2021 State of Ecology & Environment Report Review

By China Water Risk 20 June, 2022

The 2021 State of Ecology & Environment Report is the first under China's 14FYP. What's different? Is water doing better or worse? Find out in our review

No. of surface water monitoring stations has doubled from 13FYP to 14FYP following ministry reform so, results not directly comparable to previous years
National surface water quality improved & 5/7 major rivers meeting both Water Ten targets but key lakes & reservoirs saw slight decrease in quality
Groundwater still far from the Water Ten target & changes in monitoring seen but with no reasons given; 42% rise in violation fines draws optimism for future direction

The 2021 State of Ecology and Environment Report (SOEE) is the first SOEE of China’s 14th Five-Year Plan (14FYP) published by the Ministry of Ecology and Environment (MEE).

Following the ministry reform to better protect the environment in 2018, the MEE has further standardised the environmental quality monitoring and assessments in 2021, by merging various overlapping responsibilities and monitoring efforts from the Ministry of Water Resources (MWR) including the preparation of water function zoning, management of sewage outfalls, and responsibility for water environment protection in the basins.

No. of surface water monitoring stations doubled from 13FYP to 14FYP…

As a result, the total monitoring stations of surface water by the MEE have nearly doubled from 1,940 in the 13FYP to 3,646 in the 14FYP. According to the past SOEE reports, the number of monitoring stations in China’s Main River Basins has also soared from 1,614 to 3,117, as shown in the chart below.

Due to the drastic increase of monitoring stations in 2021, the figures in the SOEE 2021 report are not directly comparable to previous SOEE reports even though they might reflect a truer state of China’s surface water quality. In the previous editions of our SOEE review articles, we compared historical figures from the past SOEE reports.

…thus, 2021 SOEE not directly comparable to previous reports

So do note that the comparisons made in this article are directly obtained from the 2021 SOEE report as opposed to previous editions of our SOEE review articles which compared the trends using historical figures from past SOEE reports. If you would like to refer to previous trends, please click the images below.

Key highlights of the 2021 SOEE Report

  • Groundwater still has a long way to go: Grade V category is still far away from the Water Ten target of less than 15%. Shallow groundwater measurement was not provided in this report.
  • National surface water quality improved: Grade I-III national surface water quality reached 84.8%, a slight improvement of 1.5% compared to 2020 according to the 2021 SOEE Report
    • Yangtze River: The inspection of sewage discharge into the Yangtze River has been completed, and the traceability completion rate is over 80%; 7,000+ sewage discharge outlets were registered for better monitoring.
    • Yellow River action: 4,434 sewage discharge outlets were registered for better monitoring.
    • Songhua & Hai still need to increase protection and clean up: In 2021, 3 of the 5 Northern rivers met both Water Ten targets except for the Songhua and Hai. All river water quality improved compared to 2020, except for the Songhua.
  • Violation fines & cases increased: Total environmental violation cases increased by 5% amounting to a 42% increase in fines.
  • Newly launched ecological environment damage compensation: More than 7,000 cases with RMB3.9bn compensated.

We deep dive into the performance of various water bodies in 2021 below…

To better understand the terminology of water quality used by the report, please refer to the following list:

Grade I: suitable for source water and national natural reserve
Grade II: suitable for domestic use (first rate), rare aquatic lives (and some other uses)
Grade III: suitable for domestic use (second rate) (and some other uses)
Grade IV: suitable for industrial use and entertainment use (without contact with human)
Grade V: suitable for agricultural use
Grade V+: not suitable for any use

National surface water quality continues to improve…

According to the 2021 SOEE report, overall national surface water continues to improve steadily and has met the 2021 water targets. Grade I-III national surface water quality has slightly improved from 83.4% to 84.9% in 2021.

The improvement of overall national surface water is most likely due to the improvement of China’s Main River Basins, rather than Key Lakes & Reservoirs and groundwater.

China’s Main River Basins remain in good quality – 5/7 of major river basins meet both Water Ten targets

According to the figures in the 2021 SOEE report (left chart below), the overall surface water quality of China’s Main River Basins has improved its Grade I-III water from 84.9% to 87.1% in 2021; Grade V+ has also reduced from 1.7% to 0.9%.

In 2021, 5 out of the 7 Main River Basins met both Water Ten targets of Grade I-III>70% & Grade V+ <5% – they are the Yangtze, Pearl, Yellow, Huai and Liao (see left chart above). Songhua and Hai have to improve their Grade I-III surface water as it is <70%. Only Liao has eliminated all Grade V+ water while the rest still have less than 5% in this category.

 Yangtze, Pearl, Yellow, Huai & Liao meet both Water Ten targets…

…Songhua & Hai need to improve

Compared to 2020 (see table below) all Grade I-III water has improved for all rivers except for Songhua which has worsened by 9.5%. The Huai, Hai, and Liao recorded the greatest improvement in this category with more than +8% compared to the previous year. All rivers have shown improvement in the Grade V+ water by 0.3%-1.2%.

Key Lakes & Reservoirs – overall quality slightly worsened as monitoring stations doubled


While water quality has improved in China’s Main River Basins, the overall quality of Key Lakes & Reservoirs has slightly worsened. The share of Key Lakes & Reservoirs with Grade I-III was 72.9%, which was slightly worse (by 0.9%) compared to 2020.

The proportion of Grade V+ water remained the same as the previous year at 5.2%. Again, this could be as the number of monitoring stations in Key Lakes & Reservoirs has nearly doubled from 112 to 210 which could reflect a truer picture of the water quality.

Groundwater still has a long way to go

Since 2018, the MEE has been changing the reporting categories for groundwater quality, which make comparison to past years difficult. As opposed to previous years, only two categories of groundwater quality were reported in the 2021 SOEE report, which were Grade I-IV – 79.4% and Grade V – 20.6% (see chart on the right). No reasons were given on the new grouping nor why the groundwater monitoring stations have materially decreased from 10,171 to just 1,900 in 2021.

This fluctuation could be due to work in progress in merging the duties of various monitoring efforts of environmental ministries. As we have already mentioned in our 2018 SOEE Review “do not be surprised to see more fluctuations in groundwater quality data…Hopefully, by the time the ministry restructuring is complete, we will finally see a comprehensive real state of water in China.” This could be also why the shallow groundwater figures were not included in the 2021 SOEE Report.

Changes seen in groundwater monitoring, no reasons given…

….Groundwater still far away from Water Ten target of <15% Grade V

Nonetheless, China’s groundwater is still far away from the Water Ten target of less than 15% in the Grade V water and much work needs to be done. Hopefully, with the “Implementation Plan for Groundwater Pollution Control” that set out standards and rules related to the protection and treatment of groundwater pollution, and a national monitoring mechanism by 2025, we could start to see some improvement in groundwater quality in the near future.

Comprehensive Water 14FYP to fight water pollution

Looking forward, we hope that the new Water 14FYP , an umbrella plan that holds together all water polices and actions, will help the Chinese government to manage water more holistically and yield a “bigger stick” in China’s war on pollution.

Fines are picking up

But already the fines are picking up: in 2021 polluters in China paid fines worth USD1.74bn and USD580mn was paid as compensation to others.

In the new Water 14FYP, we are also delighted to see China expand its watershed monitoring from mountains-to-oceans with new innovations, including the construction of ‘digital watersheds’ for all its major river basins/water sources. All this gives us comfort that China will ramp up its protection and the cleaning of its water resources in the future.

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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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