Underground Shifts: Subsidence Review

By China Water Risk 7 November, 2013

China is over-extracting groundwater leading to subsidence, infrastructure damage & seawater intrusion

Direct & indirect losses of RMB40bn & RMB300bn due to subsidence in the North China Plain
Excessive use of groundwater by mining industry singled out; saltwater intrusion has also affected 8,000 agri wells
Groundwater usage quotas, proper pricing, monitoring & enforcement needed to mitigate subsidence risk

Over 50 cities are sinking due to groundwater over-extraction

Groundwater pollution has been a hot topic recently but what of subsidence that goes hand in hand with groundwater over-extraction? According to a China Geological Survey carried out in 1999 covering 10 years of investigation and assessment of national groundwater resources, China has more than 50 cities suffering from subsidence due to groundwater over-extraction1. The survey showed that over-exploitation already has resulted in over 100 groundwater drawdown funnels covering an area of greater than 50,000 km2. 1

Groundwater over-exploitation acknowledged as a key factor

the North China Plain … by the end of 2009, the cumulative average groundwater level fell from 10-20m. In seriously affected areas, the decline could be more than 40 metres

Back in April 2012, Vice Minister of Land and Resources, Wang Yuan admitted during the 26th session of the 11th National People’s Congress that subsidence was a problem that has to be solved.2
Wang acknowledged that in recent years, due to climate change and excessive use of water by the mining industry, over-exploitation of water resources, especially in the North China Plain has become a serious issue: by the end of 2009, the cumulative average groundwater level fell from 10 to 20 metres. In seriously affected areas, the decline could be more than 40 meters.

 … only mild subsidence in China before 1975 of about 10mms  … After 1990 … the pace quickened quite dramatically and some of the deepest regional subsidence had reached two metres

Ma Zhen, Tianjin Centre, China Geological Survey

Speaking at the Beijing Forum in early November, Ma Zhen of the Tianjin Centre, China Geological Survey, said that groundwater levels depleting by as much as 70 meters led to subsidence. He attributed subsidence in the region around the Northern Bohai Sea to over-exploitation of groundwater amid rapid economic development. He pointed to the fact that there was only mild subsidence in China before 1975 of about 10mms but with the country’s economic opening, the pace of subsidence picked up significantly and by even 1983 a regional cone, or funnel, had started to form accompanied by increasing land subsidence. After 1990, he said, the pace quickened quite dramatically and some of the deepest regional subsidence had reached two metres. Ma said that there were clear linkages between the location of wells and areas of greatest subsidence.

Related economic losses can be substantial

Subsidence can be the start of a chain reaction of impacts. Subsidence can lead to civil infrastructure damage, burst water, gas and electricity supply pipelines buried under cities, traffic interruption due to train derailment and other accidents. Ma said that subsidence was a significant risk for China’s high speed rail network and monitoring teams are working to detect signs of changes in land and issue warnings. Subsidence has also been linked to poor agricultural harvests and desertification brought about by sea water encroachment (more on this below).

…direct and indirect economic losses caused by subsidence in the North China Plain alone amounted to over RMB40 billion and nearly RMB300 billion respectively

The 2012 National Environmental Report by Ministry of Environment Protection states that China experienced 347 land collapses, 55 ground fissures and 22 land subsidence incidents in the year of 2012. According to the China Geological Survey Bureau, direct and indirect economic losses caused by subsidence in the North China Plain alone amounted to over RMB40 billion and nearly RMB300 billion respectively3.
See Sinking Cities: Cracks in the Groundfor infrastructure related costs of subsidence.

Subsidence & sea-level rise

Subsidence is often linked to saltwater intrusion. A lowered water table brought about by groundwater over-extraction and subsidence can cause saltwater to migrate inland and upward, resulting in saltwater contamination of freshwater supplies. Shandong, Liaoning & Hebei suffer the most serious sea water encroachment. Around the Bohai Sea, saltwater intrusion has grown the fastest. In 2003, an area of almost 2,500 km2 was affected by saltwater intrusion compared to 20km2 in the late 1980’s; a increase of 62km2 per annum.

…around Laizhou Bay, saltwater intrusion has already affected 8,000 agricultural wells

In the coastal areas around Laizhou Bay, saltwater intrusion has already affected 8,000 agricultural wells reducing the capacity to irrigate, giving rise to a loss of more than 600,000 mu of arable land and the production of more than 300 million kilos of food. Moreover, the drinking water of over 400,000 people was affected4.

“it is urgent that China does a better job of regulating and conserving groundwater resource”

As a result of depleted water resources available to people in the Bohai region, Ma said, there needed to be more attention paid by local governments to recycling of water, the direct use and treatment of seawater and in general better management of water resources.
In general, he said, it is urgent that China does a better job of regulating and conserving groundwater resource.

Solving subsidence: can China reduce groundwater reliance?

…over 400 out of the 655 cities in China reliant on groundwater

The common sense solution to avoid subsidence is to slow down groundwater extraction. But with over 400 out of the 655 cities in China reliant on groundwater as their primary drinking water resource, is this possible? Especially in North China where over 65% of municipal water, 50% of industrial water and 33% of agricultural water comes from groundwater resources?
Many expect the South-to-North Water Diversion Project to help provide relief to groundwater use. One researcher from Chinese Academy of Sciences, who didn’t want to be named, said the price of water derived from the South-to-north Diversion Project will be significantly higher than the local served tap water due to the add-on long transportation fee and treatment fee required to improve the water quality that is contaminated along the way. With a cost differential, companies would obviously prefer to tap local sources, unless of course the government raises tariffs in affected areas.

