2017 State Of Ecology & Environment Report Review

By China Water Risk 14 June, 2018

We review mixed trends for China's water in 2017

Prioritising rivers pays off as main river basins' overall quality improved; but 5 Northern rivers below 70% target
Overall groundwater quality continues to worsen despite 2016 blip; Key Lakes & Reservoirs also deteriorate
Maybe like the revision of over-inflated GDP figures this year, we are now seeing the “real” state of environment

On 31 May, 2018, the new Ministry of Ecology and Environment (MEE) released the 2017 State of Ecology and Environment Report (SOEE), formerly the “State of Environment Report” (SOE).

National Surface Water Quality 2015-17

The report cites 2017 as “a crucial year for China in implementing the 13FYP for Ecological & Environmental Protection”, reporting that “good quality’ surface water has continuously improved nationally”.

Indeed, it shows Grade I-III national surface water rising to 67.9% and Grade V+ dropping to 8.3%. As seen from the right chart, it is a marked improvement from 2015 when China first started disclosing it.

This is a clearly a positive trend. Surface water improvement is also reflected in an improvement in the overall surface water quality of China’s rivers as well as the overall quality of the river basins’ shallow groundwater as can be seen from the charts below:

Overall Surface Water and Shallow Groundwater Quality

However, it’s not all positive.  A closer look shows that the overall quality of Key Lakes & Reservoirs as well as groundwater has deteriorated. The key results from the 2017 report are as follows:

  • Main Rivers – overall surface quality of China main river basins meeting Grade I-III rises slightly to 71.8%, meeting the Water Ten target of 70%, but 5 Northern rivers still fail to meet the target;
  • Key Lakes & Reservoirs – deteriorates across all categories since 2015, almost giving up previous gains;
  • Groundwater – unlike improvement in shallow groundwater, overall groundwater quality continues to deteriorate despite improvement in 2016; and
  • Monitoring coverage – this has generally increased over the last 5 years but groundwater monitoring stations dropped 17% in the last year to 5,100. Note that such fluctuations in stations over the years mean that historic data is not exactly comparable and should be taken as indicative trends. This also applies to other water bodies.

Prioritising rivers appears to have paid off

It is not surprising that rivers are doing better; they have been the government’s focus in recent years. In 2016, China more than doubled the river surface monitoring stations to 1,617 and in 2017 plus river chiefs were introduced as part of the war on pollutionClearer divisions of responsibility and better coordination among the river chiefs, as well as increased public monitoring appear to be working.

Enforcement has also stepped up. According to the report, the number of environmental violations has increased in the past year:

  • A total of RMB11.6bn in environmental violation fines were handed out; according to the MEE, this was a 265% increase over 2014 before the revised Environmental Protection Law was in effect;
  • Total administrative penalties against violations have risen by almost 180% since 2014, from 83,195 to 233,000; and
  • Environmental complain hotline “12369” received a total of 618,856 public complaints, with almost all of them handled (99.9%)

Although this was not mentioned the 2017 SOEE report, it is worth noting that the total cases of seizures, administrative detention, criminal charges, production halts and daily fines also increased 74% from 22,730 in 2016 to 39,600 in 2017.

A more realistic view of groundwater and Key Lakes & Reservoirs?

Although the report provides no explanation of the recent deterioration in groundwater or Key Lakes & Reservoirs, we did say in “5 Trends for the Year of the Dog” that “as watchdogs become more powerful, environmental disclosure will be on the rise and become increasingly accurate.” Perhaps similar to the revision of fake and over-inflated GDP figures across various cities, counties and provinces earlier this year, the latest MEE numbers may well reflect the “real” state of environment.

Similar to the revision of fake & over-inflated GDP figures across various regions…


… the latest MEE numbers may well reflect the “real” state of environment

Nevertheless, looking forward, we expect to see not only improvement in surface water quality, but other water bodies too (albeit slower for groundwater as this is harder to tackle). This is because the Water Ten Law is now effective as of 1 January 2018. Moreover, more than 900,000 river chiefs are appointed as of December 2017; this is more than quadruple the 200,000 as of August 2017. There is also a new environmental tax law and water resource tax expansion – read more on these here.

We can also expect the newly established MEE to show “more teeth” and take on more responsibility in implementing holistic action to protect the environment. That said, we clearly have far to go on all fronts. Below are detailed accounts of the 2017 SOEE report …

Key Lakes & Reservoirs – water quality deteriorating across all categories …

Water quality of China’s Key Lakes & Reservoirs improved considerably between 2011-2015, but then declined. The share of Key Lakes & Reservoirs with Grade I-III declined from 66% in 2016 to 62.5% in 2017. Moreover, the proportion of water bodies that are “unfit for human contact” (Grade IV-V+) worsened from 34% to 37.4%.

