Bibliographical Information
Summary of the China Case Study
Since 1978 and the onset of reform in China, water
scarcity in many regions of China has intensified. Unrestrained economic
development and rapid societal change without attention to the ramifications of
these transformations for the environment and natural resource use have placed
China's already threatened water supply under tremendous stress. Population and
water use per capita are growing; the physical condition of China's water
facilities is aging; competition between the potential uses for water is
increasing; aquifers are becoming depleted; water pollution is rising; and the
social cost of subsidizing increased water usage is increasing.
Chinese residents currently face a shortage of 28.8
million cubic meters of water daily. According to one Western expert, these
shortages cost the Chinese economy between 5 billion yuan and 8.7 billion yuan
(US$620 million and US$1.06 billion) in 1990. The China case study examined the
impact of this growing water scarcity on state capacity. Perhaps surprisingly,
it concludes that while water scarcity contributes to diminish state capacity,
it does so primarily in an indirect manner and over the long term. The more
compelling story is that political and economic reforms are transforming the
very nature of the state. This process, in turn, has implications for the
overall capacity of the state to develop and implement the policies necessary
to respond to water scarcity in the PRC.
The reform process has ramifications for several characteristics of state
capacity: the state's legitimacy, its fiscal strength, its coherence and its
reach. Frequently, the relationship between the reforms and these factors is a
negative one. The reforms have engendered an overwhelming emphasis on economic
growth, a devolution of authority from central to provincial and local levels,
an institutionally weak environmental protection bureaucracy especially
relative to other industrial and economic agencies, and corruption at all
levels of the Chinese bureaucracy. These trends all contribute to diminish the
efficacy of the state. At the same time, the reforms also contribute to enhance
state capacity. Institutional innovation within the system of environmental
protection has extended the reach of the state. Moreover, greater openness to
the international community has enhanced its fiscal strength.
The reform process also has a more direct impact on levels of water scarcity.
Continued population growth, rising standards of living, and rapid
industrialization intensify the problem of scarcity in water resources.
Water use per capita is growing, competition between the potential uses for
water is increasing, and water pollution is rising.
The picture that is painted by these trends is a
complex one. The Beijing leadership recognizes that the reforms have diminished
state capacity as well as contributed to a growing range of natural resource
related problems. However, its legitimacy is rooted in the continued
exponential economic growth that these reforms have engendered during the past
almost two decades. Thus, while Beijing is racing to redress the negative
institutional and environmental ramifications of the reforms through campaigns,
exhortations, and new laws, it is not willing (or in some cases not able) to
implement policies that might slow the pace of economic development, such as
raising the price of water, increasing pollution discharge fees, or devoting
sufficient state financial resources for local water conservation or waste
management projects.
In this scenario of overall diminishing state capacity
and growing demand for resources, the impact of water scarcity on state
capacity might be expected to be dramatic. However, it is not. In some
respects, the potential negative ramifications are mitigated by opportunities
presented through the transformation of state capacity by the reforms.
Nonetheless, there are important signals that over the longer term, water
scarcity may indeed significantly diminish state capacity in several key areas.
Both demand- and supply-induced scarcities of water
are increasing demands on the state for new infrastructure such as dams,
canals, wastewater treatment facilities, and irrigation systems. This is
placing greater stress on the fiscal strength of the state. Beijing has
attempted to shift a greater portion of the burden of financing these projects
on to local and provincial governments as well as the international community.
In many cases, however, the provinces lack the resources to make such
substantial investments. Even Beijing has been stymied by the overwhelming
costs associated with its desired river diversion project. In response to the
growing responsibility of local leaders to pay infrastructure costs, they have
used China's integration with the international community to turn to the
international community for substantial funding assistance for these
infrastructure projects.
While the short-term implications of this behavior
appear relatively benign, there are potentially quite serious longer range
ramifications for state capacity. First, the autonomy of the state may be
diminished by a greater reliance on foreign lenders. These lenders not only
provide financial aid but also insist on additional politically sensitive
measures such as pricing reform. In addition, a diminished role for Beijing in
the financing of projects and greater dependence on local sources of funding
also suggests a longer-term decline in the reach of the state that will not be
limited to resource management issues. Local leaders, especially at the
provincial level, have become increasingly vocal in their opposition to some
state policies. For example, the Sichuan governor's vocal response to Beijing's
inadequate financial contribution for resettlement engendered by the Three
Gorges Dam indicates a threat to legitimacy of the state. In its most extreme
form, this loss of legitimacy and decline in the reach of the state contribute
to social instability and violent demonstrations of the sort that have occurred
among those slated for resettlement or already displaced along the Yangtze
River.
Both demand- and supply-induced water scarcity result
in substantial interprovincial conflict. Continued population growth, as well
as increasing demands from industry and agriculture contribute to diminish the
coherence of the state by engendering a growing number of interprovincial
claims to these water resources. Rising pollution levels also result in growing
interprovincial disputes over the responsibility and costs of treatment
facilities and clean-up costs. These problems are endemic with little prospect
for immediate resolution. Moreover, Beijing has yet to develop an effective
mechanism for resolving such conflicts.
Water scarcity and pollution also occasionally have
triggered violence in rural and urban areas. There is no evidence that these
are more than isolated incidents with limited ramifications over the long term.
It is worth mentioning, however, the extreme scenario in which such scarcity
continues to grow, especially in urban areas, and a more sustained challenge to
the authority of the state is posed. In combination with a contraction in the
economy and the continued spread of corruption and abuse of power at both the
elite and local levels, a much more threatening form of urban civil violence,
involving migrant workers, unemployed state enterprise workers, grain-short
urban dwellers, and disgruntled peasants might arise.
In the final analysis, water scarcity probably does
not pose a substantial or direct challenge to state capacity. Moreover, as
provincial and local regions grow wealthier, they may replace the center as the
primary initiator and financial sponsor of environmental protection policies.
Thus, while state capacity may be diminished in some respects, other elements
of the state may emerge to respond more effectively to regional water demands.
In this context, water scarcity in China should be considered a long-term
threat to continued economic growth and state capacity that has yet to be
acknowledged fully by the Chinese leadership. Even so, it remains a challenge
that China may well meet as the economic and political reform process evolves.
Table of Contents
Summary
I. Introduction
-
Hypotheses on Chinese Reform and State Capacity
-
Hypotheses on Environmental Scarcity and State Capacity
II. Renewable Resource Scarcity Within China
III. The Backdrop to Water Scarcity: Economic,
Political, and Societal Transformation
-
Demand-Induced Scarcity
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Supply-Induced Scarcity
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Future Trends in Economic Development and Water Scarcity
IV Beijing Municipality and Gansu Province
-
Beijing Municipality
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Gansu Province
-
Water Scarcity and State Capacity
V Economic and Political Transformation and State
VI. The Impact of Water Scarcity on State Capacity
VII. Conclusion
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