Written by Yong Jiang.

With rapid socio-economic development, China is facing unprecedented challenges for managing its water resources. China’s annual water resources endowment is low on the per capital basis, which is about one third of the world average.

The limited amount of water is unevenly distributed across space, with local water availability in some catchments (e.g., the Hai River basin in North China) even below the threshold level of 500 m3 per capita per year commonly considered signalling absolute water scarcity. To make it even worse, the annually available water is subject to climate and weather patterns spreading also unevenly across months while varying year by year, leading to both water shortages and floods, particularly in urban areas or basin downstream. In contrast to scarce water resources, unsustainable use prevails, as characterized by extensive irrigation with low use efficiency in the dry north, high exploitation rate with stressed local water systems, low water reuse and recycle, and limited wastewater treatment. The unsustainable water use combined with limited socio-ecological resilience threatens China water security.

With continuous population growth, rapid urbanization coupled with changing life style, and climate change, the insecure water situation becomes increasingly severe, limiting China’s sustainable development.

In recent years, the Chinese government has taken many initiatives to improve water management, including institutional reform, most stringent water regulation, and sponge city development. Yet, water scarcity and insecurity remain an issue with little improvement, and even have worsened in some areas. Effectively managing water, particularly addressing rising water scarcity and insecurity, to support sustainable development, represents a daunting task to China that, in its current governance setting, is subject to at least three challenges.

Scientific understanding of water resources in local context

Effective water management starts with scientific understanding of water in local context. Is water fully understood not only hydrologically but also socio-economically in China’s management realm? As a critical input to socio-economic development, water is a resource with unique features requiring sufficient consideration in its management. For example, water is bulky and heavy while being spatially located and temporally distributed. Transporting and shifting water to balance supply in its natural cycle with socio-economic demand both temporally and spatially thus is inevitable but costly, which should be factored in across development and spatial planning and policy decision-making.

Water also is a multifaceted good, with its economic nature varying under changing conditions dictating locally adaptive water management. Water resources in the dry north of China, for instance, exhibit the characteristics of common-pool resources and, thus, is subject to the tragedy of the common, justifying government intervention to regulate development and water use. Water demand or use of users is a function of internal and external factors reflecting behaviour and management responses under given conditions including regulation rather than a fixed quantity, and thus should be the foundation of policy design and effective water management. All these examples illustrate the importance of clear understanding of the socio-economic nature beyond hydrology and management implications of water in local biophysical, socio-economic context, a prerequisite for effective water management that is currently missing in China’s water management practice.

Management integration with fragmented governance structure

Integrated management concepts such as integrated water resource management (IWRM) or integrated urban water management (IUWM) have been identified as an effective approach to managing water. Such concepts, however, is at odds with China’s administrative system, water institution in particular, that leaves much space in local implementation of national policies and that is characterized by shared administration among government agencies both horizontally and vertically.

Multiple ministries at the national level have long been involved in water management in the past, overseeing different aspects with no appropriate coordination in place. Vertically, the counterparts of these ministries at the lower administrative levels, while technically guided by their corresponding ministries in principle, are accountable to and led by their local governments that may pursue their own interests not necessarily in line with the water interest of the national government. In addition, integrated management over water requires explicit consideration of water implications and impact of development decision-making that has not been institutionalized through mechanisms similar to environmental impact assessment (EIA).

The lack of such institution for integrated management partially explains China’s rising vulnerability to water scarcity and cases of development policies or activities inconsistent with and even worsening local water conditions.

Management skills and analytical capacity in policy with limited data

Effective water management requires skills and analytical capacity in policy and social science based on reliable data. Yet, China’s water management historically has been dominated by structure-based thinking and technology-oriented remedies. Whenever and wherever water issues arise, water managers are inclined to structural or technical solutions, a phenomenon attributable to China’s technocratic legacy and culture and to the lack of skills, capacity and/or appreciation in the “soft” management method, such as water demand management, integrated management and governance, and market-based approaches, within China’s water administrative system.

Take the market-based approaches for water management as an example. Current application of the approach treats and uses economic instruments as if they are a command-and-control tool, with poor understanding of underlying economics and conditions while overlooking appropriate policy design based on economic theory. The water pricing practice, for instance, is largely arbitrary, set artificially low and oversimplified, and, where in need of increase, being undertaken as a simple matter of raising the price in an ad hoc way rather than appropriate design in relation to full cost accounting and economic efficiency. For China’s water management setting, the bottom line should be that the price of water should provide the “right” signal of its (marginal) supply cost including opportunity cost and external cost rather than an artificially lowered price subsidized by the government indirectly and effectively encouraging overuse or efficient water allocation as revealed by virtual water flows.

The lack of data, particularly publically available, detailed water use data, exacerbates the problem, limiting not only effective water management but also participation of the scientific community and other stakeholders in informing and supporting water-related decision-making.

Yong Jiang is water and environmental economist at IHE Delft Institute for Water Education in the Netherlands. Email: y.jiang@un-ihe.org Image credit: CC by Andrew Hart/Flickr.