Analysis & Reviews

Audit Yangtze River Economic Belt

Audit! Yangtze River Economic Belt

Report coverIn June 2018, the National Audit Office (NAO) released the first ever audit report on ecological and environmental protection efforts in the Yangtze River Economic Belt (YREB).

The audit in itself shows an unprecedented step towards wedding economic development and environmental protection in a river basin, which is high on President Xi’s wish list. As Liu Feng, an officer at the NAO, told state broadcaster China Central Television, the NAO now “consider issues not only from an economic perspective, but also from an ecological protection and restoration perspective.”

The audit results show both good and bad news. While there is a clear top-down directive to clean up along with progress in improving environmental quality and stronger pollution control capacities, these have not fully trickled down to local government actions.  Fund mismanagement, excessive development and poor water quality are key challenges going forward. Read on for a more detailed summary of the audit report.

The results of this audit report can be read in tandem with China Water Risk’s joint policy brief with the Foreign Economic Cooperation Office of the Ministry of Environmental Protection (MEP-FECO) - “Water-nomics of the Yangtze River Economic Belt: Strategies & recommendations for green development along the river“. Also, check out our other reviews on the YREB here and here, plus with our deep dive into Hunan, a major YREB province, in8 Things You Need To Know About Hunan”.

“…facilitate the development of the Yangtze Economic Belt by promoting well-coordinated environmental conservation and avoiding excessive development”.

President Xi at the 19th National Congress of the Communist Party of China

 

Positive points to note from the audit report:

1.  Action to protect ecology & environment progressing as planned

  • Since 2016, party officials from the 11 YREB provinces have conferred in 152 meetings and drawn up or revised 293 environmental regulations, with 159,900 officials appointed as river chiefs or lake chiefs
  • 665 special inspections have been carried out, uncovering 97,800 illegal cases of logging, waste & wastewater discharge and other environmental violations
  • As a result of the inspections, 4,147 cases (2,635 individuals) were transferred to judicial sanctions

2.  Stronger capacity to prevent & control pollution

  • The wastewater and solid waste treatment capacity of the YREB provinces increased by 8% and 11% in 2016 and 2017 respectively
  • 2,486 small enterprises from 10 polluting industries (papermaking, leathermaking, dyeing, printing, coking, sulphur, arsenic, oil refining, electroplating & fertiliser industries) banned from operation across the YREB, accounting for 99.8% of the earmarked small enterprises
  • Centralised wastewater treatment for 90% of industrial parks above provincial designated sizes

3.  Improved ecological & environmental quality

  • In 2017, emission levels of COD, ammonia nitrogen, sulfur dioxide and nitrogen oxide declined by 3.0%, 4.0%, 9.2% and 4.0% respectively
  • 73.9% of monitored surface water was of good quality (Grade I-III) compared to 73.3% the previous year; while 3% of monitored surface water was of the worst quality (Grade V+) compared to 3.3% the previous year

Positive results range from more river chiefs…

…& 2,486 small enterprises from 10 polluting industries banned from operation across the YREB…

…to reduced emission levels

improved wnviron & ecological quality audit

But there is also bad news:

1.  Rampant development is a problem

  • Excessive small hydro expansion: As of the end of 2017, there were 24,100 small hydro plants in 10 provinces, with two of them barely 100m apart. Small hydro expansion exceeded 12FYP expansion quotas in five provinces and has caused 333 tributaries to run dry
  • Unauthorised development zones: Municipalities in 7 provinces violated national and provincial demarcations and illegitimately established 249 development zones, covering 298,000 hectares. 62 of them overlap with key ecological functioning zones or regions where any development has been explicitly prohibited
  • Overexploitation of water resources: 501 enterprises in 10 provinces found withdrawing water without a permit, and another 60 enterprises withdrawing more than their allotted amount
  • Some polluting enterprises slipping through the net:  Since 2016, 21 newly built or expanding projects in polluting industries like papermaking and petrochemicals failed to undergo environmental impact assessments (EIAs) or capacity replacement checks
  • Lack of supervision in online sales of fish electrocution devices: More than 34,600 cases of illegal fish electrocution in all 11 provinces in the last 4 years

 2.  Poor lake & drinking water quality plus solid waste & wastewater treatment need improvement 

  • Lake water quality & management still below par: The water quality in Dongting Lake, Poyang Lake and 3 other nationally important lakes is still poor at Grade IV or below due to management issues
  • Pollution control measures lacking in development zones:  75 development zones still have not completed EIAs as required by law. Moreover, 106 of these zones have not constructed centralised wastewater treatment facilities and 46 others have subpar wastewater treatment due to deficient pipe networks
  • Wastewater discharge quality needs improvement: As of the end of 2017, 118 municipal wastewater treatment plants located in “sensitive regions” of 9 provinces failed to achieve the Grade A wastewater quality standard required. As a result, 224mn tonnes of wastewater from 6 provinces was discharged into rivers without effective collection or treatment
  • Solid waste treatment overwhelmed:  As of the end of 2017, 9 landfills and incinerators were operating over capacity. Plus, 2.9mn tonnes of leachate from 20 landfills were found to have leaked into urban pipe networks or nearby water bodies
  • Drinking water sources polluted: 56 Grade A drinking water source regions also contain wastewater discharge outlets and aquaculture farms. Furthermore, pollutants  in the drinking water sources of 7 cities and 71 towns in 3 provinces exceeded standards

