(John Kemp is a Reuters market analyst. The views expressed are
By John Kemp
LONDON, July 7 Booming demand for food in
China's southern and eastern cities is worsening water shortages
in arid northern provinces, adding to the country's
environmental problems, new research shows.
"Consumption in highly developed coastal provinces is
largely relying on water resources in the water-scarce northern
provinces, such as Xinjiang, Hebei and Inner Mongolia, thus
significantly contributing to the water scarcity in these
regions," an international group of researchers wrote in the
latest edition of the journal Environmental Science and
"Rich coastal provinces gain economic profits from
international exports at the expense of ecosystem quality in the
less developed regions," the researchers from the University of
Maryland and the International Institute for Applied Systems
Analysis concluded ("Virtual Scarce Water in China" June 2014).
Rain and snowfall is concentrated in south and south-western
China, as well as along the east coast, which should be the most
favourable regions for agricultural production.
But these provinces have experienced the fastest
industrialisation and urbanisation since reform and opening in
1979. Large amounts of farm land have been converted to
industrial and residential use.
In response, much of the country's agricultural production
has been pushed north and inland to regions with much less rain.
TERMS OF TRADE
Some 109 billion cubic metres of water was traded between
Chinese provinces in 2007, mostly in the form of "virtual water"
contained in fresh and processed foods.
The main virtual flows are from agricultural regions like
Xinjiang, Inner Mongolia, Hebei, Ningxia and Gansu to the
megacities of Beijing, Tianjin, Shanghai and Chongqing, as well
as the heavily industrialised provinces of Shandong, Zhejiang
and Guangdong along the east coast.
Water flows demonstrate the 19th century British economist
David Ricardo's theory of comparative advantage. China's
southern provinces have advantages over the north in both
industry and agriculture. But their comparative advantage is
greater in industry, so the south has specialised in industrial
production and forced the north to specialise in farming.
As provinces and cities along the eastern seaboard have
become ever more dominant industrially, farm production has been
driven into the drier areas of the north and west.
The key change over the last three decades, as the
researchers explain, is that the south has become much better at
industrial production, rather than the north becoming better
Xinjiang, which has annual rainfall of less than 10
centimetres, exports billions of tonnes of water each year to
Shanghai (where annual rainfall is 1 metre or more) and
Guangdong (which receives 2-3 metres per year).
Farming accounts for 98 percent of water consumption in
Xinjiang, 84 percent in Inner Mongolia and 83 percent in Hebei,
compared with just 67 percent in Guangdong and 31 percent in
Shanghai ("Virtual scarce water in China: supplemental data"
Industrial and water imbalances are worsening China's
environmental problems. Northern China is already subjected to
dust storms and far worse pollution than the south. Now the
region is suffering from increasing water stress.
For example, Zhejiang is a major exporting province on
China's east coast. But only 20 percent of the ecological impact
of Zhejiang's exports was felt in the province, according to the
researchers, while the rest was "outsourced" to other parts of
China, including Xinjiang (40 percent), Hebei (7 percent) and
Inner Mongolia (5 percent).
Increased use of irrigation and reliance on groundwater have
enabled northern provinces to boost agricultural output, but is
not sustainable in the long term as regional aquifers fall.
In response, the government's controversial South-North
Water Transfer Project aims to send almost 45 billion gallons
each year from the Changjiang (Yangtze River) through a series
of giant canals to Beijing and other parts of the north.
The project, budgeted to cost twice as much as the Three
Gorges Dam, is the world's largest civil engineering endeavour
and is not scheduled to be fully completed until 2050.
It might be more efficient, however, to encourage northern
provinces to reduce their production of water-intensive food and
focus on items which have higher value added and lower water
content, according to the researchers.
But the government's efforts to encourage more industrial
development in the west have so far had limited success. The
south's industrial advantage has appeared to become even more
entrenched in the last decade, forcing northern areas even
deeper into water scarcity.
(Editing by David Evans)