Genevieve Donnellon-May | Climate Change Fellow
Water, essential for life and socio-economic development, holds a special significance in China. It is said that the unique hydrological conditions within China led to the creation of three historical miracles: China, Chinese civilisation, and the Chinese people. Chinese rulers have long acknowledged the importance of water as a weapon in ancient and modern times, as well as the role of water in maintaining social stability and ensuring the political reign of rulers. This can be dated back to over 4000 years ago when Yu the Great of the Xia Dynasty is said to have tamed the Yellow River, and has been seen more recently during the 20th century when Chairman Mao Zedong swam in the Yangtze in a show of power.
Currently, China faces enormous unequal water distribution concerns; the densely populated north suffers from acute water shortages whereas the south is prone to severe floods. Due to various factors – rapid industrialisation, urbanisation, population growth, competing water uses – demand for fresh water is quickly increasing. Forecasts project that by 2030, China’s water demand will surpass 800 billion cubic metres. However, the country’s water supply is severely undermined by worsening interlinked factors of water scarcity, urbanisation, population growth, pollution, and competing water demands.
Further complicating matters, China’s previous main policy adjustments and traditional engineering-focused approach to the country’s water issues are now facing new threats. As China faces severe climate change impacts due to global warming, water is one of the most vulnerable sectors. It will be hit the hardest by the growing frequency and intensity of climate change-induced extreme weather events, costing over US $47 billion annually. Indeed, estimates suggest that 1 per cent of China’s gross domestic product (GDP) is ‘lost’ annually due to flooding impact, causing damage to agricultural production, infrastructure, and human lives. At the same time, over 650 Chinese cities are subject to urban flood risks. For instance, in July 2021, Henan province faced a ‘one in a thousand years’ flood resulting in nearly 400 deaths and US $12.7 billion in property damage. In 2020, the water levels in southern China, a region already prone to flooding, became ‘dangerously high’; 443 rivers throughout the country flooded, of which 33 rivers rose to the highest levels on record. An estimated 38 million people across 27 provinces were affected by the flooding.
One means by which China is seeking to mitigate the damage of urban floods is through the ‘sponge city’ initiative. In contrast to the traditional engineering-focused water management approach, Beijing has demonstrated interest in “green” solutions – such as constructed wetlands and permeable pavements – through the concept of sponge cities. Seeking to harness the benefits of nature-based solutions, the sponge city approach brings together “blue systems” (e.g. rivers, canals, ponds) and “green spaces”, such as wetlands, as part of “grey” infrastructure. The overarching aim is to create Chinese eco-cities to support the local urban water cycle and reduce flooding, water scarcity and water pollution, as well as strengthen local urban resilience, especially against the growing frequency and intensity of climate change-induced extreme weather events.
Since 2014, the sponge city concept has been implemented in 30 major cities, including Shanghai and Beijing. By 2030, the Chinese government aims for 80 per cent of its urban areas to absorb and re-use more than 70 per cent of rainfall. At the same time, this approach contributes to the 2030 United Nations Sustainable Development Goal (UN SDG) 11, which seeks to “make cities and human settlements inclusive, safe, resilient and sustainable”.
However, this approach is not without challenges. The first major challenge is financing. In China, most financing for the sponge city initiative has come from local and central government subsidies and public-private partnership (PPP) funding. In the case of the sponge city pilot programme rolled out in 30 cities, the central government gave each city between RMB 300 million to 500 million to cover the first three years. However, this only made up between 15 and 20 per cent, with the remaining 80-85 per cent of costs covered by PPP and local government. With recent World Bank estimates stating that US $1 trillion of financing is needed, more financing options are required to fill the gap and support the implementation of sponge cities. For lower-income cities, governments could consider investing in preventative measures to reduce the impact of urban flooding. For higher-income cities, additional measures such as creating special project vehicles that can issue dedicated bonds to institutional investors are suitable.
The second key challenge is concerned with the governance system. At present, China’s top-down governance combined with fragmented and competing interests from government departments, provincial governments, and bureaucracies means an absence of coordinated efforts for sponge cities. In addition, overlapping water and land-use policies and property rights at a provincial level which make both the policy formulation and implementation of sponge cities difficult.
Like many other countries worldwide, China faces growing water and water-related challenges, further compounded by climate change-induced urban flooding, which has increased in frequency, duration, and intensity in recent decades. In response to these challenges, Beijing seeks to mitigate the damage caused by urban flooding through the sponge cities concept and may become a world leader in this space. Nonetheless, the Chinese central government and provincial and local governments should undertake additional policy adjustments and provide more financing options to ensure that sponge cities remain sustainable for future use.
Genevieve Donnellon-May is the Climate Change Fellow for Young Australians in International Affairs.