Defining the Geopolitics of a Thirsty WorldSM
The Thirsty Dragon: China’s New Leadership Faces A Water Security Challenge

Courtesy of Future Directions International, a report on China’s recently concluded China’s Third Plenum and, despite early signals indicate a shift towards more balanced development, the unlikeliness that environmental reform will be sufficient to avert the nation’s burgeoning food and water security crises:

Background

The Third Plenum of the Central Committee of the Communist Party has recently concluded in Beijing. The strategy session – which accompanies China’s infrequent leadership transitions – has signalled an era of “comprehensively deepening reform”, which will seek to address the nation’s staggering social, environmental and institutional strains, while continuing to support economic growth. The concluding statements of the plenums have traditionally favoured broad pronouncements; the actual level of success in the implementation of these new reforms will only become clear over time. The reforms proposed for the environmental sphere are, however, “unprecedented in both scale and degree”, but will be necessary if the country is to protect its future food and water security.

Comment

Despite a long national policy and cultural tradition of food self-sufficiency, food demand has outstripped supply in China and it will import record quantities of grain in 2013-2014. The country is now only 95 per cent food self-sufficient and is struggling to feed 20 per cent of the world’s population with only seven per cent of its potable water. As income levels continue to rise, China no longer has adequate resources to supply its population’s changing food consumption patterns. The situation is exacerbated by its severe pollution and environmental crises.

The decision of the Plenum to continue to relax the one-child policy, to stimulate population growth and address China’s demographic imbalance, could further contribute to food demand pressures. China will now allow couples to have two children if one of them is an only child. This could create increased food demand in the medium term. The extent of the impact of the policy change is unclear. It is likely that the primary check on fertility rates is no longer the draconian policy, but the financial constraints experienced by many urban couples.

Economic growth will remain the top priority of the Communist Party and strong growth is expected to continue in the medium term. This factor will be the most significant driver of food demand. Rising incomes and the growth of the middle class are causing a shift in consumption patterns, which is driving rising demand for high-value food products, such as meat and dairy, which are water and land intensive.

As food demand continues to increase, further pressure will be placed on China’s resource base, which is already crippled by pollution. Agriculture accounts for between 60 and 70 per cent of water use, but the Chinese Academy of Sciences reports that 43 per cent of surface water is too polluted to use. A further 57 per cent of urban groundwater – the primary source of drinking water for hundreds of millions of people – is also polluted. Soil pollution is so extensive that data about it is considered a state secret. Air pollution has led to agricultural yields declining by up to 25 per cent in some parts of the country.

One outcome of the Plenum is to reduce forced land seizures – believed to have impacted more than 64 million Chinese families – and improve property rights for farmers. Without significant measures to address environmental degradation, though, China’s food security situation will continue to decline. China has already spent more money than any other country on land and water restoration, yet the extent of the damage is such that the incidence of environmental crises continues to rise.

It is likely that even with the reforms from the Third Plenum, China will become more dependent on food imports over time. The threat of catastrophic water crises will also spur heightened competition between China and its neighbours over transboundary water supplies. China’s potential food and water insecurity could be a factor in regional destabilisation; however, it also creates opportunities for Australia to maintain an export market for agricultural products, as China transitions towards a consumption-based model of economic growth.



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