3.  Mismanagement of funds & below par projects

  • Funds left unused: As of the end of 2017, RMB1.3bn worth of funds earmarked for water pollution prevention and control, desertification control and other environmental projects were found to have been unused for over a year by local financial departments of 8 provinces; with an additional RMB0.8bn unused by project supervision or implementation departments
  • Mismanaged funds: Between Dec 2013 and Jan 2018, 8 local government authorities and affiliated units mismanaged ecological/environmental protection-related funds worth up to RMB25.8mn
  • Late & unsatisfactory environmental projects: 197 pollution prevention & control and ecological restoration projects in 10 provinces failed to complete according to schedule, while 19 such projects were unsatisfactorily completed in 5 provinces

On the flip side, small hydro expansion has exceeded quotas…

…lake & drinking water quality needs improvement…

… & some environmental projects have been late & unsatisfactory

misuesed funds YREB

The NAO has already ordered local authorities to rectify the problems detected in the audit and inform the public about the results of the rectification. It will also conduct follow-up inspections, according to the report.

Already much action has already been taken to fix the problems found. 275 coal-fired boilers (below 10 tonnes) have been eliminated and 9 construction projects in protected drinking water source regions have been removed or stopped. A more detailed investigation into small hydro has also been mandated by the NDRC in June.

Going forward, this basin-wide audit approach could even be applied to other economically important regions

So just like the NAO uncovered local governments falsifying GDP figures earlier this year, we are now seeing the real state of the YREB’s environment and it’s now up to local governments to follow Xi’s vision. Going forward, this basin-wide audit approach could even be applied to other economically important regions like the Greater Bay Area (GBA)  as China moves towards an ecological civilisation.


Further Reading

  • Upper Yangtze: Integrated Water Management & Climate Adaptation - Experts from China & Switzerland introduce their joint project to enhance water management & climate adaptation in the Jinsha River Basin. What lessons have been learned & what is next?
  • 3 Things You Need To Know About Hunan - Hunan connects provinces from the Yangtze’s upper to lower reaches – an important position. Check out 3 key things to know about Hunan as China develops the Yangtze River Economic Belt according to China Water Risk’s CT Low
  • Sharing Rivers: The Lancang-Mekong Case - Using the emergency water release by China to help downstream countries in the Lancang-Mekong River Basin as an example, Tsinghua University’s Prof. Zhao Jianshi explores the benefits of cooperation & the importance of China
  • China’s Renewable Energy Quotas - China is releasing its first ever renewable energy quotas along with Renewable Energy Power Certificates to improve trading; see what these mean for provinces & renewable enterprises with China Water Risk’s Yuanchao Xu
  • Financing Green Infrastructure In The GBA: Key Takeaways - The Greater Bay Area accounts for 12% of China’s GDP but climate change means this is at risk. How can green finance help? China Water Risk’s Dharisha Mirando shares key takeaways from the HKUST conference
  • 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
  • Green Development For A Beautiful China - The Minister of Environmental Protection Ganjie Li outlined the MEP’s achievements and future plans at the 19th People’s Congress. What are the key takeaways? China Water Risk’s Yuanchao Xu reviews
  • Water-nomics: Trade-offs Along The Yangtze – With significant economic, water use and pollution disparities along the Yangtze River, China Water Risk & the Foreign Economic Cooperation Office of the Ministry of Environmental Protection, publish a joint brief to explore strategies to find the right development mix. Check out some of the key findings in this review
  • Yangtze Flows: Pollution & Heavy Metals: Areas along the Yangtze River dominate Chinese production but at what cost? With Grade V water in its tributaries, rapid growth in upstream wastewater plus concerns over a disproportionately large share of the nation’s heavy metals discharge, can the Yangtze River Economic Belt still flourish? CWR’s Hu takes a closer look
  • 2017 State Of Ecology & Environment Report Review - Prioritising rivers appears to have paid off but overall groundwater and Key Lakes & Reservoirs both worsened. Are we now seeing the “real” state of China’s environment? Find out in China Water Risk’s review of the 2017 State Of Ecology & Environment Report
Woody Chan

About Woody Chan

Born in Hong Kong, Woody graduated from the University of Cambridge in June 2016 with a BA in Geography. His travels across Eurasia pointed him towards the nexus between environmental risk and global business. In particular, he is concerned with the extent and effects of wastewater discharge in China – the topic of his dissertation. At China Water Risk, Woody undertakes multiple research streams ranging from water stress in the HKH region to water issues in China’s mining and data centre industries. Moreover, he assists in the publication of the monthly newsletter and will be responsible for future updating and revamping of China Water Risk’s website. Also proficient at GIS mapping, he hopes to embark on a career which helps tackle climate change from a business and financial perspective.

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