“When the well is dry, we know the worth of water.” Benjamin Franklin, Poor Richards Almanac
There are recent talks about Beijing diverting seawater from nearby provinces as an immediate solution to supplying the capital city with a much needed water supply. Seawater is not the number one choice for Beijing, but a delay of the massive diversion projects has forced key decision makers to come up with a quick and feasible solution. So far, China and the rest of the world have struggled to produce an economically viable option to curb our energy and water issues. Seawater is a start but it is a temporary solution to a permanent problem.
After almost 30 years of double digit economic growth and the migration of hundreds of millions of villagers to cities, gaining access to clean water becomes a bigger issue by the day for many residents of China. If the current trend continues, China’s water supply, or lack thereof, has the ability to halt industrial and population growth in one of the worlds most expansive and dynamic economies.
The majority of China’s 270,550 sq km of water is polluted, threatened by drought or being overused. I have read some reports estimating as much as 90% of China’s water supply is polluted. This, of course, is a by product of rapid economic expansion. Today, there are few restrictions or legal enforcement preventing firms from dumping waste products in large bodies of water. This is very similar to what happened in The United States during the Industrial Revolution. Overuse primarily comes from China’s dominant agricultural sector and droughts affect 15% of the country forcing some 300 million people living in rural areas to travel great lengths for safe drinking water.
In its 11th five year plan, China dedicated 1 trillion RMB in attempts to alleviate the water crisis. Most of the money will go towards desalinization and reclamation projects. There is one ambitious plan to move water from water rich regions such as the Yangtze River to the deprived Yellow River. However, moving water around is not the final answer to the problem.
Many firms, both foreign and domestic, are positioning themselves to take full advantage of the current water crisis in China. Companies looking to take advantage of this future trend range from high tech purification services to firms that deal more in water transportation and infrastructure. In the water business, having exposure to China should allow firms to benefit from Beijing’s attempts to bring cleaner water throughout a country in great need. Gaining access to clean water becomes a bigger issue by the day for many in China.