The Thirsty Dragon: Implications of China’s Water Shortages

Three Gorges Dam in China

Sitting in a rainy Shanghai recently, with the rivers and canals as usual awash with water, it is hard to believe that China actually ranks alongside Saudi Arabia and Morocco in the world water poverty index.  Although China has 20% of the world’s population, it possesses only 7% of its water resources; with water availability per capita being just one-quarter of the world’s average – and falling.

Two-thirds of China’s cities suffer from water shortages, 100 being classified as having “serious” shortages.  Faced with such a resource challenge, China is adopting various measures to avoid either a potential environmental catastrophe, or a water shortage sufficiently severe to stall its economic growth, with all the social and political implications that would bring.

Firstly, the government has invested large amounts of money in improving existing infrastructure, such as recycling of waste water through better sewage treatment facilities and improved recycling by large industrial consumers of water.  Meanwhile farmers are being encouraged to use water more efficiently, and many local governments are increasing the price of water for their residential and industrial consumers.

Coal Mining is the Thirstiest Industry

However, the biggest industrial user of China’s freshwater is the coal industry, which consumes around a fifth of all China’s water—equivalent to the annual consumption of Germany, Italy and Canada combined. To help reduce reliance on the thirsty coal-mining industry there has been a strong push toward renewable energy, with large wind farms springing up around China and a number of large-scale hydropower projects, of which the largest (in the world) is the Three Gorges project on the Yangtze River (pictured above).

In addition, a post-Fukushima construction pause notwithstanding, nuclear power is destined to make a significant contribution to China’s energy needs.  Despite this, coal still fuels a massive 70% of this vast country’s energy needs.  And even as China strives to improve energy efficiency and diversify its energy sources it will still need to increase coal production by another 30% within a decade, which alone will require additional water approaching the equivalent of the UK’s entire consumption.

South-North Water Diversion Project

Another part of the solution lies in the observation that whilst we Shanghai dwellers sometimes feel that we have more water than we need, less than 20% of China’s water is found in the arid north, which contains China’s capital, over 40% of its population, 60% of its agricultural land – and most of its coal.

The idea therefore, first mooted by Chairman Mao in the 1950s, is to move 44 billion m3 of water a year (roughly Germany’s consumption) from south China to the North.  The total cost of this South-North Water Diversion Project, which has now started, is estimated at more than US $60 billion.  The project faces huge engineering and political challenges  as the water resources of a number of South-East Asian countries could be affected.

Keeping the Growth Engine Going

China, having taken on the mantel of manufacturer to the world, has raised its economic profile and the living standards of its people to levels that were undreamed of 30 years ago.  In the process, it has also made the huge investment needed to make such massive engineering projects possible.  However, the environmental toll that this economic development has taken on the country is becoming ever harder to ignore.

To maintain its remarkable growth rate at a level that will satisfy the aspirations of its people and the needs of spluttering western economies, the country will not only have to continue investing huge amounts of human and political capital, but also bring all of its considerable planning capabilities and technological ingenuity to bear.

This is where opportunities will arise also for western companies and governments to make their contribution, working together with their Chinese counterparts to bring the best solutions and services to address the numerous issues involved.  Whatever the outcome, the impact will be felt – for better or worse – not just in the parched north China plain, but around the world.

About Tim Mathieson

Tim, Chief Operating Officer of Willis China, is a graduate in Chinese studies with more than 30 years’ experienc…
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2 Responses to The Thirsty Dragon: Implications of China’s Water Shortages

  1. john lirosi says:

    Hello Tim

    I found your article on the water shortage in China as very interesting and informative. In Australia various states have had water restrictions for a number of years given the lack of good rains however, nothing to the same degree as currently taking place in China.

    • Tim Mathieson says:

      John – I agree that both countries face similar issues of having people living in locations that are not in all respects friendly to human habitation. China’s issue is that there are so many people here and the speed of development is so rapid that they will need to use all their ingenuity to overcome the environmental problems. However, it would seem that China could learn from Australia given that both countries have water shortages and also a large mining sector, which presumably in Australia has had to learn how to minimise its wastage of water. With China’s investment in the mining sector in Australia, I expect that that knowledge transfer is already starting to take place.

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