Water treatment is a pressing need

The following content is from the Economist Intelligence Unit, a U.K.-based information provider.

Most of China‘s urban population enjoys the benefits of running water--96% according to official statistics. But only 59% of the country as a whole has access to running water, and few anywhere have access to clean water.

Many areas still suffer droughts. Few small towns or villages treat their dirty water in any way at all and more than 90% of the rivers are polluted- -a third are unable to be used for irrigation, fishing or drinking at all. While the government claims that more than 90% of all industrial wastewater is now treated, a much smaller percentage was processed in the early and mid-1990s, resulting in serious pollution.

The health consequences are serious and long lasting. As ground- and surface-water levels subside, and industrial production increases, concentrates of pollutants in untreated drinking water have surpassed safety thresholds. Only a small percentage of surface water meets domestic standards.

The main problem is not, as some officials might claim, that China is a poor country. A 1994 World Bank research report on urban environmental management in China found that urban residents and enterprises had the financial resources--even then--to meet the full cost of wastewater treatment. But the report also found that urban utilities generally charged below cost for their services, limiting the funds available for wastewater treatment. The pricing system led to excess demand and, in turn, unsustainable pollution levels.

There have been few changes since then. Total industrial pollution and residential sewage fees collected are rising slowly. But on average, urban dwellers still pay just one-fifth the cost of water supplied to their homes and businesses. This means that industrial and residential water consumption levels continue to grow.

Annual per capita residential consumption rose from 71.3 tonnes in 1995 to 94.1 tonnes in 1999. That is equal to a per capita consumption of 217 litres a day. China discharged 16bn tonnes of wastewater in 1999, which is actually much less than in 1995, thanks to closures of many state-owned enterprises. Yet the absolute volume treated remained almost the same.

The rate at which China is using its limited water resources--per-capita, the country has one-third the global average--has led to shortages in most of the country. According to the State Environmental Protection Agency (SEPA), of China‘s approximately 650 cities, 450 suffer acute water shortages. The problem is particularly bad in the north; cities affected there include Beijing, Tianjin, Xi‘an, Taiyuan, Qingdao, Yantai and Dalian. The Yellow River first ran dry in 1972 and stopped for 226 days in 1997, according to the Worldwatch Institute.

Compounding the problems, 40-50% seepage rates in urban distribution systems prevent much of the water from aquifers and rivers getting to end- users. Leakage saps 60% of the water supplied by rural irrigation systems. As a result, Chinese industry loses Rmb230bn in productivity (more than 2% of GDP), and crops are reduced by 20-30bn kg each year.

To combat these troubles Chinese cities need to raise water charges and invest in water treatment facilities. Yet bureaucrats are reluctant to increase prices. In the past few years more than a dozen major cities have managed to win foreign loans or attract foreign investors for new water- treatment plants. But with poor returns, interest is waning while the challenge is to attract investors to smaller, rapidly industrialising cities that have fewer resources and international contacts.

SOURCE: China Hand
From EIU: © 2001 The Economist Newspaper Limited. All rights reserved.

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