Over the past two years, China has experienced two prolonged dry spells and frequent flooding. In 2010, droughts and floods together cost the country roughly US$22.5 billion. In June 2011, flooding in eastern and southern China killed 175 people and displaced 1.6 million, resulting in more than US$5 billion in damages and a 20% reduction in vegetable output. Meanwhile, five million hectares of farmland in western China suffered the worst drought in 50 years.
In addition, the country’s rapid industrialization and urbanization have taken a toll on water quality. In one of China’s leading economic centers, Chongqing, which sits on the banks of the Yangtze River, local officials estimate that dealing with the effects of chronic water pollution on local agriculture and public health will ultimately cost as much as 4.3% of the city’s gross annual product. Large-scale pollution events are increasingly common in China: In June 2011, carbolic acid spilled into a river that supplies drinking water to Hangzhou, knocking out supplies to more than half a million people in the suburbs and creating a run on bottled water in this city of 9 million. One month later, a manganese spill from a local plant left four million people in Sichuan Province without drinking water for over a week.