Suggested countermeasures to the flow cutoffs include more rational pricing, promoting water conservation, changes in upstream reservoir operating rules and other forms of improved basin-wide operation, importing water from the Yangtze, creating more off-stream storage, and encouraging more conjunctive use of surface and ground water. None of these solutions will be easy. Most depend upon whether China can develop adequate pricing and entitlements systems for surface water that are responsive to changes in natural conditions and the value of alternative uses.
4. Thirsty Cities
Roughly two-thirds of China's 600 cities are considered to be short of water. Just over 100 of these are "seriously" short (data released in 1997). The largest cities are the most affected： 51 of China's 61 cities over 100,000 population were water short in 1990. Regionally, northern China's cities and the rapidly growing coastal cities located in small basins tend to be the most affected.
The primary cause of urban water shortage is that water supply projects have not kept pace with the growth of the cities. This is followed closely by demands exceeding the capacity of the local water sources. Some cities, especially along the lower Yangtze, are water short because of pollution of their water source, primarily because of urban and industrial effluents. These constituted 42%, 38% and 6% of the 109 water-short cities (of 189 total) at the prefectural-level and above in 1990, with the remaining shortages of mixed nature.lO
Water shortages are said to "affect" 230 billion yuan (4.1 trillion yen) of industrial production each year. This is roughly 2% of total output, but could be as much as 5% if it refers only to state-owned enterprises. It is not clear that this kind of figure has much economic meaning as a measure of constraint to development, however. Industrial production has continued to grow rapidly in recent years, even in some of the most affected cities, such as Tianjin, Taiyuan and Beijing.
