China aims to spend $850-billion to improve filthy water supplies over the next decade, but even such huge outlays may do little to reverse damage caused by decades of pollution and overuse in Beijing's push for rapid economic growth.

China is promising to invest the equivalent of $650-billion (U.S.) – equal to its entire stimulus package during the global financial crisis – on rural water projects alone during the 2011-2020 period. What's more, at least $200-billion in additional funds has been earmarked for a variety of cleanup projects nationwide, Reuters has learned after scouring a range of central and local government documents.

That new cash injection will be vital, with rivers and lakes throughout China blighted by algae blooms caused by fertilizer runoff, bubbling chemical spills and untreated sewage discharges. Judging by Beijing's cleanup record so far, however, the final tally could be many times higher.

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Over the five years to 2010, the country spent $112.41-billion on water infrastructure, but much of its water remains undrinkable. The Environment Ministry said 43 per cent of the locations it was monitoring in 2011 contained water that was not even fit for human contact.

"The reason why they have achieved so little even though they have spent so much on pollution treatment is because they have followed the wrong urbanization model – China is still putting too much pressure on local resources," said Zhou Lei, a fellow at Nanjing University who has studied water pollution.

A close look at publicly available documents shows limited environmental ambitions, as Beijing strives to prolong three decades of blistering economic growth and fill the estimated annual water-supply shortfall of 50 billion cubic metres required to feed growing energy and agricultural demand.

At the same time, the government faces growing pressure to address environmental effects of fast growth, as public anger over air pollution that blanketed many northern cities in January has spread to online appeals for Beijing to clean up water supplies as well.

The huge costs suggest that treatment, rather than prevention, remains the preferred solution, with industrial growth paramount and pollution regarded as just another economic opportunity, Prof. Zhou said.

"They always treat environmental degradation as an economic issue. China is even using pollution as a resource, and using the opportunity to treat environmental degradation as a way to accumulate new wealth," he said, referring to business contracts local governments offer to big water-treatment firms.

Costly engineering and technological feats, though unlikely to address the underlying causes of pollution, could at least make more water available, allowing marginal quality improvements without interfering with industrial growth or the country's ambitious and water-intense urbanization plans.

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"Part of this increase in the supply of water will come from removing all 'grade V' [no human contact] water supplies, which is actually useless even for agriculture," said Debra Tan, director at the China Water Risk organization. "Grade IV [industrial use only] is not safe to swim in, but it at least is usable."

Reuters