Solutions are a long way off: monitoring & inter-province coordination needed

As aquifers know no boundaries, subsidence is a trans-border issue

As aquifers know no boundaries, subsidence is a trans-border issue. Different economic goals of various provinces therefore add complexity to regional remediation of subsidence. Close cooperation between provinces is key. Shanghai, Jiangsu and Zhejiang have already started dialogue and co-action since 1999 making them the front runners.
In March 2012, the Ministry of Land and Resources and Ministry of Water released the 12th Five-Year Plan for Subsidence Prevention and Control. The plan highlighted cross provincial coordination and set ambitious subsidence slow-down targets for key areas:

  • Beijing and Tianjin must ensure that the annual speed of subsidence falls below 25mm by 2015 and 15mm by 2020;
  • Hebei and Shandong must ensure that the annual speed of subsidence falls below 30mm by 2015 and 20mm by 2020;
  • Yangtze River Delta, Shanghai below 7mm by 2015; and
  • Zhejiang and Jiangsu below 15mm by 2015 and 10mm by 2020.

Shanghai … has to control the total volume of annual groundwater extraction to be no more than 20 million m3 by 2015 whilst ensuring an annual recharge of 23-25 million m3.

The plan also drew “red lines” (quotas) for groundwater extraction for certain regions.
For example, Shanghai, one of the 50 cities affected by subsidence, has to control the total volume of annual groundwater extraction to be no more than 20 million m3 by the end of the 2015 whilst ensuring an annual recharge of 23 to 25 million m3.
Meanwhile groundwater resources are priced at a premium of 4x to surface water for the top two coal-mining provinces of Inner Mongolia and Shanxi (more on water tariffs here).

officials admitted that it is too complicated to define the exact amount of money required

Whilst this all sounds like a good start, it is worth noting that there is no detailed financing schedule in the plan as officials admitted that it is too complicated to define the exact amount of money required. Perhaps once again, Beijing appears to lead with its city level Groundwater Protection and Pollution Prevention/Control Action Plan released on 12 September 2013. (More on this plan here and more on other water plans by Beijing here).

Regardless, [subsidence risk] translates to an increase in costs to business operations – either in a rise in water tariffs or mitigation measures against subsidence

Even more encouraging is the release of the first draft of the Geological Environment Monitoring and Management Measures for public consultation on 9 October 2013.
Nevertheless, it remains to be seen how committed the government is to mitigating subsidence risk. Regardless, this translates to an increase in costs to business operations – either in a rise in water tariffs or mitigation measures against subsidence.


1. http://www.mlr.gov.cn/xwdt/jrxw/201012/t20101229_808643.htm
2. http://www.mlr.gov.cn/xwdt/mtsy/people/201204/t20120426_1090963.htm
3. http://www.mlr.gov.cn/tdzt/zdxc/dqr/43earthday/zygq/201204/t20120420_1086610.htm
4. http://www.igsnrr.ac.cn/xwzx/kydt/200504/t20050425_1813793.html

Further Reading

  • Sinking Cities: Cracks in the Ground – With 50 cities in China at risk of subsidence, Xinying Tok discusses the link with groundwater over-extraction and falling water tables and how if this continues, could pose a major financial and physical risk to real estate
  • Irrigation: Big Gains in Small Farms – With 95% of farms in China are less than two hectares compared to 86% in India, Syngenta’s Dr Sandhikar discusses why the training of the smallholder to adopt water efficient tech in small farms is key. Panipipes, drip irrigation with Plastic Mulch can help reduce groundwater usage and falling groundwater tables
  • Groundwater Crackdown – Hope Springs – The economy slows down but the Chinese government speeds up groundwater crackdown with increased transparency, blacklists at both central and provincial levels
  • Water for Coal: Thirsty Miners? With up to 83% of China’s coal reserves in water stressed & scarce regions, the recent CLSA report asks if there is enough water to grow coal production. If not, what are our options? Debra Tan expands
  • Water Fees & Quotas: Set for Economic Growth – Debra Tan reviews the new joint standard on water pricing and new provincial quotas on water use, water efficiency and water quality released in January 2013
  • North China Plain Groundwater: >70% Unfit for Human Touch– 26 February 2013 – A new Ministry of Land and Resources survey shows that the North China Plain suffers from severe groundwater pollution with over 70% of overall groundwater quality classified as Grade IV+, in other words, unfit for human

China Water Risk
Author: China Water Risk
We believe regardless of whether we care for the environment that water risks affect us all – as investors, businesses and individuals. Water risks are fundamental to future decision making and growth patterns in global economies. Water scarcity has emerged as a critical sustainability issue for China's economy and since water powers the economy, we aim to highlight these risks inherent in each sector. In addition, we write about current trends in the global water industry, analyze changes occurring both regionally and globally, as well as providing explanations on the new technologies that are revolutionizing this industry.
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