BEIJING—On a Saturday morning in late August, about a dozen university students, professors, and middle-aged Beijing locals stand by a row of apartments in northwestern Beijing. Once an outskirt of the city known for its natural springs and reed-filled ponds, the area now looks just like another part of the sprawling capital: wide roads lined with set-back buildings, crowded with pedestrians. It’s home to some of China’s best schools, Peking and Tsinghua universities. One member of the group—an environmental society called the Green Earth Volunteers, led by one of China’s most well-known environmentalists, Wang Yongchen—asks a local if he knows how to get to the Wanquan River.

“That’s a river?” the man asks, and offers directions to what he says is a nearby ditch that sometimes puddles. After a few minutes, the Green Earth Volunteers arrive at a narrow canal holding a few centimeters of water. The bed of the Wanquan, which means “ten thousand springs,” is now paved over with concrete, the result of attempts to keep water from soaking into the ground when the canal was full. A pipe, once used to carry water into the small river, lies exposed to the sun, as do patches of dry ground. Ivy creeps along the sides of the canal, as if trying to reach what’s left of the water.

The Wanquan is one of thousands of rivers in China that have dried and disappeared after decades of declining rainfall, prolonged droughts, exploding population growth, industrial expansion, and a series of disastrous reservoirs built during the early days of the Communist Republic. The problem is most obvious in Beijing, which was chosen to be China’s capital in part because of its abundance of streams and freshwater springs. Beijing consumed 3.6 billion cubic meters (127 billion cubic feet or 950 billion gallons) of water in 2012, far more than the 2.1 billion cubic meters per year the city has at its disposal in nearby rivers and in the ground. The city’s water resources, about 120 cubic meters per person a year, are well below the 500 cubic meters the UN deems a situation of “absolute water scarcity.” Beijing has been supplementing the shortfall by diverting water from the nearby province of Hebei and trying to lower water usage in the city.

China has a severe water problem overall. Its resources of freshwater, around 2,000 cubic meters per capita, are one-third of the global average. Coal production, which supplies about three-quarters of China’s energy, already accounts for one-sixth of total water withdrawals. Between now and 2040, China’s total energy demand is expected to more than double, and be twice that of the U.S. The World Bank has put the annual cost of China’s water problems—specifically, water scarcity and the direct impacts of water pollution—at 2.3 percent of GDP but says it is likely much higher. About 45 percent of the country’s GDP comes from water-scarce provinces, according to a 2012 report by HSBC and China Water Risk, a consultancy. About 300 million people in China, almost a quarter of its population, drink contaminated water every day. Former Chinese Premier Wen Jiabao wasn’t being dramatic in 1999 when he called the country’s water problems a threat to the “survival of the Chinese nation.”

But these shortages are unevenly spread. The North Plain, a region home to a quarter of the population, and which includes Beijing, is especially dry. Here, water tables are falling by two to three meters a year, according to the UN, and posing serious risks to agriculture and food security. Of China’s 22 provinces, 11 were considered “water-stressed,” meaning they have less than 1,000 cubic meters of water per person a year, as of 2012. One of the north’s main water sources, the Yellow River, has been shrinking for the past three decades, drying up almost every year before reaching the sea. Hebei province, which neighbors Beijing, has seen 969 of its 1,052 lakes dry up; some of its farmers water their crops with sewage water. Wang Shucheng, a former minister of water resources, predicted that if groundwater extraction in the north continues at current rates, in 15 years there will be none left.

The solution, as Mao Zedong first said in 1952, is to “borrow a little water from the south.” Southern China is home to four-fifths of the country’s water sources, mostly around the Yangtze River Basin. It took another 50 years after Mao’s suggestion for China to start work on it. Finally, on December 10, the first phase of the South-to-North Water Diversion Project (SNWDP), or Nanshuibeidiao, began operating.

