With combined pressures from rising water demand and limited supplies, combined with severe water pollution, China is faced with mounting challenges for supplying safe, clean water to its 1.3 billion residents, as well as maintaining sustainable development.

China outlined its water resources development strategies in its 11th-five year plan (2006-2010), but the continuing economic growth trends and population increase, as well as growing industrialization and urbanization, are likely to worsen China's water shortage.

In its report "Addressing China's Water Scarcity", which was released at the end of last month, the World Bank urged China to reform and strengthen its water resource management framework.

The report said current policy failures in China's water management include, an underdeveloped system of water rights administration, weakness in water demand control, lack of market-based instruments and insufficient financing for pollution control.

The report suggested China should further reform its water pricing mechanism in order to promote efficiency.

"In order to provide appropriate incentives for adopting water saving technologies and behaviors, water prices need to be raised to reflect its full scarcity value," the report said.

In China's major cities, water for residential use is priced between 1 and 3 yuan per cu m, compared with between $0.65 and $ 0.80 in Brazil, and between $2.2 and $ 2.7 cu s in England and Wales.

The World Bank said the social impact of water price increases, especially those affecting the poor, would need to be addressed by establishing social protection measures.

"It is essential to make sure that low-income group will receive the basic water supply service when the water price is adjusted," Xie Jian, a senior environmental specialist from World Bank said.

The report recommended an Increasing Block Tariffs (IBT) structure to eliminate possible impacts for the low-income group.

IBT refers to a two-part tariff system in which people pay higher bills when they consume over a government quota.

The structure can be used to reflect the true cost of water for consumers who use large volumes of water, while ensuring the poor are able to obtain sufficient water for basic demand.

The report also proposed that China should try market-oriented mechanisms for ecological compensation, for instance, the payments for ecological services will help to protect the upstream ecosystems, which are essential for the long-term supply of good quality water sources.

China's water scarcity

China's water resources are scarce and unevenly distributed. China's renewable water resources amount to about 2,841 cu km per year, the sixth largest in the world.

However, its per capita availability in 2007 is only 2,156 cu m per year, only one fourth of the world's average. And about 400 of China's 667 cities are reportedly short of water.

The uneven distribution of the water resources, both spatially and temporarily, has made the problems more severe.

In northern part of China, the water availability per capita is only 757 cu m per year, one-eleventh of the world average, and is well below the threshold level of "water scarcity", which is 1000 cu m per year.

The scarcity is most severe in the Hai River basin, which sits in Beijing and neighboring Tianjin, where the 120 million inhabitants have only 300 cu m per year for each person.

The precipitation pattern further intensifies the uneven distribution of water resources. With a strong monsoonal climate, China is subject to highly variable rainfalls that contribute to frequent droughts and floods, which also happen simultaneously in different regions.

The poor water productivity in the country, which is $ 3.6 per cu m, is lower than the average of $ 4.8 per cu m in middle-income countries, and $ 35.8 per cu m in high-income countries.

Water use in agricultural sector accounts for 65 percent of the country's total. But only 45 percent are actually consumed on crops, due to extensive waste in irrigation systems.

The industrial sector takes up 24 percent of the total water consumption in the country. The recycling rate is only 40 percent, compared to 75-85 percent in developed countries. China's water scarcity is also aggravated by extensive pollution.

Over the past three decades, despite efforts to control it, water pollution has increased spreading from the coast to inland areas, and from the surface water to underground water resources.

It was not until 2007 that the rising trend of water pollution began to show a sign of reversal, as total emissions of chemical oxygen demand (COD) dropped 3.14 percent over the 2006 level.

"Rural water pollution has become increasingly serious in the recent years, because its non-point pollution source is more difficult to manage than industrial pollution," said Wang Manchuan, from China National School of Administration.

"The country is still looking for effective measures to curb the water pollution in rural areas," Wang said.

Every year, there about 25 cu km of water is unfit for consumption as a result of pollution. To make up for the water shortage, as much as 24 cu km of water are drawn from underground aquifers that are not being replenished, creating a vicious circle.

(China Daily 02/09/2009 page4)