China must overhaul its water management systems to provide better legal protection and more open competition for the increasingly scare resource, the World Bank said Monday.
"For years, water shortages, pollution, and flooding have constrained growth and affected public health and welfare in many parts of China," the bank said in its report titled Addressing China's Water Scarcity, reported dpa.
The report urged China's ruling Communist Party to improve the organizational structure and legal framework of its water management systems, including greater use of "market-based instruments such as water rights, pricing and eco-compensation mechanisms."
It said rising demand, population growth and urbanization are likely to worsen China's water scarcity and push it into the group of "water stressed" countries.
"There is no doubt that China is facing a major challenge in managing its scarce water resources to sustain economic growth in the years ahead," David Dollar, the bank's China country director, said in a statement.
But Dollar said there were "grounds for optimism" if China could take "another bold move in reforming the institutional and policy framework" for water resource management.
The bank said China should control its "serious water pollution problem" by using "all available legal, institutional and policy instruments to mobilize the public and motivate polluting sectors to comply with applicable regulations."
"Some of the recommendations, such as the reforms of river basin commissions and the water resource fee management as well as water quality monitoring and disclosure, may not be in line with sectoral or local interests but we believe that they are essential for the nation to effectively address the emerging water scarcity crisis," said Jian Xie, the report's main author.