The project’s eventual goal is to move 44.8 billion cubic meters of water across the country every year, more than there is in the River Thames. The infrastructure includes some of the longest canals in the world; pipelines that weave underneath riverbeds; a giant aqueduct; and pumping stations powerful enough to fill Olympic-sized pools in minutes. It is the world’s largest water-transfer project, unprecedented both in the volume of water to be transferred and the distance to be traveled—a total of 4,350 kilometers (2,700 miles), about the distance between the two coasts of America. The U.S., Israel, and South Africa are home to long-distance water transfer systems, but none on this scale.

It’s the kind of operation, observers of China say, that would never have a chance somewhere like America. The project requires the coordination of at least 15 provinces—several of them water-rich areas that will have to give up some of their own water. It involves building over hundreds of archeological sites and eventually through religious ones as well. Almost half a million people will have to be relocated. The cost is budgeted at some $60 billion and is likely to exceed that considerably. In the U.S., proposals for large-scale water transfers from the Great Lakes to the west or south of the country have been repeatedly put down. It would seem to be an example of the power of an autocratic central government to enact the kinds of far-reaching national transformations that, in a democracy, get bogged down.

But a closer look reveals that it’s far from certain whether the benefits will outweigh costs: Some describe the project as a “high-risk gamble.” And rather than showing off the power of China’s central government, in many ways the project merely highlights the limitations of the central government’s ability to manage China’s water needs.

The project creates a grid of water highways that criss-cross the country and can be adjusted to send water almost anywhere. That grid—the siheng sanzong, literally the “four horizontals, three verticals”—consists of the Yangtze, Yellow, Huai, and Hai Rivers running west to east, and three routes that run from south to north, each longer than 1,500 kilometers (600 miles) through both natural and man-made canals.

The first branch, the eastern route, has just started transferring water from the Yangtze River in Jiangsu province to the dry cities in Shandong province. A second route will start carrying water from central China to Beijing and other northern cities at some point in 2014. The third, western route may link the Yangtze River to the Yellow River by crossing through the mountainous terrain of Sichuan and Qinghai, at elevation of between 3,000 and 5,000 meters.

Borrowing water from the south isn’t as simple as Mao suggested. The government has so far relocated at least 345,000 people to make way for construction, the largest resettlement for an infrastructure project since at least 1.4 million people were moved for the Three Gorges Dam. Officials say their relocation is a sacrifice for the good of the country, but others argue that the government is overlooking the extent and impact of the forced relocations that are taking place. The diversion project also risks long-term damage to two of China’s most important rivers, along with the communities that depend on them.

About 1,400 kilometers south of Beijing and its dried-up Wanquan River is the ancient town of Xiangyang, best known as the setting for epic battles over control of southern China over 700 years ago. Today, stretches of newly paved highways dotted with half-built high-rise apartment buildings lead to the city of 5 million. Locals brag that their strip of the Han River has some of the best water in the country. Of China’s six levels of water quality, theirs is of the second highest level, crisp and clean enough for drinking—a rarity in a country where as many as 20 percent of rivers are so polluted they’re unsafe to even touch. Over the summer, traffic near the river shore jams around 6 p.m. as people stream to the water for a quick bathe before dinner.

That may change once the central route of the water transfer system opens next year. About 30 percent of the Danjiangkou Reservoir will then go north instead of flowing south toward Xiangyang and into the Yangtze River—the river that supplies water to the diversion project’s eastern route, and eventually the western one as well. Officials say any impact will be minimal, but local environmentalists and researchers dispute that. Worse, some say, is that diverting this much water may permanently hurt two of China’s most important rivers: the Han, the main source of water for about 30 million people, and the Yangtze, which runs through 11 provinces and supports up to 400 million people.

“We’ve resolved a lot of issues and done a lot of research. The negative impacts are so small they almost don’t exist,” says Shen Fengsheng, head engineer of the water project, sitting at a broad wooden table at the SNWDP’s project office in Beijing. When all three routes are completed, he says, the Yangtze will lose only about 5 percent of the 29,400 cubic meters of water it dumps into the ocean every second.

