China's Real Liquidity Crunch
Water risks have shifted significantly over the last decade globally and in China. The Global Risks 2013 Report cites income disparity and water supply crises as key risks in China. Given that 45% of China’s GDP is generated in water scarce provinces with water resources similar to the Middle East, a shifting water landscape, be it scarcity, pollution, economic or regulatory will have massive impact for the economy, industry, investors and the population. Yet, many are unaware and remain ”collectively blind” to these shifts.
This Website offers a snapshot of why this looming liquidity crunch in China could affect trillions of RMB worth of economic output and spill over into the financial markets. But China’s water crisis is not just China’s problem: there are global repercussions. Water resource allocation between agriculture, industry and municipal use, whilst balancing the economy and social stability is key. Policy decisions made at this nexus could shape China’s food and energy choices and whilst they may be “good for China”, they may be adverse surprises for everyone else. China’s solutions to their water crisis could change the global commodities trade and perhaps even alter the way industries work. Regional geopolitical tensions may also be unavoidable as China moves to solve the water crisis.
