China's Year of the Snake And Water/Wastewater Cleanup

China's environmental pollution challenges are well known, following a period of extensive economic growth. Yet investment is on its way, which could result in opportunities global water and wastewater companies.

China's environmental pollution challenges are well known, following a period of extensive economic growth. Yet investment is on its way, which could result in opportunities global water and wastewater companies. The twelfth Five Year Plan of the Chinese Central Government, covering the period 2011 to 2015, shows the country environmental challenges more effectively.

China is promising to invest four trillion yuan ($650 billion) on rural water projects alone during the 2011 – 2020 period. To put this into context, this is the same amount as the country's entire stimulus package during the global financial crisis. A further $200 billion in additional funds has also been set aside for nationwide cleanup projects.

According to Reuters, this cash inject will be vital if the country is to clean up its rivers and lakes blighted by algae blooms caused by "fertilizer run-off, chemical spills and untreated sewage discharges".

The news agency said that despite a $112.4 billion investment on water infrastructure in the five years leading up to 2010, many water sources remain undrinkable. It quoted the environment ministry as saying that 43% of its locations monitored in 2011 contained water "not fit for human contact".

With growing prosperity in China, there is also a rise in the awareness of environmental issues. On many fronts – be it emissions reduction, waste management, securing water supplies or wastewater treatment – the challenges facing China are enormous.

Around 5% of the groundwater reserves in the country are of either poor or very poor quality – according to the Chinese Ministry of Land and Resources. Equally precarious is the situation in surface waters. One of the solutions being put forward to solve the shortage of suitable drinking water is a plan to produce up to 2.6 million cubic meters of drinking water, through desalination of seawater, by the year 2015.

As for sewage treatment plants, there were roughly 3,200 such facilities in China in spring this year; a further 1,300 were under construction, mainly in the smaller cities and rural areas. The total investment demand in this segment is around 53 billion euros by the year 2015.

As the volume of treated sewage rises, so too do the mountains of sewage sludge produced. By the end of the current Five Year Plan, sewage-sludge treatment facilities with a capacity to process 5.18 million metric tons per year should be in operation. The investment demand estimated here is around 7.3 billion euros.

Clearly there is still much work, and investment, needed. The sector is set to benefit from another windfall in investment, following the Chinese government's announcement in September 2012 that it would be making additional funding available for investment in infrastructure.

Against a background of weakening exports, the government sees this initiative also as a way of underpinning economic growth in the People's Republic. As well as new roads and ports, some of the money will be going into the construction of new wastewater treatment plants.

Germany Trade & Invest (GTAI) further estimates that within the next few years the proportion of industrial waste recycled in China is set to rise to 72%, while the target for environmentally compatible treatment of household waste in urban areas is 80%.

- One place where companies can exploit those opportunities in the Chinese market is at IE expo. This "International Trade Fair for Water, Sewage, Refuse, Recycling, Air Pollution Control and Energy Conservation", which takes place from May 13 to 15, 2013, in Shanghai. For more information, please visit: www.ie-expo.com/en.

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