China is RUNNING OUT OF WATER…

Thursday, January 3, 2008 17:09

China Water crisisAn area that I have been working more and more on is sustainability, and for those of you who are following Crossroads, you will know that water is a HUGE area of concern for me.. and for China.

Well, apparently, while I have been writing there are others who have been discussing the real threat of China’s water problems in the Central Party, and if you believe everything that you read then there is only 22 years left on China’s water supply.

China says water supplies exploited by 2030 written by Chris Bukley reports:

China will have exploited all available water supplies to the limit by 2030, the government has warned, ordering officials to prepare for worse to come as global warming and economic expansion drain lakes and rivers

with that, the state council issued a directive:

“Taking into full account water-saving, by 2030 our country’s water use will reach or approach the total volume of exploitable water resources, and the drought-fighting situation will be increasingly serious.”

Now, what does all this mean? Is China really running out of water? What can be done?

First, while being reeled into the article by its headline, it is important to remember that China has a long history of water problems (drought and flood). It is a massive country, and balancing water is something that has been the focus of many public works projects. There is a real committment to sustainability occurring in many areas, and a lot of money flowing to those looking at solutions.

Second, one of the worst crimes occurring is that in the face of the natural hurdles of China’s water woes is the fact that nearly 70% of all water is highly contaminated, undrinkable, and in many cases not even fit for industrial use. Looking at the cleanup of Wuxi, the recent public dialoges in Xiamen, and the public commitment to the healthy channels dialog and NGO provide, I expect that we will see increased enforcement in the areas of environment

Third, one of the things that has aided China until this point is that low per capita consumption of water. Surely this will change as more people move to the city, however in thinking about the opportunity side of this equation I canot help but look at how rural use of water can be improved on the agricultural side of the equation

Fourth, with water being a critical component of agriculture, industry, and consumerism, the inflation question rears it ugly head once again. Inflationary pressure has already hit energy and food, so if water became scarce it would surely impact consumer and industrial sectors.

Finally, while the picture is without a doubt dire and serious, I have met with a number of people from the NGO and corporate community who are active in the areas surrounding sustainability and solutions are being studied. Whether it is through the NRDC, WWF, VEOLIA, or GE , there are groups who have their top people looking at this and investing in the development of solutions.

So, what do you think? Is China going to run out of water? will they up proactive enforcement of environmental issues? which companies/ technologies will provide the best hope, and what are their stock symbols?

Both comments and pings are currently closed.

31 Responses to “China is RUNNING OUT OF WATER…”

  1. Josh in the UK says:

    January 4th, 2008 at 8:42 am

    I think China is too focused on economic development over environmental. However like CFC’s and Ozone they may well be inclined to do something soon, if the article really speak the truth about a 2030 date. The irony of it was shown in this paragraph:

    With winter crops in southern China already hit by drought, the paper said, “we must take this seriously and avoid setting hidden perils for next year’s agricultural production growth, especially cereals.”

    Contradicting officials’ recent assurances that increased farm production next year was likely to dampen inflation, the People’s Daily said extended drought in the south could drive down crop yields and drive up food prices.

    As noted though, China has a vast sum of foreign currency from their awkward trade surplus. This could fund some buying of food from abroad.

  2. Rich says:

    January 4th, 2008 at 12:22 pm

    Hi Josh,

    That is an irony well taken. From an external perspective, it is really easy to look at the bad news, which is why I tried to highlight some of the good. the last 6 months have seen a quantum leap in awareness, and as I recently posted, the Xiamen hearings gave me some hope that there is changing at the core level.

    R

  3. Falen says:

    January 5th, 2008 at 2:55 am

    A dire problem but not exactly news and nobody is more aware of the problem than the people that matter the most, the CCP. That’s why there’s the north-south water project which is projected to cost 60 billion and probably takes decades to complete.

  4. Charles Frith says:

    January 5th, 2008 at 10:26 pm

    There’s nothing like a sense of urgency to prompt a quicker response.

