The bestiary beloved of China commentators and economists needs an addition to its black swans, grey rhinos, white elephants and the ‘tigers and flies’ targeted in the corruption war. Welcome to the Camel Economy, one that must adjust very rapidly to water scarcity. A crisis looms, with potentially far more serious economic, social and political consequences than demographics, debt and deleveraging.
So why is water scarcity not a central feature of studies of China’s economic outlook? Why is it not recognised as a constraint on economic growth and thereby China’s power? After all, in 2005 the Minister of Water Resources declared a need ‘”o fight for every drop of water or die, that is the challenge facing China”, while former premier Wen Jiabao said that water shortages threatened “the very survival of the Chinese nation”.
Is it really that bad? Unfortunately, it is. Accepted definitions of water stress, scarcity and acute scarcity are resources of 1,700 cubic meters, 1,000 cubic meters and 500 cubic meters per person per year, covering everything from nuclear power stations to teeth cleaning. China’s overall resources are roughly 2,000 cubic meters, but 80 per cent of water resources are in the south. In the north, eight provinces suffer from acute water scarcity, a further four from scarcity. They account for 38 per cent of China’ agriculture, 50 per cent of its power generation, 46 per cent of its industry and 41 per cent of its population.