Key Water Policies 2015 – 2016

By Dawn McGregor 16 March, 2016

China has released a host of key water-related policies, stay on top of them with China Water Risk's review

As per our article “8 Game-Changing Policy Paths” in February 2015, China is setting policies to shift from ‘economy vs environment’ to ‘economy & environment’. Since then, the government has continued down this path, releasing a host of policies. Actually it released such an array that instead of listing key-water related policies like we did for 2013-2014 (see here), we have summarised the most recent policies into 8 sections. Not all policies are included but the following should give you an understanding of the key short- and long-term changes and implications.

1. ‘War on Water Pollution’ via the Water Ten Plan and various other policies

At the National People’s Congress meetings in 2014 Premier Li Keqiang declared war on water, air & soil pollution. The focus on pollution continues as shown with Li’s statements at the recent 2016 Congress, where he stressed that this year’s key focus will be water and air pollution.

Key to winning the war on pollution is the ‘Water Pollution Prevention and Control Action Plan (“Water Ten”), released in April 2015. The Water Ten Plan is an umbrella plan that ties in other game-changing policies, all in a tight timeframe. Specific industries have been singled out, some more than others and tasks/actions in the plan are designated to specific ministries, many of which require cross-ministry collaboration. More on the Water Ten Plan here.

Protecting drinking water sources is part of the Water Ten Plan and is clearly a focus of the government with additional specific regulations (see table below).

Also clear are the various approaches the government is taking to achieve the pollution clean-up including, laws, finance, monitoring, technology and more.

However, enforcement remains an issue as China’s environmental Minister Chen Jining recently said that China still needs more power to crack down on polluting companies. “Companies are under pressure and local governments are under pressure, but there is still a long way to go before every enterprise obeys the law,” said Chen. Having said that, last year 20,000 firms were shut down and 34,000 forced to suspend operations for a period, and a total of RMB569 million in fines was paid.

2. Monitoring and testing of environment – an important and growing  sector

To avoid falling victim to the ‘war on pollution’ monitoring and testing are key; one needs to be able to measure performance and impact. With both incentive and punitive measures, results from monitoring and testing can have significant impact.

In mid-December 10 company officials were detained for fabricating pollution data and some of the companies may face criminal lawsuits. Monitoring is not restricted to pollution (‘quality’) but is also important for quantity aspects. See key policies in this area below.

3. Continued focus on stringent water management

Given China’s limited water resources how much water it uses and what it uses it for is crucial. This year’s No. 1 Document again stressed stringent water resources management; “To implement the most stringent water management system to strengthen the management of water resources by holding the “Three Red Lines…” 

A few ways China uses to manage its water resources are water permits, groundwater monitoring and quota allocations. Provincial water quotas are currently being reviewed to be further divided between sectors. For water-management related policies see table below.

4. Food security still paramount with array of agriculture policies

Also in this year’s No. 1 Document as a top priority was Agriculture. This is not surprising given that food security is paramount to China. However, to achieve this, food safety must also be addressed which requires monitoring and testing. Various policies have been released to achieve both food security & safety (see table below).

A pollution prevention and control plan for the ‘soil’ part of the ‘war on pollution’ is expected this year.

5. China’s powerscape – Coal is getting a clean-up and renewables expanded

Power is still high on global agendas post COP21 (see latest developments here). China’s power policies broadly fall under three groups: 1. clean-up coal, 2. expand renewables and 3. energy conservation. All of these have implications for water.

See our latest research with IRENA on saving water with renewables & carefully choosing cooling technologies, and our comprehensive analysis of China’s powerscape here.

6. Finance and business encouraged to go ‘green’

All of the sections above need money to happen, the ‘war on pollution’ needs funding. A way to secure some funding has been through ‘green’ finance. China’s push towards this has intensified over the last year – more here.

Domestic demands for RMB2 trillion per year to finance climate solutions & address environmental issues (more on this here) as well as global developments like COP21 (see our on-ground review here & implications for China here) are fast-tracking this ‘green’ push. Future prosperity means being ‘green’, which the below policies reflect.

7. No waste & more recycling – circular economy is still the development mantra

Circular economies continue to be a main development focus since 2009 when China became the third country in the world to enact a law on circular economy promotion.

Given China’s resource constraints circular economies are not merely an item on a wishlist but the way out of these constraints and to ensure future prosperity. They are integral to China’s march towards an ecological civilisation.

Since the detailed strategy update in Feb 2015 the below policies have been released.

8. China is clearly guiding its march towards an ‘Ecological Civilisation’

Ultimately all policies, plans and regulations are to move China to an ‘ecological civilisation’, which it aims to be by 2050. Reaching an ecological civilisation means transforming the economy so that it can continue to achieve economic development despite limited resources.

The biggest recent transition signal is ‘Made In China 2025’, released in May 2015. It is the first 10-year plan and is designed to transform China from a manufacturing giant into a world manufacturing power through promoting 10 key industries.

The transition to an ecological civilisation is all encompassing from individual Environmental Impact Assessments (EIAs) to China’s national climate change policy and everything in between. In the table below are key policies propelling China on this march.

Further Reading

• Beautiful China 2020: Water & The 13 FYP – China wants to exert tireless efforts to build a Beautiful China where the sky is blue, the land is green and the water runs clear. Find out what this means for water, the environment and the economy in the next five years in the upcoming 13th Five Year Plan
• What China’s New Green Bond Rules Mean – China’s new green bond rules can make it a major player in the global green bonds market. Trucost’s Huang & Ip expand on their Chinese characteristics and how they can help raise the annual requirement of RMB 2 trillion for climate solutions & environmental clean up
• The Road From COP21 So Far – Political momentum on climate action has not let up since Paris. With Fiji being the first to ratify the climate deal, CDP’s Kate Levick updates on the road so far to a low-carbon economy
• China Needs Managed Aquifer Recharge – Managed Aquifer Recharge (MAR) can help better manage China’s water resources and increase climate resilience. Zheng, Wang, Zheng & Dillion from China’s MAR Working Group, discuss opportunities & challenges in the face of rapid urbanisation
• 8 Game-Changing Policy Paths – There has been a fundamental shift in planning China’s future growth with changes in regulatory landscape due to multiple polices set & changes in law. Many come into full effect in 2015. Get on top of these.
• 2013-2014 Key Water Policies Review – Haven’t been following China’s Three Red Lines strategy to protect water? Check out our summary of key water policies from 2013 to 2014.
• The War on Water Pollution – Premier Li Keqiang has just declared war on pollution. Tan expands on the government’s stratagems & offensives and fundamental changes required to shore up the MEP’s arsenal in order to wage a successful war.