Journal of Environmental Management 86 (2008) 648–659 Rural industries and water pollution in China Mark Wang à , Michael Webber, Brian Finlayson, Jon Barnett School of Social and Environmental Enquiry, The University of Melbourne, Victoria 3010, Australia Received 8 May 2006; received in revised form 7 December 2006; accepted 12 December 2006 Available online 26 February 2007 Abstract Water pollution from small rural industries is a serious problem throughout China. Over half of all river sections monitored for water quality are rated as being unsafe for human contact, and this pollution is estimated to cost several per cent of GDP. While China has some of the toughest environmental protection laws in the world, the implementation of these laws in rural areas is not effective. This paper explains the reasons for this implementation gap. It argues that the factors that have underpinned the economic success of rural industry are precisely the same factors that cause water pollution from rural industry to remain such a serious problem in China. This means that the control of rural water pollution is not simply a technical problem of designing a more appropriate governance system, or finding better policy instruments or more funding. Instead, solutions lie in changes in the model that underpins rural development in China. r 2007 Published by Elsevier Ltd. Keywords: China; Water; Pollution; Rural industry; Transition The house is new, the money is enough, but the water is foul, and life is short. (A popular saying in coastal China, from Schmidt, 2002) 1. Introduction Water supply and quality are fundamental issues in China. A few years ago, the debate about who will feed China emphasised scarcity of farmland and the food crisis (Brown, 1995). Yet the most critical resource in China is not land or food, but water (as Brown later (2001) came to recognise). Not only are per capita water resources limited (Niu and Harris, 1996) and the spatial distribution of water resources extremely uneven, there is also significant waste of water. This waste is related to inefficient irrigation practices, leaking water pipes, and water pollution. Growing municipal and industrial waste discharges, coupled with limited wastewater treatment capacity, are the principal drivers of water pollution. About two-thirds of the total waste discharge into rivers, lakes and the sea derives from industry, and about 80% of that is untreated. Most of the untreated discharge comes from rural industries. Rural industries stand out as one of the most spectacular respondents to China’s 1978 economic reform. They represent a middle ground between private and state ownership and have not developed in any other country on such a large scale and at such a rapid rate. They have become the driving force behind China’s economic growth and a significant engine of China’s transition, with double- digit growth rates since the late 1970s. To a large degree, this growth of rural industry was neither planned nor anticipated (Bruton et al., 2000). However, the environmental cost of China’s rural industrialisation is enormous. Rural industry consumes massive quantities of water and pollutes a large proportion of rural water bodies (Anid and Tschirley, 1998; Wheeler et al., 2000). While a few large rural enterprises have advanced technology and sophisticated wastewater treat- ment facilities, rural enterprises are characterised by their small scale, outmoded technology, obsolete equipment, poor management and heavy consumption of water resources (Qu and Li, 1994). As a result, water pollution is a serious problem wherever there are rural industries. Over 80% of China’s rivers have some degree of contamination (Qi et al., 1999). China’s 2002 State of the ARTICLE IN PRESS www.elsevier.com/locate/jenvman 0301-4797/$ - see front matter r 2007 Published by Elsevier Ltd. doi:10.1016/j.jenvman.2006.12.019 à Corresponding author. Tel./fax: +61 3 9349 4218. E-mail address: myw@unimelb.edu.au (M. Wang).