Chansheng HE Department of Geography, Western Michigan University, Kalamazoo, Mi 49008, U.S.A
China’s water shortage crisis has affected the daily lives of more than 39 million urban residents in over 300 of 617 large cities and caused annual financial losses of $20 billion in recent years. The Yellow River, the cradle of the Chinese civilization and the second longest river in China, has been experiencing seasonal desiccation of up to 226 days annually in its lower reaches since 1990. The Hai River basin, which contains the Cities of Beijing and Tianjin, faces a water deficit of 20 billion m3 per year. To alleviate the water shortage crisis, China has approved the South Water Northward Diversion Projects to deliver about 50 billion m3 of water from the Yangtze River to the water thirst north. This paper assesses the impacts of the water crisis to China’s economy and environment, and discusses the feasibility of the South Water Northward Diversion Projects in alleviating China’s water shortage problems. The paper suggests that China develop institutional strategies such as conservation, water pricing, and reclamation to manage the increasing water demands. Construction of large water works such as the South Water Northward Diversion Projects should be considered as the last resort in dealing with China’s water shortage problems.