Can China Reverse Its Groundwater Crisis Before Water Stress Threatens Food and Growth?

China’s groundwater depletion and pollution threaten food security, public health, rural livelihoods and industrial resilience, with about 520 million people exposed to poor-quality groundwater in 2020. ADB calls for stronger regulation, smarter monitoring and pricing, efficient irrigation, wastewater recycling, ecological restoration and innovative financing to secure groundwater for long-term development.

Groundwater is becoming a strategic economic and development challenge for the People's Republic of China (PRC), with declining reserves and worsening pollution threatening food production, public health, industrial activity and climate resilience. An Asian Development Bank (ADB) assessment shows that decades of intensive agricultural pumping, urban growth and industrial pollution have put enormous pressure on underground water resources. The challenge is particularly serious because groundwater is not simply an environmental resource—it supports farms, households, factories, cities and ecosystems.

Falling Water Tables Put Food Security and Rural Economies Under Pressure

China is one of the world's largest groundwater users, withdrawing an estimated 112 cubic kilometres, around 54% of which is used for irrigation. Across Asia and the Pacific, seven of the world's 10 biggest groundwater extractors collectively account for about 60% of global groundwater use.

Pressure is particularly intense in the North China Plain, a major agricultural region. In some areas, annual groundwater extraction exceeds 600 millimetres, while natural recharge remains below 150 millimetres. More than 100 major groundwater depression cones have developed across China, affecting around 150,000 square kilometres. The North China Plain alone contains a depletion zone of roughly 30,000 square kilometres.

The implications for policymakers extend directly to food security. Falling water tables make irrigation more expensive because farmers must pump water from greater depths, increasing energy and production costs. Continued depletion could also leave agricultural communities more exposed to drought and rainfall variability.

Poor Groundwater Quality Creates a Growing Public Health Challenge

Quantity is only one part of the problem. Around 36% of China's population, equivalent to approximately 520 million people, was exposed to Class V, or poor-quality, groundwater in 2020, compared with 17.5% in 2000.

Industrial wastewater affects more than 90% of urban aquifers in industrialized eastern China, while intensive agriculture contributes nitrate contamination. Fertilizer applications can exceed 300 kilograms of nitrogen per hectare in some areas, compared with a global average of about 100 kilograms.

For governments, contaminated groundwater can increase healthcare expenditure, weaken labour productivity and deepen inequalities in water-stressed communities. Smaller cities and rural areas face particular challenges where wastewater and sanitation systems remain inadequate.

The private sector also faces growing exposure. Industries that depend heavily on inexpensive groundwater could encounter tighter extraction limits, higher water charges, stricter discharge standards and greater pollution-control responsibilities.

Shandong Offers a Model for Turning Investment Into Groundwater Recovery

China's experience also demonstrates that groundwater decline can be reversed. The $150 million ADB-supported Shandong Groundwater Protection Project in the water-stressed Weifang-Zibo area combined water-efficient agriculture with ecological restoration, reservoirs, canals, monitoring and stronger institutional capacity.

The project created 1,902 hectares of wetlands, compared with a target of 880 hectares. Annual water supply to the Mata and Judian Lake wetlands increased to 47.9 million cubic metres, nearly four times the 12 million cubic metre target.

It also constructed or rehabilitated 371 kilometres of canals and increased rainwater retention and storage capacity to 31.1 million cubic metres, against a target of 8.3 million cubic metres. Some 603 water-resource management staff were trained compared with an original target of 150.

Groundwater levels subsequently showed measurable recovery in important project areas. For governments and development partners, the lesson is significant: combining conservation, ecological restoration, infrastructure and better governance can deliver stronger results than isolated interventions.

Smarter Finance, Technology and Regulation Could Shape the Next Phase

Scaling these solutions will require substantial investment. China spent nearly CNY1.2 trillion, or about $166.7 billion, on water-resource management in 2023, equivalent to approximately 1% of national GDP that year.

For international development institutions, groundwater management creates opportunities to finance monitoring systems, wastewater treatment, efficient irrigation, wetland restoration and managed aquifer recharge. ADB also sees potential for green bonds and public-private partnerships to complement government spending.

Private companies could find expanding markets in smart meters, sensors, precision irrigation, wastewater recycling and environmental engineering. Industrial water efficiency already demonstrates commercial potential. Textile mills in Zhejiang increased water reuse from 7% to more than 35% within one five-year development cycle.

Future policy should therefore combine stronger regulation with economic incentives. Volumetric pricing and tiered tariffs can discourage excessive pumping, while carefully designed subsidies can protect farmers' incomes. Drip and sprinkler irrigation, wastewater reuse, rainwater harvesting, wetland restoration and aquifer recharge can further reduce pressure.

The larger policy message is that groundwater should be treated as strategic economic infrastructure. Protecting it can strengthen food security, reduce health risks, protect rural livelihoods and improve industrial resilience. For China, the next challenge is to turn successful local interventions into scalable national solutions. For development partners and businesses, that transition presents significant opportunities, but also growing risks for investors and industries that fail to adapt to a future in which water is increasingly scarce, monitored and economically valuable.