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Improving China’s Yellow River: Why Business and Government Need to Work Together

This piece was co-authored by Lijin Zhong, Senior Associate from the WRI China office

The Yellow River has played a critical role in the growth and prosperity of Chinese civilization for thousands of years. But today, the Yellow and the people who depend on it face severe challenges. Stress of limited water resources, pollution, and flooding pose significant risks to communities and businesses that rely on the river. As these stresses grow, China’s water managers and users face the daunting challenge of implementing policies that balance economy, ecology, and community. At the Yellow River Commission’s annual Forum in September, water experts from government, research institutes, the private sector, and NGOs gathered to discuss problems facing the Yellow and potential solutions for better water management. One sentiment that came through loud and clear is that the only way to improve the Yellow is for government and business to collaborate—not clash.

The Role of Government: Set a Clear Agenda

At the Forum, it was clear that the relationship between Chinese companies and government is evolving when it comes to water issues. The government is dealing with the complex and pressing challenge of water resource management by setting ambitious goals, adopting a set of “three red lines” in its 2011 No.1 Policy document for achieving water security. These red lines include:

  1. Controlling overuse of water resources development and utilization– annual total volume of water use in China will be limited to 700 billion cubic meters by 2030.

  2. Improving the efficiency of water use– new standards will guarantee that the most economic and agricultural value possible is obtained from water use.

  3. Controlling pollutants discharged into water function zones– new regulations will limit the total volume of major pollutants discharged into rivers and lakes.

Significant changes will need to take place with the support and enforcement of the Chinese government in order to meet these three red lines. A strengthened legal system, improved water use monitoring, and more abundant data are all critical to meeting the country’s water security goals.

The Role of Business: Thrive through Innovation

This year’s Yellow River Forum also saw unprecedented participation by companies, for which water risk and water resource management is undoubtedly emerging as a critical concern. During the Forum, several case studies highlighted ways that companies have successfully improved their water management and the benefits they have seen as a result. Examples of innovative water management include:

  1. The Integrated Chishui River Basin Management: The Chishui River—the primary water source for Chinese beverage companies including Moutai, Langjiu, and others—runs 500 kilometers along the border of Guizhou and Sichuan provinces, covering an area of 20,000 square kilometers. In 2004, Guizhou Environmental Protection Bureau, partnering with the World Wildlife Fund, launched an Integrated Chishui River Basin Management effort. The initiative successfully engaged relevant stakeholders from government and the private sector to participate in protecting the Chishui River. For example, the Moutai Group set up a “Green Fund,”investing several billion RMB to build wastewater treatment systems to mitigate pollution within the Chishui River basin.

  2. Pollutant Reduction Opportunities Analysis Tool: The Yellow and other rivers in China suffer from severe water pollution. In fact, only about 60 percent of the country’s rivers meet China’s minimum water quality requirements. WRI, alongside partners including Tsinghua University and the ADM Capital Foundation, has developed an analytical tool called the Pollutant Reduction Opportunities Analysis (PROA) in order to help achieve strict water pollutant discharge targets. PROA is a designed to help Chinese decision-makers select the most cost-efficient options for reducing ammonia, nitrogen, and other discharges into their waterways.

Their Common Need: Better Information

The Chinese government and businesses have taken encouraging steps towards improving the Yellow River, but there’s still more work to do. Governments, companies, and communities in the Yellow River basin and other threatened basins around the world have a common need for more and better data. China’s government needs data on where water is being used, how it’s being used, and what condition it’s in in order to meet its three water security red lines. To justify investments in smarter water management strategies, businesses need more robust information about how water risks can impact their bottom lines and the benefits of intervention.

Addressing this tremendous appetite for better water data is the core objective of WRI’s Aqueduct project on measuring and mapping water risk. In January of 2013, Aqueduct will release a new version of its water risk mapping tool, which will bring together the best available data on water risk from around the world. By providing better and more accessible data on how water risk varies around the world, Aqueduct will empower governments and companies alike to make better informed water management decisions in the Yellow River and beyond.


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