PRC Water: Waste A Lot, Have Not: The Problem Is Policy Not Technology

A Report From Embassy Beijing November 1997

Summary: Chinese water resources scientists told Embassy Environment, Science and Technology section officers on October 29 that very low water prices perversely encourage waste even in water-short areas. Rural poverty make it difficult to end water subsidies in the countryside, but gradually rising prices in urban areas will encourage conservation. Although a plan to move water from water-rich Hubei province to northern China first proposed in the 1950s is favored by the Ministry of Water Resources, gains from water conservation savings may make it possible to scale back this expensive project. Waste water recycling is low because treated water is more expensive than subsidized fresh water. One Chinese scientist believes that climate warming will reduce rainfall in the Beijing region and thus make more efficient irrigation and industrial waste water recycling even more important.

Many Chinese Cities Are Chronically Short Of Water

Four hundred of China’s 600 hundred cities are short of water and 108 have a serious water shortage, said minister of water resources Niu Maosheng in an interview for the September 1997 Central Party School book “Chinese Economy Moves Into The Twenty-First Century Conversations With Ministers And Governors”. Niu said that Beijing, Tianjin, Xi’an, Taiyuan, Datong, Qingdao, Yintai, Dalian are among major cities which have a chronic water shortage. Water shortages are a major constraint on the Chinese economy: each year water shortages affect 230 billion renminbi of industrial production and reduce crop production by 20 - 30 billion kilograms. Niu said that excessive extraction of ground water often results in subsidence and falling water tables. The drying out of some sections of the yellow river increased from 70 days in 1992, to 122 days in 1995 to 133 days in 1996 when a 579 kilometer-long stretch of the river dried out. Inefficient and antiquated irrigation systems fail almost as fast as new areas are opened to irrigation. Although new irrigated land increases by about 1 million hectares each year, the net increase is just 400,000 hectares as much irrigated land goes out of production as old irrigation systems fail and more land is taken up by construction.

A Dry Year In Beijing: Reservoirs, Water Table Drops

Beijing 1996 rainfall as of mid october at 348 mm was just half normal and still below the record low of 377 mm set in 1965. Beijing’s water stored in reservoirs has decreased and the water table has been dropping. Two chinese scientists, one of them an expert on beijing water resources, on November 3 told the Environment, Science and Technology section that water supplies in the reservoirs should be looked at over the long term. The water resources scientist said that beijing during 1978 - 1986 were relatively low rainfall years, 1988 - 1996 were relatively high rainfall years and 1997 is a low rainfall year. The two scientists agreed that the answer to beijing’s water problem is to make water a commodity so that market incentives will drive water conservation.

The 1200 Km-Long South-To-North Water Transfer Project

Chinese Academy Of Sciences Institute Of Geography Department Of Hydrology water resources researchers professors Liu Changming and Ren Hongzun on October 28 discussed chinese government plans to build a south-to-north water transfer project [in Chinese, the nanshui beidiao, literally: move the southern water northwards] that will bring water from water-rich Hubei province to water-short northern China. The watercourse could bring 15 billion cubic meters of water northwards each year. The water course would run from the Danjiangkou Reservoir in hubei province 1200 kilometers north to Beijing. The central government would pay 60 percent and local government 40 percent of the construction cost a quite different arrangement from the Three Gorges project which is completely financed by the chinese central government. Two hundred and twenty thousand people will need to be resettled to make way for this project. Liu said that hubei province farmers will be compensated for the losses that exporting water northwards will cause them.

More [Expensive] Water For Beijing Municipality

According to a recent article Liu provided to EST Counselor, the south-to-north water transfer project, once planned for completion before the year 2000, was postponed to the first decade of the twenty-first century. Eight hundred million cubic meters of earth will be moved in order to construct the waterway. The south-to-north water transfer project will be the longest and largest water transfer project ever built anywhere. It will supply water to Beijing, Tianjin and 35 cities in Hubei, Henan, And Hebei provinces. Xie Jinhua of the ministry of water resources nanshui beidiao office writes in an early 1997 article “getting ready for the south-to-north water transfer project” that Beijing city water prices are now far below the actual cost of water. Xie writes if water prices do not rise, supplying Beijing with 1.2 billion cubic meters of water per year will cost, if construction cost, maintenance and interest are considered, about 1.8 billion renminbi [USD 225 million] per year. Water cost will be 5 RMB per cubic meter for the 15 year loan term, and 2.5 RMB per cubic meter thereafter. Maintaining the current low subsidized beijing city water price [note: average chinese urban water price is 1 RMB (USD 0.12) per cubic meter end note] will be much too great a burden for the Beijing Municipal government.

Climate Change And The South-To-North Water Transfer Project: Beijing, Northern End Will Need Even More Water

Chinese water resources scientist Shen Dajun, in his June 1996 doctoral thesis “Synchronism-Asynchronism Analysis Of Regional Waters And Climate Warming Influence On The Middle Route Of The South-To-North Water Transfer Project” writes that the steady rise of carbon dioxide levels in the atmosphere will shift Chinese rainfall patterns and so the distribution of China’s water resources. Shen, a former doctoral student of Liu Changming, is now a post-doctoral researcher in the water resources institute of the China Academy Of Hydrology And Hydroelectric Power [zhongguo shuili shuidian kexueyuan] under the ministry of water resources. Shen used 1951 - 1992 maximum and minimum rainfall data from 12 weather stations along the middle route of the south-to-north water transfer project.

