The South-North Water Transfer Project in China

Abstract After nearly half a century of planning, the construction of the controversial south-tonorth water transfer (SNWT) project in China was officially launched just before the end of 2002. This paper looks into the decision-making process of the project in the context of the country's transition from a centrally-planned economy to a market economy, rapid economic development, and severe environmental degradation. Uncertainties concerning future water demand in individual sectors are examined with reference to the latest projection prior to the launch of the project. Adjustment of project objectives and shift of the focal issues concerned over the years are elaborated. The analysis suggests a high degree of uncertainty in future water demand. The expansion of project objectives to include ecosystem recovery in the late 1990s, however, provided a decisive argument for implementing the project as no other alternative was considered available to meet the estimated ecosystem water requirement. Consequently, remaining doubts on the need for the project and concerns on adverse environmental impacts have tended to be sidelined. With the implementation of the project, the government is caught in a dilemma of keeping water prices low to substantiate the economic needs and improving water use efficiency to honor the environmental objective of the project.