China plans to make dramatic improvements in the efficiency of its water usage. Inefficiency is exacerbating water pollution, and leading to regional shortages. Daniel Schearf reports from Beijing.

China's Ministry of Water Resources says there is huge potential for the country to save water. The ministry says China's water consumption per unit of GDP is four times higher than the world average, and eight times higher than that of the United States and other developed countries.

The ministry says it plans to have launched 100 pilot water-saving projects between last year and the end of 2010. The projects have the potential of saving the country billions of cubic meters of water.

Water is a critical issue in China, with its massive population and its fast-growing economy. The demand for water is increasing, but 70 percent of the country's rivers and lakes are severely polluted, and the dry northern part of the country often faces water shortages.

James Nickum is a water governance expert at Tokyo's Jogakkan College. He says changing demographics and huge industrial demand make getting water to the right places a problem.

"Per-capita availability of water in the region is really down there sort of more like the American West or something," he said. "And, then you put on top of that 10 percent economic growth every year, and vast migrations to the city, and you're putting a lot of burden on getting water to people, and especially in the urban areas and for industry."

The official Xinhua News Agency says the central government plans to control the gross amount of water consumption and set consumption quotas. Xinhua says localities will be required to establish their own mechanisms for managing water usage.

China only recycles 60 to 65 percent of its industrial wastewater, compared with 80 to 85 percent in developed nations. Much of the leftover wastewater is dumped untreated into rivers and lakes, adding to pollution.

Beijing plans to quench the thirst of northern China by moving water there from the Yangtze River in the wet south, through a multi-billion dollar water diversion project.

The controversial project is already over budget, and some critics worry about the environmental impact. They say the money could be better spent cleaning up existing pollution.