Q&A: Ma Jun on China’s Economic Development and Water Resources

Ma Jun: I think, we are still in a transition period. It’s just getting started. At this moment, there are a lot of talks and discussions about shifting the focus from the expansion of supply—from engineering projects—to efficiency, demand-side control, and water conservation. But in reality, the lion’s share of the majority of resources is still put on the expansion side. So we haven’t seen a real turning point yet. The water efficiency, no doubt, is going up, just like energy efficiency. It’s moving up in a quite significant way. But on the other hand, the total scale of our economy is expanding in such an unprecedented speed, and sometimes even if we have higher efficiency, we are still facing increasing constraints.

Ma Jun: First and foremost, we’ve recognized that there’s a limitation there. You shouldn’t just try to build up your industry beyond your environmental capacity. So you have to think about the carrying capacity. And then, of course, based on that, you can do more on the conservation side—basically, reuse and recycling.  At this moment, the water efficiency of some of the industries in that region, as we can see from our digital map or from the on-the ground investigation, is still low. So there is still big room for improvement. At this moment, we have some motivation there, some driver there. One of them, unfortunately, is the scarcity of the resources. This becomes a major driver for them, but on the other hand, we can add on that with better enforcement, more stringent enforcement of rules and standards, because even in that region, we still keep seeing all these factories breaking the rules and standards. And their discharge is sometimes massive, enormous. And sometimes the violation of standards can be quite outrageous. We have seen some cases with extremely high concentrations of COD (chemical oxygen demand). If we can improve the enforcement, we can provide some incentive for that. And then, on the market-approach side, besides the water rights trading, we can still work. There’s big room for us to work on the pricing side, especially the pricing of water for industrial use. There’s still room for major elevation of that. I think the principle should be that this must reflect the scarcity of the resources.

Ma Jun: Over the past 10 years, we have witnessed an unprecedented expansion of our economy. The breakneck economic growth has really put huge extra pressure on our water resources. At this moment, we haven’t seen the turning point for us to basically de-couple our economic growth from the expansion of resource taking. It’s still moving on the track of a highly energy- and resource-intensive model. In China, there’s increasing understanding—including the understanding of our top leaders—that we need to de-couple that because if we keep moving along with this, we are going to have huge problems. It’s not just about a biodiversity problem, it’s also about serious social and political consequences, like eventually the impact on public health through all this pollution. And the sustainable use of our resources, like water. The clean water resources are being destroyed by all this discharge. And social stability problems. Energy security concerns. And even China’s peaceful rise globally, our relationship with other countries, China’s integration into the global community: I think all of this could be hampered by this. So I think there’s a sincere intention, or will, among Chinese people and the Chinese government to change that. But, at this moment, we are still exploring the ways to achieve that. We have the world’s largest population, limited resources, and an unprecedented scale of industrialization and urbanization. So how to handle all of this, how to balance the needs for better life, for more developed economy with our environmental protection and eco-restoration target: I think this is really a litmus test, a real test to China.

Having said that, through our research and the research and analysis of the major experts in China, we came to the conclusion that our discharge is still way beyond the environmental capacity to sustain that. And the reality is probably even harsher than what the statistical data shows because sometimes there are some gaps in the data-gathering and -reporting system. So the reality means that we have to double our efforts. Sometimes there are a lot of talks about shifting the focus from expansion to conservation, but in reality, much of the resources are put on projects like the South-to-North Water Diversion Project. We should take no pride of doing such a project. This is a sobering moment for us to reflect upon how we drove ourselves to such a situation. What if we don’t transfer that water to north China? We probably could have a collapse of the social economy in some of the cities, which are going to run out of water. So we have to seriously reflect that. If we don’t, this extra volume will only delay the coming of the crisis a little bit. It will not really resolve the whole problem. It would mean that even with this, it cannot fill out even the current, existing gap, let alone that much bigger gap in the future, unless we do something very, very different in our water governance.

Ma Jun: On that point we could see a real conflict of interests. On the one side, we are facing increasing demand for our energy use, and the consumption is going up very substantially, along with the improvement of people’s living standards and also along with the expansion of our economy. But, on the other hand, we are having these huge, very severe constraints of water resources in our energy-rich regions. To reconcile this, the only way out is to manage the whole thing in a more efficient way—from the designing, through the construction, to the operation. We have to ensure it has the highest efficiency in water use, and reuse and recycling. But, at this moment, the reality is still that these projects are not well-designed: with some of them, the water efficiency is still not the highest, and the discharge contains not just normal pollutants, but, in some cases, it could be quite toxic substances which will create even bigger problems for our water resources. So I think we should take those not just as a problem, as a source of the problem, but also as a potential. We do have our potential for major improvement of that. I think we should eventually still need to follow the principle that I just explained—that first we should keep our carrying capacity in mind, and then try to make it as efficient as possible.

