Money, money everywhere … but not enough to drink

Despite plans to invest up to USD850 billion over the next ten years in a bid to improve filthy water supplies, experts warn of minimal impact on the damage caused by decades of pollution during China’s rapid economic growth. Rather than more cost-effectively preventing pollution at source, money is being poured into water treatment and desalination.

The central government has earmarked 4 trillion yuan (USD650 million) for investment in rural water conservation projects between 2011 and 2020 – four times as much as was spent in the previous decade. Meanwhile, a Reuters report has revealed that at least another USD200 billion is to be spent on a variety of clean-up projects.

These investments are vital, as water security is regarded by many as being the most serious “clear and present danger” facing China, with rivers and lakes throughout the country blighted by algae blooms caused by fertilizer run-off, bubbling chemical spills and untreated sewage discharges.

Just how critical the situation is has been brought into sharp focus by recent revelations that, for years, industrial companies have been pumping hazardous waste underground at high-pressure, contaminating the ground water.

To judge by the results of water investments made during China’s last five-year plan, however, the ultimate cost of cleaning up the country’s water resources could be many times higher.

Between 2005 and 2010 China spent 700 billion yuan (USD112.41 billion) on water infrastructure but most of its scarce fresh water resources remain unfit for human consumption. According to the Ministry of Environmental Protection, 43 percent of the locations it monitored in 2011 contained water that was not even fit for human contact.

"The reason why they have achieved so little even though they have spent so much on pollution treatment is because they have followed the wrong urbanization model - China is still putting too much pressure on local resources," Zhou Lei, a fellow at Nanjing University who has studied water pollution, told Reuters.

While the government strives to prolong three decades of blistering economic growth it is also under growing pressure to address their environmental effects. Public anger over air pollution that blanketed many northern cities in January has spread to on-line appeals for Beijing to clean up water supplies as well.

One of the cardinal principles of quality assurance is that it is far more cost-effective to deal with a problem at source rather than down the line. This, however, appears to be lost on China’s leadership for the moment.

With GDP still the key metric for performance evaluation of government and party officials, increasing production remains paramount. Rather than preventing water pollution at source, which could slow down the industrial machine, the government favors the far more costly process of treatment as the solution.

"They always treat environmental degradation as an economic issue. China is even using pollution as a resource, and using the opportunity to treat environmental degradation as a way to accumulate new wealth," he said.

On top of the 10-year rural water plan, China last year vowed to spend another 250 billion yuan (USD40 billion) on water conservation, and has since allocated a further 130 billion yuan (USD20.8 billion) to treat small and medium-sized rivers over the next two years.

Local governments are also spending heavily, with Dianchi Lake in southwest China's Yunnan province being lavished with 31 billion yuan (USD2 billion) of investment in the next three years in order to produce "obvious improvements" in water quality, records show.