Water Qaulity of Key Lakes & Reservoirs 2011-17

Overall groundwater quality – continues to deteriorate, 2016 is just a blip …

China’s groundwater quality has been gradually deteriorating since 2012. Despite some improvement in 2016, the groundwater quality has worsened again this year. The proportion of groundwater stations with “good” and “excellent” quality fell from 35.5% to 31.9%, which is even lower than the level in 2015; while the proportion of groundwater stations with “bad” and “very bad” quality rose from 60.1% to 66.6%.

The Water Ten Plan’s target limit of 15% by 2020 is still met

Despite this, the proportion of “very bad” quality groundwater of 14.8% still meets the Water Ten Plan’s target limit of 15% by 2020. As mentioned previously, perhaps these numbers now likely reflect the ‘true state’ of groundwater problems.

Overall Groundwater Quality Deterioration 2011-17

Shallow groundwater of China’s river basins – overall quality continues to improve, but mixed performances in individual river basins…

Meanwhile, on a more positive note, the overall shallow groundwater quality of China’s main river basins has shown continuous improvement as discussed previously. However, individually, they indicate mixed performance. The charts below show the breakdown of the differences in water quality across the main river basins disclosed in the SOE/SOEE report between 2016 and 2017.

Shallow Groundwater Quality of China‘s River Basins 2016-17

As per charts above, 4 river basins show a decline in “good or excellent” shallow groundwater quality from previous years: Yangtze (-5,7%), Liao (-1.8%), Songhua (-1.7%), and Huai (-0.7%). On the other hand, Inland Rivers shows a material improvement in the proportion of “good or excellent” quality by 13%, which topped other river basins at 39.1%. Following this, Yellow and Hai show a +1.3% and +0.3 improvement in the same category respectively.

All main river basins have improved in the “very bad” category

Despite the mixed performance in “good or excellent” category across the main river basins, all of them have improved in the “very bad” category. Liao shows the highest improvement in the proportion of “very bad” quality by 18.6%, followed by Inland Rivers (12.4%), Yangtze (8.6%), Songhua (7.7%), Yellow (3%), Huai (1.3%) and Hai (1.2%).

Overall river quality – improving but 5 Northern rivers continue to struggle to meet Water Ten target…

As discussed previously, the overall quality of China’s main river basins has gradually improved from 2015 to 2017. General improvements can be identified between 2016 and 2017 across all categories except for Grade IV-V: Grade I-III water improved from 71.2% to 71.8; Grade IV-V deteriorated from 19.7% to 19.8%; and Grade V+ improved from 9.1% to 8.4%.

5 Northern rivers continue to struggle in reaching the Water Ten target of 70%

However, similar to shallow groundwater, there are also mixed performances in individual water quality of China’s 7 major river basins. While Southern rivers (Yangtze and Pearl) are doing relatively well, Northern rivers continue to struggle in reaching the Water Ten target of 70% surface water meeting Grade III or better by 2020. Note that Songhua has nearly reached the Water Ten target. Can it be the first Northern river to meet the Water Ten target?

Water Quality of China's 7 Major River Basins 2017

Breakdown of 7 major river basins – overall surface quality improved slightly but Yellow, Pearl & Huai River deteriorated…

Yangtze continues to improve; Songhua bounces back

  • Yangtze River – Grade I-III water quality improved from 82.3% in 2016 to 84.5% in 2017. Grade V+ water quality also improved from 3.5% to 2.2%.
  • Songhua River – Since the decline in 2016, Songhua has improved markedly across all categories this year. Grade I-III water quality materially improved from 60% to 69%. Grade V+ water quality also improved from 6.5% to 5.6%.

Yangtze & Songhua Rivers

Yellow, Pearl & Huai worsen

  • Yellow River – Grade I-III water quality deteriorated from 59.1% to 57.7%. Grade V+ water quality also worsened from 13.9% to 16.1%.
  • Pearl River – Grade I-III water quality deteriorated from 89.6% to 87.3%. Grade V+ water quality also slightly worsened from 3.6% to 4.2%.
  • Huai River – Grade I-III water quality deteriorated from 53.3% to 46.1%. Grade V+ water quality also slightly worsened from 7.2% to 8.3%.

Yellow, Pearl & Huai Rivers

Hai & Liao perform “so-so”

  • Hai River – Although being the river with the most Grade V+ water, its proportion of Grade V+ water markedly improved from 41% to 32.9%. Grade I-III water also improved from 37.3% to 41.7%. It is its first time to reverse the trend of “more good water; but also more really bad water” since 2012.
  • Liao River – Unlike Hai River, Grade I-III water in Liao River improved from 45.3% to 49% but Grade V+ water deteriorated from 15.1% to 18.9%.