Shen analyzed how often high and low rainfall years coincided along the route and then, using a climate change model, calculated how these figures would change assuming a doubling of atmospheric carbon dioxide levels by 2050. Shen, at the close of his doctoral thesis concludes that climate warming will reduce rainfall at the northern, water-consuming part of the middle water transfer route (rainfall change estimate at different points varies in the range -60 mm to +45 mm or between -65 percent and +35 percent). Evaporation will increase slightly. Climate change will not significantly affect the amount of water available at the southern, water supplying end. Therefore, Shen writes, water conservation including more efficient irrigation and water reuse by industry will become even more important.

North China Warming Benefit? Shen Expects Less Rain

Shen sees climate warming decreasing the water available in the beijing area. His conclusions differ from those of several scientists writing in studies on chinese climate change and its effects” (June 1997) who see climate warming benefiting northern China by increasing rainfall there.

What Goes In Must Go Out: The Water Treatment Problem

Xie Jinrong of the Ministry Of Water Resources writes that Beijing Municipality produces 1 billion cubic meters of waste water annually. Although the recently completed gaobai water treatment plant has a processing capacity of 500,000 cubic meters per day, the amount of water that the plant actually processes is far less. Even less is recycled. As a result not only is a very large amount of unprocessed water dumped into Beijing’s environment but the water is not recycled: a big waste. Xie remarks that encouraging Beijing companies to use reprocessed water for industrial processes is a tough sell: reprocessed water at 1.8 RMB [usd $0.20 per cubic meter is much more expensive than clean (subsidized) water. Once the additional water supply from the south-to-north water transfer project reaches Beijing, 80 percent of that water will become waste water. This will create serious environmental problem unless recycling is sharply increased, writes Xie.

Water Pricing Policy: The Weak Heart Of The Dragon

EST Counselor pointed out that many experts see water shortages and unequal distribution of existing resources as one of China’s most serious environmental and economic challenges in the near future. Liu Changming agreed that China’s water problems are potentially very serious, however, Liu emphasized, that better water pricing policy could drastically improve the situation. China consumes about 550 billion cubic meters of water each year. Ren Hongxin said that water conservation could save China 100 - 200 billion cubic meters of water per year and so cut China’s current water consumption about one quarter. Before the responsibility contract system started 16 years ago, said Ren, water in north China was free to farmers. Now farmers pay for water but they pay for water according to how much land they will irrigate and not according to the volume of water they use. Ren said that experience in northern China has shown that changing from charging by land area to charging by water volume used cuts water use by 20 percent even though water prices are kept very low. Ren said a typical water price in north China today is 0.031 renminbi [approximately four-tenths of one U.S. penny] per cubic meter. Ren said that this low price is about one-tenth of the actual cost of supplying the water to the farmer.

Rural Poverty Makes Raising Prices Difficult...

Ren said that farmers prefer their traditional irrigation methods. They don’t want to save water if conservation is more expensive than wasting water. Saving water is not a matter of technology, said ren, but a complex mix of social, economic, and institutional problems. Raising water prices would encourage the farmers to save water, but the farmers are poor and can’t afford to pay higher water prices.

But Urban Water Prices Are Rising With Incomes

Liu Changming told EST Counselor that rising urban incomes have made it possible to gradually increase water prices, although urban water prices are still subsidized. Not surprisingly, said Liu, Qingdao in Shandong Province which at 1.6 Renminbi (USD 0.20) per cubic meter has the most expensive water in China also used water more efficiently than anywhere else in China. Liu compared the low chinese prices with water prices in the U.S. and germany which are eight to twelve times higher than the price of water in Qingdao. The re-use of water by industry in beijing and several other very large cities is increasing, but the water re-use level of China (around 30 percent) is much less than that of the developed countries (around 70 percent).

ESTCOUNS: U.S. Wants Broader Dialogue On Water

EST Counselor mentioned the interest of the White House in establishing a broad-based dialogue on water resources issues. As an adjunct to the Science And Technology Joint Commission Meeting on November 18, there will be a discussion on how to enhance U.S. - Chinese cooperation in this area. Liu Changming expressed interest in having a representative of their institute participate in the meeting and will contact the Chinese host, the State Science And Technology Commission (SSTC), to find out details.

Bibliographic Notes

The interview with Minister Of Water Resources appears in China’s Economy Moves Into The Twenty-First Century Interviews With Ministerial And Provincial Leaders [zhongguo ershiyi shiji jingji zouxiang] which was published by the Central Party School in September 1997.

Synchronism-Asynchronism Analysis Of Regional Waters And Climate Warming Influence On The Middle Route Of The South-To-North Water Transfer Project [nanshui beidiao zhongxian diqu shuiliang fengku zaoyu fenxi ji qihou bianhuan de xiangying] June 1996 PhD thesis of Shen Dajun completed under the supervision of Professor Liu Changming, Department Of Hydrology, Institute Of Geography, Chinese Academy Of Sciences.