Key Water Policies 2016 – 2017

By Dawn McGregor 16 March, 2017

Missed out on the key water & water-related policies in China over the last year? Get up to speed

China’s “Two Sessions” have just come to an end. The main environmental focus was air pollution with Premier Li Keqiang promising “we will make our skies blue again” (more on the two session here). However, it is what lies beneath the skies, water, which is crucial to an ecological civilisation. And the water situation is urgent. WRI’s latest data shows that water stress across 54% of China worsened in 2001-2010, which means 678 million people live in highly water-stressed areas. More on this here.
We wrote about China’s changing regulatory landscape last month in “5 Regulatory Trends: From Enforcement To Finance” so this article is more a summary of all the key water and water-related policies that have been released over the last year that you should know about. We have done this for the last three years, which you can find below.

This year, the policies have been grouped by categories: Water, Ecological Environment, Pollution, Regional, Finance, Markets & Industry, Energy and Technology.

Water Focused Policies

Numerous water focused policies have been released over the last 12 months but the ‘Water Pollution Prevention and Control Action Plan’ (“Water Ten”) released in April 2015 remains the most impactful. You can read more about the Water Ten Plan here and what it means for textiles here.
Separately, the ‘Law on Prevention & Control of Water Pollution’ has been approved by the State Council in December 2016. It is now sitting with the Standing Committee for final approval, which according to inside sources may be within 1H2017.

Meanwhile, China’s amended Environmental Protection Law has been in effect for two years now.  See our interview with Liu Feiqin on what its impact has been here.
Other significant developments include the National Development and Reform Commission’s (NDRC) announcement that China will start 15 new major water conservation projects in 2017 and that total investment in major water projects under construction should exceed RMB900 billion by the end of this year.

Ecological Environment Focused Policies

China continues on its march towards becoming an “ecological civilisation”. However, to nudge this forward China has upped the “stick” part of its “carrot and stick” approach. Following environmental inspections in three provinces in 2016, more than 1,500 government officials were called to account for recent major environmental problems. By January 2017, the Ministry of Environmental Protection (MEP) announced that these environmental inspections would cover all provincial regions this year.
Moreover, all provinces must submit their ecological red lines by 2020, which will put large parts of the country off-limits to development. The continued prioritisation of the environment is clear from these news items and the policies below.

Pollution Focused Policies

China is three years into its “War on Pollution” but pollution – be it air, water or soil – continues to pose significant challenges. On December 28 2016, after severe smog blanketed Tianjin, the city closed highways and grounded flights. Tianjin was one of more than 40 cities in China’s northeast to issue pollution warnings within a 48 hour period. In January 2017 Beijing announced that it will establish a specific police force to deal with environmental offences as part of its efforts to clean up its air.

As for soil pollution, in May 2016 the ‘Soil Pollution Prevention and Control Action Plan’ (“Soil Ten”) was released. With all the three pollution “Ten Plans” now issued (Air Ten: Dec 2013; Water Ten: April 2015 and Soil Ten: May 2016), China’s triage of plans to tackle air, water & soil pollution as part of the official war on pollution declared in 2014 is now complete. For more on the Soil Ten read our article here.
More recently, in January 2017, the MEP announced that there will be a lifelong accountability system for polluters to control soil pollution. From July, polluters, both companies and individuals, will be responsible for restoring contaminated land.
Also on the soil front, China is to create soil pollution prevention law this year, according to the work report of the NPC Standing Committee.

For more on pollution data monitoring and collection, as well as enforcement and the “carrots” being offered for being green, see the articles below.

Regional Focused Policies

In early 2016, development of new large-scale projects on the Yangtze River was put on pause by President Xi Jinping. The Yangtze River Delta (YRD), Pearl River Delta (PRD) and Beijing-Tianjin-Hebei (JJJ) have been China’s industrial powerhouses but at significant cost to the environment, which the government is now working to manage better. Accordingly, there have been various policies on new development paths for the YRD, PRD & JJJ, in addition to an industrial shift westward.
For more on the YRD see our joint brief with MEP FECO, where we explore the linkages between water use and allocation, as well as pollution control and economic development. See the below for the brief and related articles.
Other regions facing changes are the North of China, where rare earth mining is rampant and along the East coast where the textile sector is focused. We did a deep dive report on the rare earth industry and its costs to the environment, as well as a brief on the risks and opportunities facing fast fashion in China with the Water Ten Plan. You can access these reports below.

Finance, Markets & Industry Focused Policies

It is full steam ahead in China on green finance and greening industries. As host of the G20 last year, China set-up the G20 Green Finance Task Force. In July 2016, the Bank of China issued a USD3 billion equivalent green bond. The Chinese government has also put into motion a new resource tax to replace the old and inefficient resource fee system. Get up to date on its green finance movements with the articles below.

As for greening industries, China continues to develop its ‘Made In China 2025’ plan, as well as pushing Strategic Emerging Industries. Stricter pollution standards and higher efficiency rates are part of this push. For more see key related policies below.

Energy Focused Policies

With high levels of pollution and smog blankets, the power sector, in particular coal, has been the focus of much news and change. The latest, released March 5 2017, is that coal capacity will be cut by 150 million tonnes – tackling both pollution and over-capacity.

For cleaner energy, China is pushing renewables like solar and wind and potentially new water sources for the sector – more below.

Technology Focused Policies

Technology is important in cleaning-up. Indeed, the Chinese government is heavily pushing innovation on this front but it’s not always easy to know which to use. To help, it has been releasing list of recommended technologies for different sectors.

Further Reading

• Blue Skies & 13FYP Green Development – Air pollution and the battle on “blue skies” was by far the major environmental focus at China’s Two Sessions. Water and soil are no less important but yet softer and more general targets were set for them. See China Water Risk Hongqiao Liu’s review for the key takeaways
• China’s Water Stress Is On The Rise – Water stress across 54% of China worsened in 2001-2010. The World Resources Institute’s Dr Jiao Wang, Dr Lijin Zhong & Charles Iceland deliver the good and the bad news of China’s latest water stress data
• China Leads The G20 On Climate Change – In 2015, the world economy decarbonised at a record 2.8%. China led with the biggest reduction of 6.4%. PricewaterhouseCoopers’ Robert Milnes on how this is tracked in their Low Carbon Economy Index
• Cost-Effective Carbon Reduction In Wastewater Treatment – The wastewater industry consumes a lot of energy. Xylem’s Lu Shuping shows how its rapid expansion makes it ripe for attractive energy savings opportunities, especially in China
• MyH2O – Test Your Water – To improve transparency, Charlene Ren set-up MyH2O, one of China’s first online crowdsourcing networks on drinking water quality. We sat down with Ren to learn more about their testing, interactive mapping platform and what’s next

• 5 Regulatory Trends: From Enforcement To Finance – Since 2016, China’s environmental policy landscape has undergone a series of important changes. CWR’s Xu summarises key regulations & 5 trends you need to know, from greater enforcement to green finance
• 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 policy shifts
• China’s Water Resource Tax Reform – The recently launched water resource tax reform will ultimately supersede the existing resource fee system. China Water Risk’s Yuanchao Xu on how the two systems compare and why Hebei is taking lead as the pilot city
• Water PPPs To Lead In China – All new water & wastewater projects in China need to follow the Public-Private-Partnership (PPP) model. Will this mean big change and how have other water-related projects been funded in China? China Water Risk’s Yuanchao Xu takes a look
• Key Water Policies 2015 – 2016 – Over the last year China has released multiple of key water-related policies ranging from tackling the war on pollution, monitoring, food & energy security, green finance to promoting circular economies and more. Stay on top of them with China Water Risk’s review