Shanghai Daily spilled the beans in their Early algae outbreak threatens Taihu Lake again that should make everyone perk their ears up and pay attention.

For me, there are no greater problems in china on a long term basis than water. It is one of thefundamentals that go along with shelter and food in the categories of human “must haves”. for china, it is also an economic “must have” the economy relies on water for its huge industrial and agricultural economies.

Without clean water, both of which can experience shocks to the system that reverberate.

As to why this story has caught my eye is that one of my biggest fears is that without a significant amount of rain over the news 2-3 months, Lake Taihu will not only cake over again.. but that the Yangtze itself (at a 150 year low) will be at risk of a similar algae outbreak…. and that would be bad.

What is behind this problem? Add onepart chemical pollution + one part pesticide over application + low water levels… add heat.. and Bang.

What can be done? Well, in the short term (outside of a rain dance), the most effective preventative measures would be focused on reducing the toxic inputs and flushing out the system (i.e. Yangtze pushes crap into the sea), to shut down polluting factories, and investing in large scale filtering machines.

The questions becomes, (1) how effective will flushing the system be if the Yangtze itself sees significant amounts of blooms (there have already been cases this year), and (2) how close is the water level on the Yangtze to where this could happen?

Of course, then the questions become if the blooms are found in Taihu and the Yangtze, what will the impact be to manufacturers (Wuxi saw shutdowns last year) and the economy as a whole (farmers cannot use green water to grow crops)?

and what will the solutions be? How much will need to be spent?

and where is the silver lining for clean tech producers, and how do you get products into the market?

Food for thought if you are water bug in clean tech, or simply a manufacturer wondering What if, What else, and what are the odds when it comes to China’s water woes

I learned a long time ago, that while Shanghai moves quick you sometimes end up hanging out while people need to make their way across town for appointments. So, wihle waiting for my lunch appointment (I made it early), I caught up on some reading by opening up the CHaINA that is sitting on my desk.

By far China’s best english language logistics publication, I was happy to see that I not only made the front cover, but that my post last month entitled Factory Closing: Why Is Anyone Shocked? This Was Coming was highlighted in the blog section.

Mug shot of me, and a reposted All Roads article aside, this magazine is a must for anyone looking to learn more about cold chain (particularly those interested in the Olympic food chain) . There are also a number of interesting articles on the logistics of flowers from Yunnan (written by Chris at Go Kunming), and a large news roundup section as well.

to access the new (and fantastically slick) web version go here, and honestly (this is my inner treehugger talking) you do not need to print this or ask for printed copy anymore. Their web version is more than enough.

Last week I posted a piece on a looming energy crisis in China entitled Why China’s Recent Drought Matters to YOU.  Didn’t get any comments, but a few people I have spoken to have played the threat of any economic impact down.

Well, if the fact that China is now  recalling ships as part of a national coal transport drive, then perhaps you’ll consider the fact that Coal shortages, transport problems cause power gaps and that the recent diesel shortages have made the problems severe enough for the central party to

issue an “urgent notice” on Wednesday to the country’s power generators, coal companies and railways to address an electricity shortage that has led to rationing in more than a third of China’s provinces in recent weeks.

and the problems will only get worse.

Perhaps I am overreacting a bit, but in the off chance I am right and the power starts rolling in and out, what would the impact be?

Sure, there are summer blackouts, but has anyone put together a plan to deal with a rolling blackout  that lasts through the spring and summer (assume drought conditions continue)?

On a wider sustainability issue, I there is a great article  The future: China changes the whole world where we the following paragraph will give you a sense of the amount of resources required to power China’s engine.

By 2006, China already consumed 32 per cent of the world’s steel, 25 per cent of the world’s aluminium, 23 per cent of the world’s copper, 30 per cent of the world’s zinc and 18 per cent of the world’s nickel.

To date, the second tier cities have yet to really achieve the same growth as the coastal cities, so a few more questions.

How much longer can China continue to grow and drive material prices up before a slowdown occurs?  After all, at 11.4%, China’s economy posts biggest rise in 13 years

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In the midst of my Yantgze report, I came across several articles that show just how exposed to the elements trade along the Yangtze is. Historically cycling between the two extremes of flood and drought, the Yangtze river level can fluctuate quite a bit. However, after a drought in the middle of the country, ships have begun to get stuck.

