ACCORDING to the Ministry of Land and Resources 61.5 per cent of China's groundwater is too dangerous even to touch.
That means along with being unsuitable for agriculture or drinking this water is unfit for any human contact. As a single figure it starkly highlights the environmental cost of China's rapid industrialisation over the last two decades, but also tells of Beijing's strategic vulnerabilities.
If this is to be the century of water and food security, then China is at a huge disadvantage. And this disadvantage is not just confined to agriculture and the country's ability to feed itself. China's water problems are now so severe they will begin to shape global energy markets and should influence Australia's trade policy and even defence posture.
This might sound like a stretch, but consider where China finds itself in the middle of 2015. Not only is it in reliant on imported oil, natural gas and iron ore to power its economy, but its water problems mean it must increasingly look overseas for food supplies.
This reliance on imports led Geoff Raby, Australia's former ambassador to Beijing, to label China a "constrained super power" and by extension a far less threatening actor in the region.
Defence chiefs and China's hawks would be well advised to inform themselves on this alternate view, which suggests China's need for imports will provide a natural hand break on its territorial ambitions, as trade sanctions would devastate the economy. Consider the situation with pork, the country's number one source of protein and a possible early casualty from its lack of water. China is largely self-sufficient in this area, but supply is under threat due to water shortages across the North China Plain, the country's main food bowl.
China Water Risk, a not-for-profit group, believes this region will need to pipe expensive water from the south unless it completely abandons pork production. In reality such dramatic action is unlikely, but that does not preclude a gradual move towards imports. In a few short years this would dramatically change the dynamics for the global pork industry, potentially opening up big markets for Canadian, European and Australian producers, which have struggled with low prices for years. China becoming a major pork importer would also echo across the entire agricultural sector, as it would likely drive up grain prices, the main feedstock used for fattening pigs. That in turn would likely push up prices for beef, chicken and eggs - a good outcome for farmers but a politically sensitive issue.
On the energy front, coal-fired power stations are significant water consumers, which could quicken China's switch to gas, wind and some forms of solar. The roll-out of nuclear energy to China's interior could also be constrained, as these reactors would rely on fresh water for cooling.
Then comes the broader cost to the Chinese economy. At the most basic level the contamination of China's groundwater will require a huge clean up effort, which will divert resources away from other areas. The dean of environment studies at Renmin University in Beijing, Ma Jong, said the total bill could run beyond 5 trillion yuan ($1.04 trillion). That's five times more than his estimates for cleaning up air pollution across the country.
This should provide opportunities for Australian firms, who have decades of experience in not only cleaning up contaminated waters sources, but using water more efficiently.
China does not have a lack of water, but a lack of water in the right place. According to the China Economic Review, 11 provinces and municipalities including Beijing have water resources below the World Bank's poverty mark. To make matters worse these areas are home to some 510 million people and include four of China's five top agricultural provinces.
Putting these factors together suggests global policymakers need to view China not just as an importer of energy and minerals resources, but as an emerging importer of water, via soft commodities.
