Jul 13, 2007

China Water Markets Invest US$87 Billion Focus on Water, Drinking Water

Statistics show China is among the world’s 13 thirstiest countries. Water in China poses a triple threat: supply is scarce in the populous north, flooding endangers lives and land in the south, and growing municipal and industrial pollution jeopardises regions throughout the country. China has about the same water supply as Canada, but 100 times more people.

China´s extraordinary economic growth, industrialization, urbanization, coupled with inadequate investment in basic water supply and treatment infrastructure, have resulted in widespread water pollution. Today approximately 700 million people in China (over half of the population) consume drinking water contaminated with animal and human excreta that exceed maximum permissible levels by as much as 86% in rural areas and 28% in urban areas.

To prevent more future problems and to reduce the severity of China’s water problems, the Government is taking reasonable measures, one of them is to invest US$87 billion in environmental protection programs, focusing on water, drinking water and air pollution control. Beijing for example, host for the upcoming 2008 Olympics will experience major improvements in the next few years leading to the Olympics. By 2008, Beijing would have an improved drinking water quality and 50% of the wastewater would be reused. Beijing is determined to ease its water shortage and make the water cleaner with increasing investment.

According to a new study by Helmut Kaiser Consultancy, the average amount of water available per capita in China is only one fourth of the worldwide average. Given the continuous and rapid development of the economy over the past 20 years, and the steep surge in water usage, water shortages and pollution have become problems that are hindering the development of Chinese economy and society.

The Chinese government has become increasingly concerned about industrial wastewater, its treatment and potential re-use. National policy has moved towards a closer study of pollution and water. A recently added amendment to China's Water Pollution Law states that all cities with populations over 250,000 must build water-treatment plants.

China's size, its rapid urbanization and the lack of wastewater treatment (over 77% of effluent is currently untreated) make it essential to develop the market, even though it will not be easy. The government is now committed to reform in regulation, tariffs and (eventually) the legal structures required. The private sector will not be allowed to invest in network systems, however. Massive investments (over $200bn) over the next ten years, in both water supplies and wastewater treatment are required. Wastewater treatment for the 'Three Lakes and Rivers' scheme alone in the current five-year plan totals $150bn.