Local governments are building passageways for fish whose routes are disrupted by the canals, supplementary dams to ensure consistent water flow, and wastewater-treatment plants to reduce pollution in water transferred or affected by the central or eastern routes. Officials in charge of managing the diversion from Danjiangkou say they’re making sure a minimum amount of water still flows downstream to cities like Xiangyang. “The water volume overall will be lower, but it will be enough to meet the daily needs of the people,” Zhou Jinhua, general office director at Danjiangkou SNWDP Water Resources Company, which is in charge of the dam for the Danjiangkou Reservoir, toldQuartz.

Locals in Xiangyang, however, say their water will become not only more sparse but also more polluted. Water quality there will fall at least one level when the route begins, according to Yun Jianli, head of Green Hanjiang, a nonprofit environmental group based in Xiangyang. That’s because decreasing water volume weakens a river’s “environmental capacity”—its ability to clear out pollution. Provincial researchers say the quality will go down another level, to the fourth of six, once the central route is at full capacity.

A slower-flowing river is also slower at depositing the sediments along the riverbed needed to form wetlands, which help mitigate pollution and nurture the river’s ecosystem. According to estimates by the Xiangyang municipal government, average water levels in the city’s section of the Han River will fall between 0.51 meters and 0.82 meters once diversion begins. “That water quality level will be worse is a foregone conclusion. The situation for the water environment is grim,” says a provincial report on the impact of the project on the Han River near Xiangyang, which was seen by Quartz.

In part to prepare for the diversion, Xiangyang is transforming itself. Plots of land covered in brick and concrete rubble litter the city as officials tear down paper and chemical factories. These have long been a large part of Xiangyang’s economy; now local officials want to move the economy away from manufacturing to minimize pollution in the Han River, and build up a services sector based on things like tourism. But as part of doing so, they plan to expand the city to three or four times its current size. Given that city dwellers consume about three times as much water as rural residents, according to International Rivers, a U.S.-based environmental group, a bigger Xiangyang will probably guzzle much more water.

To make things worse, both the Han and the Yangtze will end up with less water than even the diversion plan allowed for. The amount of water to be diverted for the central route, for instance, is based on calculations of the Han River’s water flow between the 1950s and the early 1990s. But since then the Han has become less consistent as rising temperatures have made droughts in the south more common. The amount to be diverted, however, hasn’t been adjusted. “It begs the question of why the Chinese government is going to spend all this money to alleviate drinking water shortages in Beijing. Are they more important?” says Kristen McDonald, China program director for Pacific Environment, a California-based nonprofit.

Water levels in the Yangtze have been falling too. In 2012, Chinese researchers found that the amount of water entering the Yangtze from glaciers on the Tibetan plateau had fallen 15 percent over the last four decades. And in 2009, total freshwater reserves in the Yangtze River Basin had fallen 17 percentfrom 2005 levels, according to the China Statistical Yearbook. So cutting 5 percent from the river’s annual runoff is not trivial. Parts of the Yangtze will see much lower flow during the dry months of the year, affecting navigation and the health of the river. Officials say shipping along the Yangtze, which has become something of a “second coastline” for China, won’t be affected—but even now, local governments dig at least once a year to make the riverbed deeper to give ships more room.

A lower water volume could also mean more saltwater from the sea filters into the Yangtze’s estuary. That will impose higher costs on factories along the shore to treat and use salt water. Polluted water in the Yangtze—which officials have called “cancerous”—may also be transferred northward, bringing with it diseases like schistosomiasis (bilharzia), which can damage internal organs and harm children’s brain development. The solutions include installing costly wastewater management systems and, according to officials in Shandong, simply cutting off the flow of dozens of streams that carry factory wastewater into two lakes that function as transfer points for the diverted water. “The project will be useless if these problems aren’t solved,” Chinese environmentalist Yang Yong told Quartz. "You haven’t even solved the old problem and you’ve already created new problems."

Perhaps the most alarming example of how the SNWDP creates new problems is that it has triggered a cascade of unforeseen extra engineering projects. This is because provincial officials, worried that their towns will lose water, are pushing for supplementary dams and water-transfer systems to protect them.

