The latest water resources assessment released by China's Ministry of Water Resources on the 19th revealed a significant annual water shortage of nearly 40 billion cubic meters under normal conditions, with groundwater not being overexploited. At the same time, the volume of wastewater discharged nationwide continues to rise, raising concerns among experts about the need for better management and taxation of water resources. Chen Lei, Minister of Water Resources, highlighted that the imbalance between water supply and demand remains a critical issue, particularly in the Yellow River, Huaihe, Haihe, and Liaohe basins, where total water resources have dropped by 12%. The increasing discharge of industrial and agricultural waste has led to severe water pollution, with half of monitored lakes suffering from eutrophication. In some regions, water usage has far exceeded available supplies, causing rivers to dry up or flow intermittently. To address these challenges, the government plans to implement stricter measures to control the overuse and disorderly development of water resources, while enhancing protection and ecological restoration efforts. Experts from the China Institute of Water Resources and Hydropower Research, along with other organizations, have called for the introduction of a water resource tax as soon as possible. They argue that since water is a state-owned resource, users should compensate the state for its use. A water tax could encourage more efficient resource allocation, promote rational industrial structures, and ensure fairer distribution of water benefits. China already imposes a resource tax on minerals and salt, and reforms are underway to adjust the coal resource tax system. These reforms aim to shift from a "quantity-based" collection method to an "ad valorem" approach, addressing low tax rates and outdated methods. Experts suggest that similar strategies could be applied to water resource taxation. Notably, the petroleum and chemical industries are the largest consumers and polluters of water, accounting for over 20% of total industrial wastewater. Large-scale coal chemical projects can consume tens of millions of cubic meters of water annually—equivalent to the water needs of over 100,000 people or the water resources in more than 100 square kilometers of land. This is especially concerning in regions like the Yellow River basin, where water scarcity is most acute and where many oil and chemical companies are concentrated. If water use is taxed, it could significantly increase production costs for these industries, prompting them to adopt more sustainable practices.

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