China has good resources of land and water. The problem is that they are often not in the same place. The south, which is water-rich, is too hilly for extensive farming. The North China Plain is flat, like France or the Ukraine, but lacks water. It produces 27 per cent of China's grain, but at the cost of serious stresses on its water resource. Deficits in the surface water supply have led to intensified use of the groundwater well beyond the “safe yield” where recharge balances withdrawal. Hence the water table has fallen greatly under both rural and urban areas ever since electric- or diesel-powered tubewells became widespread in the early 1970s. In addition to increased pumping costs and the need to bore ever deeper wells, consequences have included land subsidence, compressing the emptied aquifer in a number of areas and salt water intrusion in coastal areas.

The world's environmental technology and service industry, although comparatively young, is already important in global terms. In 1992 the value of the world market was estimated at US$210 billion, which was comparable to the global aerospace and pharmaceutical industries. By the year 2000 the market is expected to have grown to around US$335 billion and to have reached a value of US$640 billion by 2010.

Is there a water crisis in China? Certainly there are many sub-crises, many of them hardly new to that hydrologically complex, densely settled monsoonal landscape. Droughts, floods, befouled flows, and water-short northern cities have long been integral to the Chinese experience. The last half-century has witnessed remarkable efforts to control and reshape waters to ameliorate the traditional ravages of flood and drought. Yet many of these projects, and their water sources, are ageing at the same time that state financial capacity is diminishing. Simultaneously, economic development – especially industrialization, urbanization, chemical agriculture and livestock production – have placed increasing stresses on the quantity and quality of water.

This paper presents an analysis of the adoption and implementation of Chinese environmental policies and pollution abatement measures. It sketches the role of the State Environmental Protection Administration (SEPA) and the recently adopted Five-Year Plan for the years 1996–2000 in coping with China's increasing problems of water, air and soil pollution. Remedial measures, which could be legal, administrative or economic, are analysed both as part of more general programmes of legal and economic reform, and as specific designs for local or sectoral problems. In previous articles, I have discussed several major environmental concerns: environmental damages, scarcity of water, control over emissions by township and village enterprises (TVEs), investments and management methods. The present contribution will focus on wider political issues, such as participatory policies, differences in implementation between regions and sectors, and most recent developments in industrial pollution problems and abatement measures. This survey cannot be complete: the limitations of space and the need to give some concrete examples make it necessary to be selective. Therefore, while some problems will be highlighted – such as water treatment in the Huai River basin, sulphur dioxide emissions, and pollution by TVEs – other problems such as noise pollution will be omitted.

Environmental protection in the international context constitutes a type of soft or functional regime directed at the control of behaviour by states which generally does not present an overt threat to their neighbours. Rather, the principal danger is one of everyday social or economic activity presenting risks within the state in which it originates, to that state's neighbours and, possibly, the global commons. Thus, it is typically the activity's externalities rather than any intent to cause harm or encroach on neighbours' territory which is the cause of concern. Control is complicated by sovereignty issues, which become paramount when externalities cross a country's boundaries and affect the originator's neighbours and/or the wider international community. Although there have been cases of countries obtaining judicial relief for environmental harms that originated in another country, such issues are overwhelmingly non-justiciable. It is more likely that any international regimes that are established will provide no avenue for judicial relief.

Recent writings on China's achievements during the last quarter of the 20th century stress, almost without exception, the enormity of change. But, for both universal and particular reasons, this survey of the country's energy resources and uses will stress continuity as much as change. Taking the inertia of complex energy systems as the key universal given, the most important particular explanation lies in peculiarities of China's resource endowment.

China's long-term history – social, economic, political, and intellectual – has been interwoven from the start with its environment. In counterposed fashion, the history of the Chinese environment has been entwined with that of anthropogenic forces. The Chinese landscape was one of the most transformed in the pre-modern world as the result of its reshaping for cereal cultivation, re-engineering by hydraulic works for drainage, irrigation and flood-defence, and deforestation for the purposes of clearance and the harvesting of wood for fuel and construction.

Despite the transformative effects of millennia of human occupation, China remains a tremendous storehouse of biological diversity. The extremely mountainous terrain has fostered speciation by continuously isolating populations of plants and animals. This topography (combined with the large area of the country that is sub-tropical and tropical) also provided refuge for many taxonomic groups during the major climate change-induced mass extinctions of the Pleistocene era, as well as the more recent Ice Ages. As a result, China is one of the world's major centres of biological diversity (or biodiversity), a term which refers to the variety of ecosystem types, the number of different of species and the genetic variability within a single species. In certain respects, thousands of years of human habitation has actually enhanced this diversity. Rice, soybeans, oranges, tea and many other crops were first domesticated in China, and generation upon generation of careful selection by farmers and pastoralists have made it one the earth's richest centres of crop and domesticated animal germplasm. The country's variety of wild plants and animals is greater than that of either North America or Europe, and equal to one-eighth of all species on earth.