Water, water… not everywhere

While economists, strategists and pundits enjoy predicting the various “looming crises” facing China, they tend to focus on the country’s economic and social health – for instance, the dangers of slowing GDP growth, rising debt levels, an aging population, gender imbalances and widening gaps in wealth and so forth. While these are valid concerns, I am less worried about these issues because I believe the government is well-equipped to handle them with policy changes and executive orders thanks to its highly centralised one-party rule.

What I do worry about, however, is the country’s potential environmental crises, especially in water quality and supply.

China’s water resources are mostly concentrated in the south while the northern provinces suffer from a chronic water shortage. The rapid industrialisation of recent decades has not only exacerbated the shortages but also contaminated the remaining water resources through pollution.

Last month, new satellite surveys showed that groundwater storage of the North China Plain, with a population of 400-500 million, had been depleting at a rate of 6 to 8 billion tonnes a year since 2002, and that over 70,000 square kilometres of funnel-shaped depressions have been identified, the largest of their type worldwide. That sounds like a timebomb to me.

But a comforting piece of news is that the central government realised the gravity of the situation a few years ago and stepped up measures to address the environmental concerns at a more aggressive pace. Nowadays local government officials are evaluated not only on GDP growth rates but also the effectiveness of environment protection measures. And even ahead of the Environment Protection Bureau’s elevation to ministry status in March, it had been steadily upping its crackdown on pollution. In 2017 it handled 233,000 pollution cases, a 69% increase year-on-year, compared with growth rates of 42% and 33% respectively in the two years before.

A recent trip to Yunnan province in southwestern China gave me a first-hand insight into the government’s determination to protect its limited water resources. While touring Yunnan’s second largest lake Er Hai in Dali, I discovered that hundreds of guesthouses and restaurants around the lake were shut. The locals explained that it was due to a government order in March 2017 that all businesses within a certain distance of the lake should suspend operations until they passed waste and sewage disposal inspections. However, the government stopped handing out permits altogether last December, which put many of the businesses into limbo. I also learned these stronger rules came about after President Xi Jinping visited the area in 2015 and emphasised the importance of protecting Er Hai from pollutants.

I also visited Yunnan’s third largest lake Fuxian Lake in Yuxi and heard of even more draconian rules – almost all the buildings within 100 metres of the lake were to be torn down in order to protect the area from pollution. The footpath around the lake was even sealed off to prevent pedestrians from getting too close.

Fuxian is the deepest lake in the province and the third deepest in China. Aside from the Red Pagoda Cigarette Factory about 40 kilometres to the west, there is no real industry nearby and Fuxian is designated as the country’s grade one strategic water reserve because of its huge and relatively clean water reserve. “It could provide drinking water to China’s entire population for years,” I was told by a local guide, although to pipe the water across the country would require another infrastructural feat like the controversial South-North Water Transfer Project. While sympathising with the small business owners at Er Hai and Fuxian for their commercial losses, I couldn’t help thinking that such resolute decisions will be necessary to tackle the country’s broader environmental problems and to avert a water crisis in the next decade.

A native Chinese who grew up in northeastern China, Mei attended an elite university in Beijing in the late 1980s and graduate school in the US in the early 1990s. Over two decades she has worked in the US, Hong Kong and mainland China, both in the media and with two global investment banks, where she has honed her bicultural perspective. If you’d like to ask her a question, send her an email at [email protected]

© ChinTell Ltd. All rights reserved.

Sponsored by HSBC.

The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.