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

50 cities in China are at risk of subsidence; In Shanghai 70% of subsidence is due to groundwater over-extraction
Sinking cities means infrastructure & real estate risk; Subsidence cost Shanghai ~US$35bn to date
Since rapid urbanisation exacerbates groundwater depletion, better long term real estate planning is key

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.

North China Aquifer System

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 respectively3,4. 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.

As China’s real estate growth continue to boom in cities like Shanghai, Beijing, Shenzhen, Guangzhou where land subsidence risk has become more and more evident, it is time for a better information infrastructure to provide much needed data for better decision making. A comprehensive database on sinkhole occurences, damage costs, overlaid on ground geology information can form the basis of better risk assessment and long term real estate planning.

1. Institute for Global Environmental Strategies. (2010). “Sustainable Groundwater Management in Asia”. Hayama, Japan: IGES.
  2. Probe International Beijing Group. (June 2008). “Beijing’s Water Crisis: 1949 — 2008 Olympics”. Canada: Probe International.
 3. Shahid Yusuf, Tony Saich (eds.). (2008). China Urbanizes: Consequences, Strategies, and Policies. Washington, DC: World Bank Publications.
  4. Institute for Global Environmental Strategies. (2010). “Sustainable Groundwater Management in Asia”. Hayama, Japan: IGES.
5.  Scheidt, J., Lerche, I., and Paleologos, E. (September 2005). Environmental and economic risks from sinkholes in west-central Florida. Environmental Geosciences, v. 12, no. 3, pp. 207–217.
6. Institute for Global Environmental Strategies. (2010). “Sustainable Groundwater Management in Asia”. Hayama, Japan: IGES.
7. World Bank. (July 2008). World Bank Good Practice Notes: Catastrophe Insurance Policy for China.


Further Reading:

  • Underground Shifts: Subsidence Review – Subsidence goes hand in hand with groundwater over-extraction. With over 400 out of the 655 cities in China reliant on groundwater, can China mitigate subsidence risk? We explore related costs such as infrastructure damage, saltwater intrusion & increased desertification
  • More Power to Enforcement – Environmental protection was a central theme of the recent Beijing Forum, here Debra Tan discusses how this along with recent policy developments seem to signal that China’s environmental protection legislation has grown some teeth and that she is firmly on the path to more enforcement
  • 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.
  • New Guard: New Hope for Pollution? – March ushers in the official all change of the old guard. Will the new guard bring new hope for pollution control? China Water Risk takes a closer look at the events leading up to this week’s National People’s Congress meetings.
  • For Beijing’s Groundwater Protection Plan click here.
  • Need a 101 on groundwater depletion in China? Check out our infographic here
Xinying Tok
Author: Xinying Tok
Xinying Tok is a dual degree Master student at Duke’s Fuqua School of Business and Nicholas School of Environment. She is believes in building sustainable livelihoods through engaging both the philanthropic and business communities specifically in food, waste, water and transport infrastructure. Prior to business school she was a banking professional in Southeast Asia with experience in project management, structured finance and equity research. Since then, she has worked briefly with NRDC in Beijing looking at green buildings and community composting, and conducted business research on projects evaluating the carbon saving potential of waste management technologies and assessing the market for water infrastructure repair in Hyderabad . As a Fellow for RSF Social Finance and Investor Circle in the United States, she has conducted due diligence on several social enterprises in the energy and environment sector. She hopes to one day be in the position to grow and scale similar social enterprises in Southeast Asia.
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