"China's water problems require greater success than they've been able to have so far, particularly in reducing waste," he said.

He pointed out that the government can do projects like the "South-North Water Diversion," but in the long run, the most cost-effective way to get more water is to waste less of it.

"That requires lots of unglamorous and small scale actions," he said. "But those are very hard to implement because they have to be done at the grass roots."

He stated that at the moment, local leaders are much more heavily evaluated on growth statistics than environmental variables. He suggested that such issues should be addressed with higher priority.

Another issue he pointed out is energy. While China has gone in a very short time to be one of the world leaders in the investment of green technologies, it is also the biggest source of carbon generating country in the world. He stated that there are no ready-made remedies that China can import and implement to fix the problems. The solutions have to be internally generated, both technologically and sociologically.

Addressing the issue of urbanization, Pomeranz said that he expected China to reach about 65 percent urban around 2030 and then urbanization would level off. That means adding about 240 to 250 million people in the cities.

"That's adding almost the total population of the United States," he said. "It's a staggering project and is very costly."

He commented that a significant achievement in China is that with such large-scale migration of people to the cities, there are no urban slums like one would find in Cairo or Manila where electricity and sanitation are cut off.

"That's most impressive," he said.

But he pointed out one issue that needs to be addressed is the care of the aging population. Because of the family planning programs, the aging population in the cities require new structures and services, which will compel more young people migrate to urban areas, leaving a gap for the care of elderly in the countryside.

"These problems have to be addressed by some kind of system in strengthening the social safety net, which is mentioned in Wen Jiabao' s speech," he said. "There are a lot remain to be done, and a lot has to be figured out on the fly."

Turning to the issue of dealing with corruption, Pomeranz emphasized the importance of addressing it from different levels. He observed that the petition system to the central government has been clogged and proved inadequate. China can learn relevant lessons from the outside world, he said.

"I don't think there is a society that doesn't have corruption," he said. But a more independent judiciary, a stronger legal system, and a less supervised press can be "reasonably effective at limiting corruption," he said.

Pomeranz said he is very optimistic about China's future.

"I think in the institutional sense, despite the problems, it's for things to continue, not to be perfect, but to get better."