Ma Jun: I would say that the prospects are very much worrying to us who do some research into this. And we have seen efforts made, but they have been offset by the huge development plan. The industrialization and the urbanization are still going on in a huge way, in a massive way, which will increase our demand for water. In the meantime, we are having constraints of resources, and I see some of the regions are still putting their hope on projects like the SNWT. It’s not a surprise to us because this has been the situation for the whole North China Plain region since the 1950s. Since the 1950s, there has been an understanding that if they use up all their water, then they could have the water flowing from the Yangtze River to their doorway. And now, a few years ago, many argued that the day has come because we have been using our resources in a highly unsustainable way. But then we realize that from the south, we can only get a limited amount because there the consumption is also rising substantially, and the resources are limited. And the social cost could be quite serious. And today, on the western route of the SNWT, we have seen, I think, the most severe conflict of all these different interests. In the North, I think, there is huge demand for this; there’s aspiration for that water to come. But in the southern part—where the water is going to be taken from—we have seen some loud, dissenting voices. And they do have their points because some of them are not just about saying that we are going to see a degradation of our environmental quality, or the quality of our rivers, but they are challenging the basic data and research, which the whole project is built on—in the engineering.

Ma Jun: I think, 10 years from now, with the ongoing efforts, China will at least prevent a collapse of our resources and system, social and political system, in our highly water-scarce regions. But, on the other hand, we are going to push even deeper into nature. Now some people argue, “OK, with the South-North Water Diversion Project, the volume will be limited. So we need to extend. The Yangtze River cannot carry all of this, so we need to go further. If we go further south, to those other major rivers in the southwestern part of China, and then we should go…” Some say, “Ok, these are too far. Let’s go to east, to the Bohai Sea and transfer water from the sea all the way to Inner Mongolia and even Xinjiang.” I think those big elephant projects—there’s no problem for people to think about them, but, I hope, again, just like 10 years ago, I hope we can, at least from the very beginning, put environmental and social consequences into our consideration. Ten years from now, what I worry is that we are going to push deeper into nature, we are going to further stretch our limited resources. And some of the injury and harm that we did to the society and nature means that a whole generation of people could be hurt by this contamination and the increasing scarcity—access difficulties in certain regions.

And then the other example is about the huge dams. This is another example of the conflict between our energy demand and the water resources protection goal. If we continue the trend that we are seeing now, in ten years’ time—in less than 15 years’ time—we are going to see most of our rivers being seriously dammed, and we are going to see the over exploitation of our rivers, of our water resources, happening on each major river at that time. And we are going to see a permanent loss of our biodiversity on those rivers. So I see that future is there. But, on the other hand, I do see some bigger efforts made, some more participation from all the different stakeholders of our society, including the NGO activities. Through these efforts of environmental transparency, we have managed to push over 320 major polluters on our list to come here, to come to the NGOs mostly to explain what went wrong and how they try to fix that. And quite a few of them have been through the independent, third-party audit. And 50 of them managed to remove some of the multiple records of violation by proving that they are in compliance with the laws and standards, that they have taken sufficient corrective actions.

Ma Jun: At this moment, the NGOs in China are still in their infancy. The first environmental group got registered in 1994, and, up to now, we are having several hundred active local NGOs and grassroots groups—but they remain small. They started with an awareness-building project, mainly started by doing environmental education. Around 2003, with the Environment Impact Assessment Law—which is a key legislation, because it’s the first law that requires public participation in the environmental decision-making process—some of the organizations like the Green Earth Volunteers and the Green Watershed got involved in the public decision-making process. For example, they tried to get involved in a dam-building project. But, just fairly recently, there’s a new trend for NGOs to pay more attention to corporate behavior. Before, the relationship between NGOs and corporations in China was mostly about NGOs wanting to do some environmental project, and the enterprises had their philanthropy-type funding project. So NGOs could write a proposal and do something that is totally irrelevant to the corporate behavior: planting trees or doing some other philanthropy project a thousand miles away from that. But then, fairly recently, we started paying attention to the corporate behavior itself because we now understand that their behavior and performance matter greatly to the pollution control in the country.