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China’s Game-Changing Water Policies

by Elizabeth C. Economy
January 30, 2012

A farmer digs a trench to allow water to irrigate his field planted with winter wheat crop near the village of Lidong, located around 217 miles south of Beijing. A farmer digs a trench to allow water to irrigate his field planted with winter wheat crop near the village of Lidong, located around 217 miles south of Beijing. (David Gary / Courtesy of Reuters)


Water is an issue that preoccupies Chinese officials throughout the country, but nowhere perhaps as much as in Beijing. The already water-scarce capital has been suffering a continuous and precipitous decline in water availability over the past decades, as both population size and income levels have grown dramatically. Caixin magazine has a terrific new piece that details not only the current crisis but also the historical challenges Beijing has faced. The piece also explores what the capital should be doing but isn’t. Experts, for example, have been pushing pricing reform, water conservation, and recycling. Some of this is being done, but not enough. Instead, Beijing’s plans center on desalination, exploiting karst resources, and the South-North Water Diversion, each of which, as the article discusses, brings with it additional economic and potentially serious environmental costs.

Lest the Caixin article leave you too pessimistic, you can check out the testimony from my panel on China’s water issues from last week’s Economic and Security Review Commission hearing on “China’s Global Quest for Resources and Implications for the United States” down in D.C. Both of my co-panelists, Grace Mang and Jennifer Turner, raised a couple of potentially game-changing initiatives by the Chinese that could transform the way they do business related to water resources. Ms. Mang and Dr. Turner focused on the nexus of energy and water, and their take on the situation was decidedly upbeat.

Ms. Mang, who is the China program director at International Rivers Network, highlighted Sinohydro’s efforts to develop a strategy for environmental corporate social responsibility (CSR). Since Sinohydro, according to its own estimates, commands a 50 percent share of dam-building globally, what the company does in terms of CSR matters a lot. According to Ms. Mang, Sinohydro just passed an environmental policy that will make it the world’s leader in environmental CSR in the hydropower industry. She suggests that it would be “prudent for traditional dam builders and funders to take notice and try to meet China’s challenge to do better.” While I think it is probably a bit early to be calling on the international community to match Chinese standards, I agree that the aspirations of Sinohydro are inspirational and should be tracked carefully.

Dr. Turner, who heads the Woodrow Wilson Center’s China Environment Forum, focused on the development of shale gas as an alternative to water-demanding coal. Of course utilizing shale gas presents its own environmental challenges—it is water-intensive up-front and water pollution can be a serious problem. Nonetheless, given the choice between adding more coal to China’s energy mix and pushing forward with shale gas, Dr. Turner is probably right that, if managed properly, the latter is a very attractive option both for water and climate change concerns.

For my own part, I’m not quite as confident as Ms. Mang or Dr. Turner about China’s capacity to change the way that it does business—and my own testimony on China’s management of its shared trans-boundary water resources reflects my ambivalence. The seeds of change are everywhere, but whether they can take root and blossom in an often very harsh and arid policy environment will depend on careful tending over time.

Post a Comment 4 Comments

  • Posted by bob n walker

    dear s/m

    where can I get a written copy of….
    ………’ Caixin magazine has a terrific new piece ‘
    thank-you,I love your stuff……..bob

    Dear Bob,
    The link to the Caixin piece is provided within the post. I am afraid that I don’t know where you can get a hard copy.
    Liz Economy

  • Posted by Chris Holly

    Is there an English translation of the Caixin article?

    Unfortunately, an English translation does not yet seem to be available. It is possible that one will be published on Caixin’s English language website: at a later date.
    –Liz Economy

    EE pt 2:
    Actually Caixin has an English version of the article called “Water Diversion Blues” in their January 9, 2012 edition, on page 62.
    –Liz Economy

  • Posted by Collective Responsibility


    Nice piece, and one that I am not sure many understand well enough inside or outside of China.

    Pricing is a huge piece of this, as is China’s use of water for energy, but beyond the degraded quality levels and regular contamination paint a very bleak picture for China’s ability to sustain the current trajectory for its economy… and its people


  • Posted by George Chakko

    Thanks for Elizabeth’s welcome pointer to China’s water problem.

    In retrospect, the water problem, its demand and scarcity, is not confined to Beijing and China alone. With exception to few dozen countries, it is now a global problem. Water is the new Gold, a diminishing entity in quality, esp. for developing countries. China’s neighbour India is suffering equally, due to pollution and wrong water management and investment lack. One would shudder at what the run for water would be, once world population reaches 9.2 billion in 3 decades from now.

    The U.N. of late has focussed on this issue and brought out interesting studies that are of great relevance. Even though in the industrial cold West, Central & Eastern Europe, water availability is not a problem, the water quality, esp. in urban areas close to heavy industries, has become a serious issue, if not a veritable challenge. In industrial Germany the drink water quality in the so-called “Ruhrgebiet” (the heavy industrial belt covering cities like, Cologne, Düsseldorf, Duisburg, Essen), the tap water quality is bad, almost undrinkable, unlike in the more agricultural outer Bavarian state.

    The banks of River Danube house a string of Central and E. European countries that now got together to the act of establishing a control organ in Vienna – the Donau Water Management Organisation – that regularly meets to discuss problems of maintaining Danube water as clean as possible (The backgrounder event was a dangerous poison leakage into the river from a gold producing factory in Romania, that fortunately stopped short of killing humans, but many tonnes of fish).

    We shouldn’t wonder, if we all live that long, that the situation could turn so bad that good water becomes costlier than black gold by 2050. Who was that writer or poet who wrote in the last mid-century during his ocean trip – “Water, water, everywhere, not a drop to drink”? Hope times are not bequeathed to our posterity to sing that again!

    George Chakko (UN correspondent in Vienna on health leave)

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