Yangtze River most thirsty in 50 years from CCTV and Riverbed Surfaces in Yangtze Wuhan Section from China Digital Times provide the details

The level of the Yangtze section in East China’s Anhui Province, has dropped from 9 meters to 1.3 meters and continues to fall by 3 centimeters a day.

This is the year that Wuhan’s Yangtze water level hit its historical low, 14.05 meters.

Nearly 20% of the river islands (sand bars) are new in the past five years.

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Just saw this come off my Reuters RSS Stretch of China’s Yangtze river caves in, where it looks like a few hundred meters of the shore decided to decouple itself and move a few warehouses into the water. Cranes too.

Xinhua cited a local official as saying the collapse could have been caused by a vortex of water. It said others believed construction at a nearby shipyard might have loosened the foundations of a dyke and caused the collapse

Recently a hot topic of debate due to the controversy surrounding the landslides near the three gorges damn, there has also been increased dredging activity going on as well.

For sure China’s most important river, the Yangtze has a lot of potential to become the centerpiece of harmonious society… but with a number of landslides, silt build ups, bridges, and seasonal water level changes… it is clear that operators have a number of things to worry about before they can think of increasing container traffic.

In any developing economy, there is a feeling that one must take advantage of any opportunity. for China’s part money has flowed into nearly ever sector of the economy from domestic and foreign investors..

From a manufacturing perspective, the same mentality also exists. Manufacturers will cut to the bone to get business, and there are some firms who have done very well through this system in knocking down costs.

When I read the Cargonews Story (free subscription) Mainland ports take off the gloves and focus on integration I was not surprised to learn that the ports themselves have also been agressively pricing and attracting business from neighboring ports.

The bruising rivalry between ports in the Yangtze River Delta - most notably that between Shanghai and Ningbo - is over, and the focus is now on integration and quality rather than boosting box numbers.

It is something that is prevalent in the trucking, warehousing, and other areas of logistics, however as few manufacturers or traders operate at this level it is a problem that many would not see DIRECTLY on a regular basis.

I say directly, because there are tons of indirect costs that result, and some of these costs are why we see logistics account for 20% of GDP in China vs. less than 10% for US/ EU.

Through our recent research on the Yangtze, we ran into a lot of cases where Shanghai port had investments in upstream ports, and at first I thought it a bit odd. We were told of the “synergies” being created and how ports were trained by the Shanghai Port officials… which made sense at the time, but apparently that wasn’t the whole story.

“It is quality instead of just quantity that should be the goal of Shanghai. It’s high time for Shanghai and other delta ports to improve their software environment and ocean services.” Xu Peixing, a Shanghai Port Authority director

He noted Shanghai has injected more than US$134 million in port facilities in Wuhan, Chongqing, Anqing, Yangzhou, Nanjing and Nantong over the past two years and Ningbo  is no longer a staunch rival.

Xu pointed out that Shanghai and Ningbo were jointly investing in the fifth-phase construction of Longtan port in Nanjing.

In the end, this integration and collaboration should have a positive impact on the shipping industry, and that benefit will trickle through to the manufacturing community as well.

The volumes of containers and break bulk items going through the various river and sea ports have been growing at a rapid pace, and that will only continue if everyone looks to the long term and works together.

Following up on yesterday’s post and two of the posts I wrote a few months back on the issues that face shippers on the Yangtze, low bridges and silt, comes the Xinhua article Dredgers used early on Yangtze as silt problem worsens

With such an important role in the development of inner China, the Yangtze is the most important river in China. If all goes as planned, APL supertankers will be able to carry goods to and from Chongqing, and that wil then allow manufacturers to move further and further inland.

Well… apparently, this year’s drought has show that while it is easier said than done, and that even the best laid plans are sometimes worth little once mother nature weighs in…..

For firms like China Merchants, this will become a problem as boats will be forced to a limited schedule and loads will have to be lighter in the affected areas (see map), and according to the chief of the Wuhan Branch of the Yangtze River Bureau

“Silting is getting more serious in the middle reaches of the Yangtze so we started to organize silt dredging last Wednesday, which is much earlier than in previous years,”

For China, the development of logistics has been a focus of planners for a long time, and they have devoted a lot of resources to developing rail, road, air, and water modes. For rail and water based transportation though, the development has been particularly difficult, and we can clearly see through this report that there are still some things the planners can’t plan for.