Although being the river with the most Grade V+ water…


…it is the first time Hai river reversed the trend of “more good water; but also more really bad water” since 2012

Hai & Liao Rivers

Further Reading

  • New Tech & Policy For Climate Resilience: 3 Takeaways – Experts say new tech needs policy support at an interdisciplinary forum for climate resilient urban water systems, hosted by the Centre for Water Technology & Policy of the University of Hong Kong. Check out three key takeaways from China Water Risk’s Chien Tat Low and Woody Chan
  • Managing China’s Water Stress Drop By Drop – What are the trends in managing China’s water stress? WRI’s Dr Jiao Wang finds that while there is good and bad news, the Three Red Line regulations and local policies seem to have overall positive impacts
  • Reactive Dye Revolution – Innovative tech is popping up as Huntsman’s Holger Schlaefke expands on how their new reactive dye saves costs and water plus cut carbon emissions without additional CAPEX
  • How Green Is Your Beer? – From Tsingtao to Carl sberg, just how green is your favourite beer? Hear from IPE’s Na Wang on findings from their recent environmental impact analysis on China’s beer supply chain
  • Introducing The Better Buying Index – Suppliers can now rank buyers’ purchasing practices with the unique Better Buying Purchasing Practices Index. Explore the index and its first benchmark report with their co-founder Dr Marsha Dickson


  • Ministry Reform: 9 Dragons To 2 – What does China’s long-awaited ministry re-shuffle mean – who manages what and how? China Water Risk’s Woody Chan and Yuanchao Xu review the roles and impacts of the new Ministry of Ecological Environment & Ministry of Natural Resources
  • Key Water Policies 2017 – 2018 – Missed out on key water and water-related policies in China this past year? Catch up with China Water Risk Woody Chan’s review, including the latest on the new Water Ten Law and environmental tax law
  • China’s Water Resource Tax Expansion – China’s water resource tax pilot has expanded to 9 provinces including key ones like Beijing & Tianjin. China Water Risk’s Yuanchao Xu explores the successes of the initial Hebei pilot and why the additional provinces may benefit
  • 5 Laws To Watch Out For In 2018 – From environmental taxes to compensation mechanisms to nuclear safety, China is continuing its regulatory push in the new year. China Water Risk’s Yuanchao Xu reviews 5 key laws to watch out for in 2018
  • 5 Trends For 2018: The Year Of The Dog – We could be heading for dog days this year and China is getting ready with economic planning that considers water and climate. Check out our 5 trends and stay ahead of the pack
  • China’s River Chiefs: Who Are They? – River chiefs were first implemented in 2007 following a pollution incident. Now, by 2018 all of China’s rivers/lakes will have river chiefs. How will this work & what do they do? China Water Risk’s Yuanchao Xu expands

River Basins

  • Yangtze Flows: Pollution & Heavy Metals – Areas along the Yangtze River dominate Chinese production but at what cost? With Grade V water in its tributaries, rapid growth in upstream wastewater plus concerns over a disproportionately large share of the nation’s heavy metals discharge, can the Yangtze River Economic Belt still flourish? CWR’s Hu takes a closer look
  • Water-nomics: Trade-offs Along The Yangtze – With significant economic, water use and pollution disparities along the Yangtze River, China Water Risk & the Foreign Economic Cooperation Office of the Ministry of Environmental Protection, publish a joint brief to explore strategies to find the right development mix. Check out some of the key findings in this review
  • Pearl River Delta: 5 Water Must-Knows – China’s Pearl River Delta generates 9% of GDP but water challenges lurk behind the dazzling economic success. Don’t know what these are? China Water Risk’s Feng Hu shares 5 water must-knows for the region
  • Why Should PRD Business Lead In Water Stewardship? – With the Pearl River Delta set to lead China’s economic growth, China Water Risk’s Feng Hu & the Alliance for Water St

Past State Of Environment Reviews

  • 2016 State of Environment Report Review – The signs are positive for China’s environment in 2016. Groundwater quality improved after 5 years of decline though there is mixed news for rivers & lakes. Is the tide turning in China’s ‘war on pollution’?
  • 2015 State of Environment Report Review – China says overall environment quality has worsened in 2015 with groundwater deteriorating for the fifth year straight. It’s mixed news for rivers but lakes & reservoirs see marked improvement. Get the latest pollution status updates from the newly released 2015 State Of Environment Report
  • 2014 State of Environment Report Review – China’s overall environmental quality in 2014 was “average”, but with polluters tampering with monitoring, can we even believe this data? We take a closer look at the mixed news
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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