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Water management, policies and legislation related to water use in agriculture


The main institutions involved in water resources management are (World Bank, 2009a):

  • the Ministry of Water Resources (MWR): integrated water resource management, water resource protection planning, water function zoning, monitoring water quantity and quality in rivers and lakes; issues water resource extraction permits, proposes water pricing policy;
  • Ministry of Environmental Protection (MEP): water pollution laws, regulations/standards, supervision/enforcement, water environmental function zoning, water pollution mapping in key rivers and lakes, monitors water quality;
  • Ministry of Housing and Urban and Rural Construction (MHURC): urban water supply, urban wastewater treatment;
  • Ministry of Agriculture (MOA): on-farm water management and agricultural non-point pollution;
  • Ministry of Land and Resources (ML&R): water as a resource, land-use planning;
  • State Forest Administration: forests for conserving water sources;
  • Ministry of Transportation: ship transportation water pollution control;
  • National Development and Reform Commission: pollution levy policy, wastewater treatment pricing policy, water pricing policy, industrial policies that affect wastewater discharge and its treatment;
  • Ministry of Finance: Pollution levy proceeds management, manages wastewater treatment charges and water resource fee policy, State Office of Comprehensive Agricultural Development;
  • The State Council: Implementation regulation, administrative regulation and order, lead, and coordination;
  • National People’s Congress: legislation, law, and supervision;
  • Local Water Resources Management Department, responsible for water administration at provincial level. Each province has a Water Resource Bureau responsible for planning, survey, design, construction, operation and management of irrigation, drainage, flood control works, and rural hydro-electricity. Water resources bureaux at the prefecture and county levels are directly responsible for the construction and maintenance of main and secondary canals, associated irrigation and flood control structures, and medium-sized reservoirs. Townships and villages share responsibility for constructing and maintaining branch canals, ancillary works, and small reservoirs;
  • River Basin Management Commissions (RBMC): subordinate organization of the MWR for its seven large river/lake basins (six river basin management commissions and the Lake Tai Basin Management Agency). Responsible for preparing basin-wide water allocation plans and providing technical direction and guidance to local governments within the basin.

Water management

The following developments have taken place over the past years:

Water management: China adopted the integrated water resources management (IWRM) approach, as shown in the amended new Water Law. Water productivity, water pollution protection, demand management, environmental concern are highlighted in policies and mainstreamed into planning and procedures, such as specific water allocation for environmental use. Attention is being given to zoning of water function bodies, formulation of macro water allocations and micro water quotas, basin level resources management to protect the Huang river from drying up, special water diversion projects for ecosystems, and establishment of water-saving societies.

Water development: This has shifted from expansion to improvement. There are limited new water resource development projects, and highest priority is given to improving water use efficiency, productivity and quality.

Water environment: China implemented the largest ecosystem improvement programme in its history, costing US$43 billion, on restoring water bodies from farmland, restoring forestry from cultivation, restoring grazing from farming. Large numbers of small high pollution plants along the rivers have been closed. Also, the largest drinking water improvement programme in China’s history has been implemented, where millions of people now gain access to safe drinking water. The programme has lasted 10 years, with an average annual investment of US$2 billion.

Water system management: China issued new management policy and rules, grouping water infrastructures and management agencies into three categories – public services, semi-public services and commercial services – and implemented different management and financing policies for different systems. Environmental services are recognized and covered by government funds.

Irrigation development: Over ten years, China has implemented large-scale irrigation improvement programmes to improve water-use efficiency and productivity, with an annual investment of around US$2 billion. In the past 10 years, nationwide agricultural water-use efficiency has increased by 10 percent and food production has increased, while the water withdrawal amount has been reduced. The government target is to produce enough food for the 2030 population, while keeping the total water allocation for agriculture within the current scope.

In recent years, water user associations (WUA) have become a very popular form of public participation in water management in rural China. In October 2005, MWR, the National Development Reform Commission (NDRC), and the Ministry of Civil Affairs jointly promulgated the “Guidance for facilitating establishment of farmer water users associations”, specifying principles and procedures for establishing such associations and their role and responsibilities in relation to governmental organizations and water supply enterprises. According to MWR, by mid 2007 water users’ participation in irrigation water management had taken place in 30 provinces/municipalities across China. More than 20 000 organizations of farmer water users, mostly as WUAs, have been established, involving more than 60 million farmers participating in water management on behalf of end-users of water (World Bank, 2009a).