  5. Rich says:

    January 5th, 2008 at 11:30 pm

    Falen,

    Very true. The CCP is well aware of this, and has allocated a lot of time and money to the problems. Now, with the laobaixing waking up, and the support of NGOs, I am hopeful that a healthy reporting system will strengthen efforts.

    With all that said, I would like to hear more about what companies are developing water technologies. I highlighted a few, but I am sure there are Chinese firms that are turning coffee into tap water.

    R

  6. Rich says:

    January 5th, 2008 at 11:32 pm

    Charles,

    Let’s just hope that the sense of urgency is being felt now when things can be more readily planned for.

    R

  7. Jay Boyle says:

    January 7th, 2008 at 6:56 am

    This north south water project is NOT the answer. The answer is microdrip irrigation and other dry farming techniques. Most of them invented in the US but perfected by Israel.

    Modern China needs to take a page from the great philosopher Laozi and stop working against Nature and start to work with it instead.

    Jay

  8. Rich says:

    January 7th, 2008 at 7:59 am

    Jay,

    Thanks for the introduction to microdrip (reminds me of a coffee maker). Know any companies involved? Is this a technology being used/ sold in China?

    As for your second statement, I am pretty sure that if nothing is done, China will need to look at dry farming techniques.

    R

  9. Jay Boyle says:

    January 8th, 2008 at 12:41 am

    Netafim is the world leader and they are here.

    Back in the 90’s when I was operating a telecom plastic pipe business we looked at doings some micro-drip for another Israeli firm. They decided not to do it at the time because their competitors that were already set up could not protect their IP.

    Jay

  10. Jay Boyle says:

    January 8th, 2008 at 12:43 am

    As a side note check out the book a Pillar of Sand by Sandra Postel

  11. Rich says:

    January 9th, 2008 at 2:38 am

    Thanks Jay.

    As if not having water were not enough, here is some more bad news. Apparently, some of the bottled water we are drinking is not as advertised either.

    Water Worries

  12. Easy says:

    January 13th, 2008 at 6:08 am

    ONMC is the symbol, but the symbol may change in the next week or two. The company name is Aquagold, it has a $500MM contract with China for bottled water. Very undervalued right now.

    http://www.aquagoldinternational.com

  13. BtypeO says:

    January 25th, 2008 at 9:01 pm

    I feel that Aquagold International is a blessing to China in that they have recently begun exportation of high quality bottled water into China. People don’t realize how big of a problem the China water situation is. I mean c’mon lets face it, in 30 years China will be the super power in the world. Look at their economy, it’s booming. I for one, commend them in their success as a country, but it would surely be a shame to see something as simple as quality drinking water stop this wonderful country from attaining their goals! I hope more people take notice of AquaGold International, I think that this company may be able to make a huge difference in the near future for the Chinese.

  14. Rich says:

    January 26th, 2008 at 1:37 am

    BtypeO,

    Glad to see a new addition in the comment community,but how is exporting bottled water from Canada to China something that will really help China?

    Besdies the fact that bottled water is perhaps one of the biggest examples of waste, I am not sure where the real benefit of Aquagold is in the long term to China.

    Maybe I am missing something, but are they developing technology that will clean up China’s water? Are they solving the fundamental issues of China’s water problems?

    R

  15. Christina Jelee says:

    January 27th, 2008 at 8:51 pm

    These aquagold supporters are just pushing a pump n dump pinksheets scam. They do not care about China one bit. Besides the fact that importing water from one of the more expensive countries in the world to one of the cheaper is plain out catering to the rich and helps nobody at all.

  16. Rich says:

    January 27th, 2008 at 11:08 pm

    Christina,

    I am not going to wholly disagree since I am not really sure if this is just some “China play” or if they are really bringing some new technology.

