On World Water Day, 22 March, Barclays partnered with Tsinghua University, one of the world’s top engineering education and research institutions, to host the Barclays-Tsinghua University China Water Summit in Beijing.
The Summit brought together over 100 Chinese and global industry leaders, corporations, investors, Tsinghua University academics, and environmental groups to discuss this important topic. In China, recent moves to prioritise and protect ecology, high-grade industrial practices, and the introduction of the “Circular Economy” all represent a concerted strategy to address water and environmental challenges.
Panel discussions on innovative financial solutions, China’s transboundary water challenges & more
The conference included panel discussions on innovative financial solutions, China’s transboundary water challenges and opportunities, a discussion with executives from leading Chinese water and industrial technology companies, and an overview of China’s unique water-related risks and goals with Dr. Wang Hao, Director of the China Institute of Water Resources and Hydropower Research (click here for the agenda).
As China’s population grows to 1.5 billion by 2020 and as urbanisation intensifies, there will not be enough conventional water resources to meet demand, as roughly 2/3 of cities face water shortages and over 60% of cities live in flood areas. Public awareness of these challenges is limited, with only 27% of people aware of water shortages, according to Dr. Hao.
Many of China’s central water challenges were discussed at the Summit, in that water resources are not spread evenly and are often not where they need to be for industrial, energy, and agricultural purposes. Roughly 80% of China’s freshwater are located in the south, while nearly 40% of agriculture, 50% of power generation, and almost half of industrial activity is in the north.
China is encouraging private capital to participate in the wastewater investment opportunity…
…it is also welcoming innovative investment initiatives to better organise capital for smaller cities & rural areas
However, there are reasons to be optimistic. The country is aiming to substantially increase unconventional water resources, including reuse and desalination. Total water related spending is expected to be around USD100 billion annually, with over 80% directed towards drinking water and the balance for sewage and wastewater reuse. Further, China is encouraging private capital to participate in the wastewater investment opportunity and courting international partnerships and technology.
Beyond Beijing, Shanghai and the 13 other cities with populations in excess of 10 million people, China is welcoming innovative investment initiatives to better organise capital for smaller cities and rural areas. The World Bank has started facilitating syndicated loans for these smaller areas, allowing them to reach the capital markets and access financing more quickly.
“One of the most salient takeaways… is that these developments & initiatives are taking place with ‘ecological construction’ in mind”
One of the most salient takeaways from the conference is that these developments and initiatives are taking place with “ecological construction” in mind, and with priority for conservation and the environment, as outlined by President Xi Jinping in his address to the 19th Party Congress. This commitment should usher in a wave of “green” and “blue” infrastructure investment that will allow the country to increase unconventional water resources, enhance cities’ flood resiliency, and improve its ecological footprint.
China’s rapid ascension as a global leader in renewable energy provides precedent for the country to realise opportunity out of environmental challenges. We think the same is possible for China in overcoming its water challenges. The strengthening of academic and research institutions is a critical step towards this goal, and the Barclays-Tsinghua University China Water Summit represented an important collaborative effort for this endeavour.
This event in Beijing follows the recent Barclays Water Symposium in New York (in May 2017), and the publication of Barclays’ joint Water Report – “The Water Challenge: Preserving a Global Resource”, on water and energy, by Barclays and the Columbia Water Center (see more here).
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- What ‘Xi’s Thought’ Means For Water - One key message from Xi Jinping at the 19th National Congress was harmony between environment & economic growth, surely this bodes well for water? China Water Risk’s Feng Hu reviews