The rivers can ill afford this extra engineering burden. There are already almost 1,000 dams on the Han and its tributaries and hundreds of dams and other hydro-projects on the Yangtze. With China’s goal of tripling hydropower generation, says Ma Jun, director of the Institute of Public and Environmental Affairs, many Chinese rivers simply won’t be flowing in 10 years.

But the real problem is that this creates a circular web of hydro-projects that take water from one river to replenish another—robbing Peter to pay Paul.

For instance, about 17 kilometers south of Xiangyang on the Han River is the Cuijiaying Dam. A metal security fence guards it, with a sign that warns trespassers of intruding on “an area important for the work of national development.” The dam will maintain water levels for the city but slow the river’s flow downstream.  “Usually NGOs are against dams, but this one is good for the local community,” Yun says.

Another diversion route, separate from the SNWDP, is being built to transfer water from the Yangtze to the Han, to help cities downstream of the Danjiangkou Reservoir. In turn, Shaanxi province—a parched region from which the central route will also take water—is building a project to take water out of the Han, to supplement its Wei River and the 13 cities along it that have serious water shortages. Officials are considering another proposal to bring water from the Three Gorges Reservoir, on the Yangtze River, to the Danjiangkou Reservoir. The Yangtze already has 353 dams, making it the world’s second-most engineered water basin, according to data from International Rivers. There are already 14 dams on the Han River, and another 18 on a main tributary, according to the group.

Officials say they can resolve any unforeseen environmental impacts after the system begins operating, in much the same way that problems caused by the Three Gorges Dam project are being addressed now. That’s not very comforting, given that the Three Gorges project has caused, in the words of China’s State Council, “urgent problems” including thousands of earthquakes and landslides, and tens of thousands of extra people needing relocation. Earlier this month, China’s anti-graft body accused officials who helped run the dam project of corruption, including taking bribes and influencing the bidding process for projects.

Dong Wenhu, former head of the water-resource department in Taizhou in Jiangsu province, near the beginning of the eastern route, tells Quartz, “Yes there are risks. But no, I’m not worried. Why? Because we can just build more.”

For all the social and environmental costs, not even the project’s leaders pretend that it solves China’s water problem. “For now, the transfer project is just compensating an amount. It can’t completely fix the problem,” says Shen, the head engineer of the project. There is dissent even among officials. In February, China’s vice minister of housing and urban rural development, Qiu Baoxing, in a rare public criticism, called the project “difficult to sustain” and unnecessary if cities would only conserve more.

The central route will supply 1.24 billion cubic meters of water a year to Beijing. That won’t cover the city’s annual shortfall of 1.5 billion cubic meters. As the city’s population expands, its water needs will also expand faster than the diversion project can keep up. Water demands in northern China overall—the river basins around the Hai, Yellow, and Huai rivers—will be beyond what the SNWDP can cover at full capacity. The Institute of Water and Hydroelectric Research estimates that total demand in northern China will reach 203 billion cubic meters by 2050, of which the SNWDP will only supply a little over a fourth.

This does bring an economic benefit. By alleviating water shortages, the SNWDP is supposed to add between 0.12 percent to 0.3 percent to annual GDP growth and create up to 600,000 jobs, according to government brochures and a state research center. “If you look at other countries in comparable stages of development and water scarcity, virtually all of them have employed some form or another of water transfer. At one level, I can’t blame China’s economic planners for thinking this is an essential thing to do,” says Scott Moore, a research fellow at the Harvard Belfer Center for Science and International Affairs.

Still, the SNWDP’s project’s costs are rising quickly. Construction material, labor, and added expenses like installing dozens of wastewater-treatment plants are pushing the total bill past the previously earmarked amount of 500 billion yuan (about $60 billion, according to exchange rates in 2002 when construction began).