    If it is just simply exporting water to China, I am sure that they will find themselves having a tough time. there are a dozen well established brands in China and there really isn’t much room. Perhaps a few investors would fall for it, and maybe the “china plan” is still worth some value, but I would stay away from this firm as an investment if its entire “plan” is to melt glaciers and export them to China…

    R

  17. John says:

    January 29th, 2008 at 9:25 am

    The Aquagold bottled water venture to China has been at works for the last 3 years or so. It is not as simple to export ANY product to China. All certifications and registration must be met and before you can even do that, a “distributor” must be established which they did and it is very good since that’s the most difficult process.

    After all that, it will still be up to the Chinese consumer to decide if Aquagold water brand will be a success, taking into consideration the shelf price of the water coming all the way from Canada, marketing expenses, distributor and retailer’s profit in between .

    Going against established local and import household bottled water brand names is also a big challenge. Even I’m willing to pay 50 cents more for Aquafina just because I know Pepsi produce them.

    I agree with Christina, China is a good market, very good market if you’re in it already, but very hard to get into.

  18. Rich says:

    January 29th, 2008 at 9:51 am

    Hi John,

    I think you were agreeing with me on that last point as Christina was basically calling the company out as a scam.

    I would agree with you on all those points, but would again ask what else they are bringing to the table on this…. because if all they are doing is selling water into China, then I do not see them as a solution to China’s water problem. That is particularly true since they are probably not targeted to the low end of the market here.

    That being said, you seem to know this company, so I am curious where they are selling. I have traveled quite a bit in China and have yet to see them. That is not to say they do not exist in the market, that they are dumping/ pumping, or otherwise.. I just have never seen them.

    With regard to finding a distributor. I don’t see that as a big hurdle. Finding one that is good may be, but again.. what is their penetration? Are they making money yet, or are they still paying tuition?

    R

  19. John says:

    January 29th, 2008 at 10:40 am

    Hi R

    From following all the headlines – I’m not so sure if they are actually selling yet. If my memory serves me right, the shipment(s) they’ve done were used to have the water brand, Canadian manufacturer, water analysis and all what’s required to get the China government’s seal of approval, before they can be distributed – but I can be wrong and they DID get the approval. They attended the last trade show in China – if they are already on the shelf, you can almost guarantee it will have a press release so shareholders can/will feel good

    Selling water to China will not solve the potential drought in 20+ they projected. Aquagold is all business. I don’t think I’ve seen any articles about (AquaGold) them being social concious.

    I am and know a lot of companies trying to break into China and India market for bottled water and I have been following Aqua Gold’s story since 3 years ago or so, to see how far they can go. I personally dealt with a couple of individuals from North America with Chinese Distributor “contact” but in doing my own diligence, the “distributor’s” business address seemed to be questionable – but I didn’t really have any resources to verify their legitimacy, so I can’t really say if they real or not but almost a year later, our contact from North America disappeared.

    At least for Aqua Gold, they appeared to be working with a legitimate distributor, which is good so if they will donate part of their profit to help solve China’s water crisis, that will be great. I’m sure a portion of $500M which they projected in sales, can go a long way

  20. georges says:

    February 6th, 2008 at 2:40 pm

    I love China. I stayed there several years. But I am a little pessimistic about China future. The population is too big. They have not enought food, not enough water, not enough oil. They need to import but other countries are more and more reluctant. We must not forget than some 20/ 30 years ago, Chinese people were dying of hunger! What really changed since then? Nothing! They are just growing more food while pumping water from underground, using technologies etc. Technology can not work miracle. For example, I see articles about sea water treatment… but do you know that to do this kills has terrible impact as well. Not to mention the oil necessary. Ultimately we all depend on limited natural resources (Chinese, European, American…). But in China they are already too far gone. I fear that people will just die. The good point is the Chinese government knows this is coming and they think about this. Also this is a lesson for the whole world: live simple lives + limit our uses, wastes + limit our population.

  21. Lang says:

    April 12th, 2008 at 5:36 pm

    Apr 4, 2008 — AQUAGOLD International, Inc. (Other OTC:AQUI.PK – News) today is proud to announce that China’s largest supermarket chain and largest “fast-moving” consumer goods chain, LIANHUA Supermarket Holdings Co., Ltd. (www.lhok.com.cn), has been introduced into AQUAGOLD’s products network of sales.

