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Addressing Water Scarcity in China

Chinese Version- 中文

 China Water Scarcity Files

 China Water Scarcity Files China Water Scarcity Files China Water Scarcity Files

China Water Scarcity Files Objective of the AAA

 Program Design

 Major Thematic Studies

 Major Expected Outputs

 Links to Further Information 


For years, water shortage, water pollution and flooding have constrained growth and affected public health and welfare in many parts of China, where per capita availability of natural fresh water is only a quarter of the world average. Northern China is already a water scarce region, and China  as a whole will soon join the group of water stressed countries. The scarce water resources are poorly managed predominantly through inefficient and unsustainable practices.   Ineffective water policies and weak institutional capacity and implementation are the leading causes.


China ’s leadership is well aware of the worsening water shortage and is determined to transform China into a water-saving society through policy and institutional reforms. The Government of China requested the World Bank’s assistance in the area.  To assist in this effort, the Bank launched an analytical and advisory assistance (AAA) programin 2005 to address China ’s water scarcity.



Objective of the AAA


The overarching objective of the AAA is to assist the Government to develop, adopt, and implement an integrated set of policy and institutional reforms needed to more effectively address China’s water scarcity and build a water scarcity-saving society.  Specifically, the AAA will:


  • improve the understanding of key water-related policy and institutional issues and recommend specific policy and institutional reforms to address them;
  • engage concerned parties, including Government policy-making entities and other stakeholders, to raise awareness  and establish consensus on integrated water resource management; and
  • create an enabling environment for the recommended actions by reducing cross-sectoral and inter-jurisdictional differences and enhancing cooperation on the ground.

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Program design


Building on the large number of existing and ongoing studies in China and international experiences in integrated water resources management, the AAA concentrates on helping the responsible agencies design and implement the policy and institutional reforms needed to improve the management of water resources, taking both quantity and quality issues into account. Analytical studies will focus on a few key areas where incremental work is needed to fill gaps in our understanding of the issues and actions needed to address them. Advisory activities will focus on creating ownership and consensus around priority actions, and assist in their implementation.


The AAA is carried out in three phases

  • diagnostic evaluation and identification of key issues;
  • thematic studies focusing on key areas needed for policy reforms and piloting; and
  • synthesis of recommendations and action plan.


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Major Thematic Studies


Water Pricing, Willingness-to-pay and Affordability: The task will analyze affordability issues at the household level, a major concern and constraint to water tariff reform.   A survey in Chongqing will assess the willingness-to-pay for water. The income impact of the water tariff at the household level will be analyzed in Beijing  and a few small and medium-sized cities. The work is expected to produce specific recommendations and good practice on how affordability issues of the poor can be taken into account when designing water tariff reforms.


Water Pollution Emergency Prevention and Responses: Examining the lessons learnt from the Songhua River Toxic Chemical Spill and international experiences in the area of environmental emergency and chemical management, the study will develop policy and institutional recommendations for improving preparedness and handling of water pollution emergency incidences.


Water Rights and Compensations for Ecological and Environmental Services in River Basins:  This task addresses water rights allocation in general and inter-governmental transfers/compensations for ecological and environmental services in a river basin in particular. Current practice with relevant compensation mechanisms and government transfers will be examined with case studies, and recommendations for payments for ecological and environmental services and institutional setup will be provided. 


Strategic Direction for China Urban Water Sector.   The study focuses primarily on urban water and wastewater utilities, and how to improve their financial and operational performance. It will provide recommendations for strategic direction of the sector in China .


Economic Valuation and Policy Analysis -Hai River Basin Case Study:

There is a gap between a high level framework of policy and institutional reforms and specific actions on the ground. This study is designed to bridge this gap for the case of the Hai Basin . The task will cover the economic valuation of water uses and address water pricing, water rights and permits administration, water pollution institutions, and rational allocation of water resources by type of use.


Policy Framework for Water Resources Management in Chongqing : This activity, part of the Chongqing Small Cities Infrastructure Project, undertakes the location-specific diagnostic assessments and adaptation of the recommended policy and institutional actions expected to emerge from the thematic and synthetic studies to the needs and situation of Chongqing Municipality .  It also includes the consultations, awareness raising and training needed to assist the local authorities to adopt and implement them. 


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Major Expected Outputs

  • Diagnostic report on water issues in China, policy barriers, covering government priorities and plans, performance indicators and evaluation, and implementation barriers. 
  • Background papers on international experiences in integrated water resource management in Europe, the United States, Israel, Japan and Singapore
  • Case study report and policy note on water pollution emergency prevention and response in China as well as a set of 4 background papers on international experience.
  • Urban water sector strategic direction study report.
  • Study report and policy note on water pricing, willingness-to-pay, and social affordability.
  • Study report and policy note on water rights.
  • Study report and policy note on ecological compensation mechanism.
  • Study report on environmental cost modeling and valuation of environmental health risks study and water pollution valuation methodology.
  • Case study report on the economic valuation and policy analysis study in the Hai Basin .
  • Case study report on water resources management in Chongqing.

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More information


To download major reports from the study and to find out about additional World Bank involvement in the water sector, please click here.


For further inquries on the program, please contact:

Jian XIE, Ph.D

East Asia and Pacific Region

The World Bank

1818 H Street, N W ,. Washington D.C, 20433, USA.

Fax: 202-522-1666



To receive news and reports on the program, send your contact information to Nina Queen at


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