. You really need to look at a number of solutions - not just one." She talked about the need for recycling rain water, desalination, dams and bio-tech (in order to improve agriculture yields). She also discussed the concept of 'trading for water' by importing water-intensive goods.
For example, in Africa and South America, China has been acquiring land and partnering with agriculture companies, which will increase its food supply while reducing its water demand domestically.
The Future
With the different backgrounds and views of the various stakeholders - agriculturalists, environmentalists, government, citizens, foreign countries - this is a complex situation without an easy solution.
But China is moving in the right direction to address this issue, says Liping: "The Chinese government already recognized the need to change the production manner to resource efficient.
"The government recognizes this is a real problem and is very important. They will allocate more water for environment and can't use too much water for economic activity. The approach is to provide a balanced plan between economic production and environmental protection."
Talking about improving the prospects of the situation, Tan said, "there's a long way to go, but I think the journey has started. If anybody will be able to do it, it will be China." But in truth, time alone will tell. (The Ecologist)