    Can someone in China confirm on this?

    Thanks in advance.

  22. CaptLuvStar says:

    May 5th, 2008 at 6:39 pm

    Aquagold has never claimed to be a solution to China’s water problems. In addition, there are NOT many established brands of water being sold in China…the market is open and there is plenty of room for growth for AQUI. Anyone who believes otherwise has clearly not done their research here.

  23. Rich says:

    May 5th, 2008 at 8:25 pm

    CaptLuvStar,

    You are right, it is a fragmented market, but there are a number of well established brands from Wahaha, Nongfu, Coke, Evian, and others.

    If you feel that their model of bottling glaciers in Canada and shipping them to China is a good market, then I suggest you invest in the company.

    But in my opinion, Evian already has the luxury water market pretty well locked down, and since I have not seen Aquagold in a single hotel, restaurant, or bar in town I will remain skeptical

    R

  24. Bigtallman_9 says:

    June 7th, 2008 at 10:11 pm

    Hi,
    Can anyone in china confirm this AQUIGOLD company. Ads are said to be run on TV setups in all LIANHUA Supermarkets sometime this June/July 2008, while the company is also gonna have Big Screen on the streets of Beijing and Shanghai during their product launch………about the same time.

    Curious as hell.

    Thanks in advance.

  25. Rich says:

    June 8th, 2008 at 6:16 am

    Bigtall.

    Ads running in Lianhua, and big screen debuts in June/ July… again, I very skeptical. I have not seen a single bottle in China, and given they are high quality/ low volume, this would not even begin to make sense for them.

    then again, I am not in PR or in pump/ dump investments, so perhaps there is a reason to do something so splashy.

    R

  26. Bigtallman_9 says:

    June 8th, 2008 at 11:39 am

    Thanks Rich,
    Skeptical here too ……………..i take it yr in China. A lot of hype around this company………………i wonder why. As per the all the pumps…………..aquigold water is gonna be shipped to China after the launch and will then be available in all Lianhua stores. They have a $118 million contract with Wolong group and Lianhua is the said sale point.
    In reply to yr post earlier………….this is just business for the company……….supply of Canadian spring water to China rather than distilled tap water by companies like Pepsi, Coke etc. No help to the china water problem and to its people…..jus a premium spring water Co for the rich who can afford it.

    Lokk forward to further post

    Thanks for the info.

  27. Wayne_n_AZ says:

    August 27th, 2008 at 12:41 pm

    It is now 8-27 and the Olympics are over… Aqua was to be a supplier of h20 at the games… havent heard a thing… furthermore the stock has taken a nose dive… i feel that I have been scamed.. (and many of my friends that have invested in AQUI) we have all lost 10’s of thousands… anyone have any information on this company ??

  28. All Roads Lead To China | H2O Report says:

    September 8th, 2009 at 8:23 pm

    […] the original here: All Roads Lead To China China, chinese, company, crossroads, invest-in-china, investment, january-5th, logistics, […]

  29. Anders says:

    September 9th, 2009 at 7:49 am

    One place of extreme importance is the western part of Southwestern China which is the origin of Chinas rivers. This area is mentioned in the tech program of 2006 as strategic area which regards to water supply (so the CCP knows). To make a real due diligence on the Chinese water supply it would require scientificly based observations of the area and how it responds to a climate change. If the himalayas would be affected in any way, then is not just increased consumption that is the problem but also a decrease in the water supply. I think that this is a important variable in the water equation.

  30. John says:

    March 8th, 2010 at 8:53 pm

    What about desalination of ocean water? Is that really less feasible than a giant south-north pipeline?

  31. Nancy says:

    March 16th, 2010 at 3:37 am

    That’s what they’re doing in Cyprus as well, desalinization of the ocean water. For the last 2 years this island had a strong water restriction imposed on it. Only now, this winter the restrictions have been somewhat lifted. It was quite bad actually.
    Nancy