Sinking Cities: Cracks in the Ground

By Xinying Tok 7 November, 2013

Xinying Tok discusses China's sinking cities due to groundwater over-extraction & falling water tables

In 2012, a large crack appeared in the middle of the tarmac at the foot of the Shanghai Tower Project. A cause of concern, certainly, but it definitely should not have been unexpected. Measuring 632m high, the Shanghai Tower will rise above the 492m World Financial Center right next to it. During the World Financial Center’s construction in 2002, incidentally, its neighbor suffered a 6.3cm decline in its foundation.

“Shanghai has sunk 2.6m since 1921 & according to the Shanghai Geological Research Institute, excessive groundwater extraction contributes to 70% of Shanghai’s surface subsidence”

The sinking of the city of Shanghai is not news. Shanghai has sunk 2.6m since 1921 and according to the Shanghai Geological Research Institute, excessive groundwater extraction contributes to 70 per cent of Shanghai’s surface subsidence, with the remaining 30 per cent created by the physical weight of skyscrapers.

Neither is Shanghai the only city that is sinking. China’s official agencies note that 50 cities are at risk of subsidence due to over extraction of groundwater. Areas that are of concern are the North China Plain and the Yangtze River Delta. The UNEP identified regions in the North China Plain aquifer that have suffered significant groundwater depletions since 1960.

Sinking cities can result in damaged buildings, buckled highways, disrupted water supply and drainage as well as increased risk of flooding. Occurrence of sinkholes is also a symptom of land subsidence. Just in the past year, Shenzhen has experienced nine incidents of subsidence causing sinkholes in its city area. In 2012, official reports show similar incidents in Beijing, Changsha and Harbin.

The sinkholes have captured the public’s attention. Fingers have been pointed towards over construction, bad construction, broken underground sewage and water pipes. Some reports question if the sinkholes are linked to groundwater depletion.

In the United States, it is estimated that 80% of land subsidence is consequence of groundwater extraction.  Rapidly growing metropolises of Asia like Bangkok and Bandung have also identified groundwater extraction to be the major factor for their rapidly sinking cities.

Areas in Bangkok and Bandung are sinking at 0.1 m and 0.24 m per year respectively¹. Studies have shown that Beijing have, for decades, been extracting more groundwater than can be replenished. Now, 6 billion m³ of groundwater that have been extracted may never be replenished².

Rapid urbanisation of these cities exacerbates the groundwater depletion. Increased extraction from growing industries and a growing urban population are drivers in the increase in water use. The urban population in China has increased roughly 3x between 1980 and 2005 and urban water use has increased >4.5x in the same time period³. In particular, for cities in the North China Plain aquifer system, groundwater extraction is the key source for municipalities to meet water needs. Tianjin municipality and Beijing municipality use groundwater for one-third and two-thirds of its municipal needs respectively^3,4. Urban groundcover that is largely concrete also reduces groundwater recharge rates. With increased levels of use and reduced levels of recharge, groundwater depletion occurs which can result in land subsidence.

“To date, it is estimated that Shanghai has suffered damages of up to US$35.1 billion from subsidence related disasters”

The instability of the land can be a long lasting real estate risk to all new and existing buildings in the city. For example, over the last 20 years, areas in Florida near Tampa have had more than 400 sinkholes occurrences⁵. Insurance claims submitted in Florida between 2006 and 2010 totaled US$1.4 billion, with about 17 claims daily.

In the 1950s – 1960s, land subsidence caused Osaka’s dykes to be unable to protect the city from flooding. The city spent US$2.5 billion (2000 level prices) over 15 years to reconstruct dykes⁶. To date, it is estimated that Shanghai has suffered damages of up to US$35.1 billion from subsidence related disasters.

With continued extraction of groundwater in the major cities in China, what can help real estate buyers and owners keep an eye out to protect their property value and manage the risks accordingly?  First, increased insurance coverage and understanding real estate insurance coverage would be a good start. According to the World Bank, as of 2008, only 5% of the property in China is being insured⁷. And from past experiences of earthquake damage claims, majority of the affected parties had no idea their normal asset protection plan did not necessarily cover earthquake damage.