3 Things You Need To Know About Hunan

By Chien Tat Low 16 August, 2018

CWR's Low highlights why Hunan is important in the context of Yangtze River Economic Belt

Within the Yangtze River Economic Belt (YREB), Hunan is located along the central to southern reaches of the Yangtze River. If the YREB were a dragon, Hunan Province would form the creature’s backbone. As a centrally located province, Hunan is a focal point that connects the provinces and municipalities that run from the Yangtze’s upper to lower reaches. As such, Hunan will play an important role in China’s future GDP growth. Equally, if done properly, development in Hunan is poised to reduce both water use and pollution along the YREB.

Hunan will play an important role in China’s future GDP growth…

 

…if done properly, development in Hunan is poised to reduce both water use & pollution along the YREB

Hunan already plays a major role in the national economy. In 2016, Hunan’s GDP reached RMB3.15 trillion, coming in ninth among Chinese provinces, and the province’s per capita GDP is RMB46,382. The province generates a significant proportion of its GDP through secondary and tertiary industries, at 44.28% and 46.37%, respectively. Primary industries make up the remaining 11.34% of the provincial economy. Given the reliance on water and other environmental resources of the primary and secondary industries, Hunan’s development will have a significant impact on environmental outcomes throughout the YREB.

Here are 3 key things to keep in mind about Hunan in the context of the YREB:

1. Current water use is not the way forward              

Although Hunan’s agriculture industries as a whole produce just over 11% of the province’s GDP, it is responsible for over half of all water use in Hunan. In 2015, Hunan is ranked the second largest water user in YREB at 33 billion m³ and its per capita water use reaches around 500m³ per person, over 10% higher than the national average of around 445m³. However, this high rate of water usage is tied to the province’s below-average GDP among other YREB provinces, which poses the question of how to increase the GDP with less water consumption.

In Hunan, the water caps for 2020 & 2030 will be set to increase by no more than 2.94 billion m³, which is <10% of the YREB total

Despite the province’s reliance of water-intensive industries, authorities in the YREB have placed great emphasis on the Ecological Environment Protection Plan. One component of the plan, which builds on the earlier Three Red Lines Policies, is to introduce caps on water usage. In Hunan, the water caps for 2020 and 2030 will be set to increase by no more than 2.94 billion m³, which represents less than 10% increase of the YREB’s total capped water use in 2030. In order to grow, Hunan and other provinces will have no choice but to reduce water use in key performance indicators, including water use per unit GDP and water use per unit industrial value added (IVA).

2. Huge rice production vs. heavy metal discharge

China is the world’s top rice producer, and Hunan produces some 13% of China’s total rice output, a total of around 26 million tonnes per year. This is more than double the amount of rice exported by Thailand, the world’s largest rice exporter. To produce rice and other agricultural products at this scale, Hunan farmers use over 2 million tonnes of fertiliser. This reliance on fertilisers within the Yangtze River’s basin increases the risk of waterborne pollution spreading downstream from Hunan.

In an odd marriage of Hunan’s two major industries, extraction & agriculture, pollution caused by mining often shows up in agricultural products

e.g. cadmium rice

Agriculture is not the only industry that has an outsized impact on water quality. The extraction and refinement of critical raw materials (CRMs) also plays a major role in Hunan’s economy. The province is a key producer of indium (34% of China’s output), tungsten (35%) and antimony (76%). While these rare earth materials power China’s electronics manufacturing capacity, the production of these materials is a major source of heavy metal emissions. Contaminated water used in mining operations drains back into the Yangtze. In an odd marriage of the province’s two major industries, extraction and agriculture, pollution caused by mining often shows up in agricultural products. In the well-known Cadmium Rice incident, rice produced in Hunan became contaminated with significant levels of Cadmium. This incident signals the risks to food safety and security that could emerge if environmental controls are not maintained.

3. Downstream effect

Hunan’s reliance on agriculture and water-intensive industries means that the province produces great amounts of wastewater. At 3.14 billion tonnes of wastewater per year, this makes Hunan the YREB’s fourth-largest producer of wastewater, or around 10% of the region’s total wastewater discharge. Most of this wastewater is discharged into the river system, which might contribute to the decline in the Yangtze’s water quality and ecological viability. Given the amount of wastewater discharge of wastewater into the Yangtze, improvements in the agricultural and industrial sectors are key to tackling the issue.

Any pollution or decline in water quality originating in Hunan could pose a serious threat to communities located downstream

Although the items discussed above relate specifically to Hunan Province, the nature of the YREB and the Yangtze River system are such that any pollution or decline in water quality originating in Hunan could pose a serious threat to communities located downstream. Likewise, the water quality in Hunan depends on the policies of municipalities further upstream. Therefore, these issues cannot be considered in isolation, but should be reviewed at in a regional or even national context.

The issues outlined above will determine Hunan province’s levels of water stress in the years to come. Whether Hunan is able to adapt to changing conditions while safeguarding the water quality of the Yangtze River depends both on its own policy initiatives as well as developments in the region. The upcoming YREB II report by China Water Risk – MEP FECO will take a closer look at water-nomics challenges facing Hunan and the YREB as a whole.

Further Reading

• Audit! Yangtze River Economic Belt – China’s first ever basin-wide environmental audit on the Yangtze River Economic Belt is an unprecedented step towards balancing economy & environment. China Water Risk’s Woody Chan shares the good and not so good findings
• Sharing Rivers: The Lancang-Mekong Case – Using the emergency water release by China to help downstream countries in the Lancang-Mekong River Basin as an example, Tsinghua University’s Prof. Zhao Jianshi explores the benefits of cooperation & the importance of China
• China’s Renewable Energy Quotas – China is releasing its first ever renewable energy quotas along with Renewable Energy Power Certificates to improve trading; see what these mean for provinces & renewable enterprises with China Water Risk’s Yuanchao Xu
• Financing Green Infrastructure In The GBA: Key Takeaways – The Greater Bay Area accounts for 12% of China’s GDP but climate change means this is at risk. How can green finance help? China Water Risk’s Dharisha Mirando shares key takeaways from the HKUST conference
• Upper Yangtze: Integrated Water Management & Climate Adaptation – Experts from China & Switzerland introduce their joint project to enhance water management & climate adaptation in the Jinsha River Basin. What lessons have been learned & what is next?

• 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
• 8 Things You Should Know About Rice & Water – How much of water & farmlands are used to grow rice in China? What about exposure to Cadmium, Mercury, Lead & Arsenic? Can China ensure rice security? Here are 8 things you should know about rice & water in China
• Toxic Phones: China Controls the Core – We review CLSA U®’s report which warns that transitional risks are abound as China says no to pollution and yes to a high tech future. What are the top-5 ‘bewares’? China Water Risk’s Debra Tan expands

China Water Risk, together with the Foreign Economic Cooperation Office of the Ministry of Environmental Protection (MEP-FECO), jointly published the policy brief “WATER-NOMICS OF THE YANGTZE RIVER ECONOMIC BELT: Strategies & recommendations for green development along the river”.

Fast economic growth and rapid urbanization have put much pressure on the water resources and ecosystems along the Yangtze. As such, the brief explores the linkages between water use and allocation, as well as pollution control and economic development in the Yangtze River Economic Belt (YREB).