Policies and legislation

China’s Water Law was enacted in 1988 and establishes principles, general guidelines, and technical standards for water resources management. In 2002, the Chinese government amended the Water Law to establish a legal foundation for integrated water resources management and demand management. The amended Water Law enshrines the principles that everybody should have access to safe water, and that water conservation and protection are a priority. It focuses on five areas of water resources management: (i) water allocation, (ii) water rights and water withdrawal permits, (iii) river basin management, (iv) water-use efficiency and conservation, and (v) protecting water resources from pollution. According to this law, all water resources, except those in ponds and reservoirs belonging to rural collectives, are owned by the state and the State Council exercises the right of ownership on behalf of the state. In reality, the State Council has delegated water ownership rights to local governments under the supervision of MWR.

The 1991 Water and Soil Conservation Law recognized the inter-relationship between water resources and soil (land) conditions. The primary purpose of this law is: prevention and control of soil erosion, protection and rational utilization of water and soil resources, mitigation of disasters from floods, droughts and sandstorms, and improvement of the ecological environment and development of production (Wang et al., 1999).

The 1997 Flood Control Law is the first law for the prevention and control of natural disasters,;although there have been previous administrative regulations promulgated under the water and other laws, and thus filled a gap in the water legislation system. The importance of this law is to address the specific nature of causes and remediation measures to be taken to prevent and control floods. The law introduces the important mechanism of designating “planned reserve zones or areas” in which special rules may apply to the use and activities within the area. It further provides specific requirements for the operation of reservoirs and other hydraulic works, for multiple use considerations in river course realignments and lake embankments, and for preparing a flood impact assessment for any projects in flood-prone areas (Wang et al., 1999).

The first Law for Water Pollution Control came into force in 1984. This law soon became inadequate to meet the needs of economic development and environmental protection for several reasons: water pollution continued to increase, the targets of water pollution control changed greatly, and the legal measures for the control of point sources were unable to stop the decline of water quality (Wang et al., 1999). Thus, the Law was amended in 1996. Adopted in 2008, the newly amended version provides more detailed measures for the prevention and control of water pollution from various sources, makes clearer specifications for the responsibilities of different stakeholders, and strengthens the legal liabilities for water pollution (World Bank, 2009a).


In 1985, the Government issued a new rule requiring water charges to be collected according to the cost of water delivery. The water charge has, in principle, been calculated based on the cost of the water supply. The water charge for agriculture is usually lower than that for industry. It is calculated either according to the quantity of water supplied, the beneficial area, or a mixture of basic water charge plus a metered water charge. Where shortages occur, a rational water allocation system is practised and dissuasive charges are applied to extra volumes of water. On average, water charges for irrigation varied between 150 and 300 Yuan/ha (US$18 and 36/ha) in 1995. The average cost for sprinkler irrigation development was 6 000 Yuan/ha (US$720/ha), and that for localized irrigation 18 000 Yuan/ha (US$2 200/ha). Even so, repeated studies have shown that water and sewerage prices in China are still below the requirements for financial cost recovery and take little account of environmental and depletion costs (World Bank, 2009a).

In 2006, the planned total investment of fixed assets in the water sector was 93 270 million Yuan (US$11 680 million) of which 30 840 million Yuan from the Central Government, 44 150 million Yuan from the local governments, 1 160 million Yuan from foreign investments, 11 200 million Yuan from domestic loans, 2 890 million Yuan from enterprises and the private sector, and 3 030 million Yuan from other financial sources. In the total investment plans 93 270 million Yuan, 45 percent, was allocated to flood control, 38 percent to water resources projects (including 8 460 million Yuan invested in the South-to-North water transfer project), 5 percent for soil and water conservation and ecological projects, and 12 percent for hydropower and other special projects (MWR, 2007b).

Outside investments and technology are very important in order for China to cope with its environmental challenges. It is hard to calculate how much external funding China has received for water issues. The World Bank has been active in loans for tackling water shortages. This started as early as the mid 1980s with emphasis on irrigation facilities rehabilitation, modernization, promotion of water saving and water resources management, and water supply and pollution control. For example, it invested US$210 million in 1995 in the Yangtze water resources development programme, US$153 million in 1987 and US$250 million in 1996 in two projects to improve sewerage in Shanghai, and US$100 million in the Guanzhong irrigation improvement project in 1999 (Burke, 2000).


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