The key culprit is industry, which Economy said uses 4 to 10 times more water per unit of GDP than similar economies and is polluting the nation's existing water resources at an alarming rate. She cited a February 2013 report by the Geological Survey of China saying a full 90% of the country's groundwater was polluted, while the Ministry of Environmental Protection said the water from about 25% of China's major river systems was so filthy that it couldn't be even used for industry or agriculture.
Tap water is mostly undrinkable, and those who do drink it run major health risks. And the contamination is making it into the food system, resulting in cadmium-tainted rice among other threats, she said.
It's not like the government isn't aware of the problem, but solutions such as raising the price of water have moved ahead at a snail's pace. And "of the 1.3% of GDP that Beijing currently spends on environmental protection … half finds its way into other local priorities such as infrastructure development," Economy told U.S. lawmakers.