That figure, for all three routes, was already almost twice as expensive as the Three Gorges Dam. And, Shen tells Quartz, “that number is meaningless now.… In the future, it will be far more than 500 billion.” Costs for the now-completed first phase have almost doubled to 300 billion yuan from the earlier budget of 124 billion yuan, according to Zhang Jiyao, in an interview with Southern Weekend in October.

These spiraling costs mean there’s a risk that the SNWDP could turn into China’s largest white elephant—an unused network of canals and structures across the country. Beijing residents currently pay 4 yuan ($0.66) per cubic meter of water. The diverted water could cost around 10 yuan a cubic meter for residents in Beijing, according to estimates. So far, water from the eastern route costs up to 2.24 yuan per cubic meter for cities, but the final price that residents pay will be higher, government academics say. Residents, factories, and some cities may be unwilling to pay this price, says Jia Shaofeng, a government researcher in water-resource management at the Chinese Academy of Science (CAS).

If the SNWDP doesn’t pay back its own costs, that could be a catastrophe for government finances. About 45 percent of the project is financed by loans from banks. “There could be a great default,” says James Nickum, vice president of the International Water Resources Association, who visited areas slated to be the grounds for the eastern and central route in the 1980s, when officials were still debating the project. “I’m not convinced the project is a good deal economically.”

So why do it? The SNWDP seems to be another example of China’s penchant for massive projects that show off the power of the party. Large water projects are an especial favorite of China’s engineer-dominated leadership. (Eight of the nine members of the previous Politburo’s standing committee were engineers, including former President, Hu Jintao, who was a water engineer.) “It’s an approach that comes from both a Maoist impulse to subjugate nature in the pursuit of economic development, as well as what you’d expect from a government made up of engineers,” says Peter Martin, an analyst of Chinese politics at APCO Worldwide.

But this massive display of power—some might say hubris—is also a sign of weakness. One reason why China’s water crisis is so dire is that the central government hasn’t been able to coordinate national efforts to conserve water. Local environmental bureaus are often weak. Companies fined for breaking pollution rules often ignore the fines or renegotiate them with local officials. Local officials have been loath to raise water prices, despite Beijing’s requests, because of the backlash they might face from residents, or their relationships with local businesses. “Beijing can only get localities to do a certain number of things,” says Kenneth Pomeranz, an environmental historian at the University of Chicago. Water conservation hasn’t traditionally been one of them. “It shows both the strength of the center and its limitations.”

So, while China is pushing other forms of water conservation, from new provincial water usage quotas to initiatives to raise water prices as well as recycle rainwater, the SNWDP is China’s most ambitious effort perhaps because it is the most feasible. Formalized and promoted as a national initiative, the project requires officials to fall in line, at least to some extent. “We had other choices, but construction is easier. You pay. Companies build it,” says Jia, the researcher from CAS. By contrast, when it comes to things like conservation, “The upper leaders have their policy and the local officials have their countermeasures.”

You can see some of those countermeasures on display in Jining, a city in the coastal province of Shandong, where the eastern diversion route passes through. Pharmaceutical company Cathay Biotech is one of dozens of polluting factories that officials promised to move out of the city to clean up a local lake through which the diverted water will flow. A People’s Daily article on the factory in April said that it had closed and moved to a nearby development area in Jin Xiang.

Quartz visited Cathay’s original location in Jining in late August. The complex of buildings was along a row of car manufacturers and other factories. Plumes were wafting upwards from a smokestack. In a half-full parking lot, workers were unloading a truck and one of the workers said the factory was still operating. (The company declined to respond to emailed questions.)

Meanwhile, in Jin Xiang, the plot of land belonging to Cathay Biotech’s new factory was little more than a mound of dirt. Nearby plots of land were similarly empty. Near Cathay’s Jining factory is a small village where the residents say local industry has long polluted their water supply. They don’t expect the SNWDP to change that. One man says, “You can build, but it won’t solve the core problem.”

This article available online at:

http://www.theatlantic.com/international/archive/2014/03/china-has-launched-the-largest-water-pipeline-project-in-history/284300/