Introduction

Perhaps the single most significant development shaping global economic and political patterns during the last quarter-century has been the ‘rise of China’. Since 1980 China has engaged in a profound economic restructuring that has generated one of the largest (at least measured by the numbers of people affected) and quickest social transformations in global history. At the centre of the transformation to a market economy has been changes in China's management of resources. Along with energy, water will continue to be the key to continued economic growth in China. The North China Plain perhaps best exemplifies this water challenge. And the major predicament of this area is effectively managing the Yellow River that runs through the very centre of this critical agricultural and industrial region – a region that is also well below the global average of water availability per capita.

In 1997, the Yellow River dried up, some 750 km away from its mouth in the Bohai Sea. Domestically, the dry-up signalled that Yellow River management had reached crisis stage. Internationally, the general issue of water scarcity in North China prompted speculation about China's future ability to feed itself and the potential impacts on global food security (Brown and Halweil, 1998). Unprecedented pressures of urbanisation, industrialisation, and expanding agriculture suggested to political and technical elites that China's water management had reached a critical point; from here, engineering and managerial innovation and borrowing would be necessary to cope with increasingly scarce water resources.