Freshwater is the resource most strained by China's staggering growth over the last 20 years.

In June 8, 1988, I boarded a midnight train bound for Zhengzhou from Beijing, where my trip to research China's land and water challenges had begun just three days before. My senses were already brimming with the sights and sounds of the capital city and its surroundings -- horse-drawn carts piled high with bricks, waves of wheat awaiting harvest, bustling markets along dirt roads, and bicycles, bicycles everywhere.

Under China's "responsibility system," farmers were now allowed to sell whatever they harvested above their quota to the state. Colorful roadside stands laden with melons, fruits, vegetables, and meats were sprouting like weeds after a long winter. Many farmers suddenly had money to build new houses, and signs of a construction mini-boom were unmistakable.

This, of course, was just the tip of the iceberg: soon enough China's cities would catch the market-economy wave and ride it head-long into the globalized world of the 21st century. It was clear even then, nearly 20 years ago, that the availability of freshwater posed a major challenge to China's future. China was home to 21 percent of the world's people but only 8 percent of its renewable water supply. Most of that water was in the south, making the north even more water-short than the national figures suggested.

Water tables were already dropping as much as a meter a year in parts of the North China Plain, a major grain-producing region. The over-pumping of groundwater in Beijing's eastern suburbs was causing the land itself to subside as much as 10 centimeters annually. So as the train left the Beijing station and rolled past the Great Hall of the People, brightly lit in the dark of night, I was already wondering what China's water officials would do.

Two days before, I'd met Dr. Li Xuinfa, director of the Institute for Research on Environmental Protection, who stunned me by presenting me with a Chinese version of my 1984 Worldwatch paper, Water: Rethinking Management in an Age of Scarcity. The 60-page paper,which Dr. Li had translated and was planning to have published in China, called for a fundamental shift away from big, ecologically destructive water supply projects and toward conservation and efficiency improvements -- not a popular idea back then. But I wondered how much traction it would get in China.

I fell asleep quickly, lulled by the sound and motion of the train. I intended to awaken early so as not to miss a main attraction (at least for me), the crossing of the Yellow River. And it was that sight -- of China's second largest river, the cradle of its civilization -- that has most stuck with me for the last 20 years. I was amazed at how little water was in the channel. Such a paltry flow couldn't possibly sustain a major expansion of irrigated agriculture, industrial production, and urbanization, much less the fisheries and diversity of freshwater species that depended on those flows.

Some numbers confirm the impression. Chinese scientists first recorded zero flow in the lower reaches of the Yellow River in 1972, and between then and 1999, the river ran dry for a portion of all but six years. By the mid-1990s, about seven years after I returned from my trip and wrote in World Watch about how north China was exceeding its water budget, the average length of dry riverbed had expanded to 700 kilometers, up from 130 kilometers in the 1970s. In 1997, the lower reaches of the Yellow went dry for a record 226 days, causing US $1.6 billion in economic damage to Shandong Province, last in line for the river's water.

The disappearance of wetlands, harm to aquatic life, and other downstream ecological effects have led the Yellow River Conservancy Commission to restore some minimum flows to the river in recent years. But the overall health of the Yellow remains in serious decline.

In mid-January 2007, Chinese officials announced that one-third of the fish species in the river have disappeared. "The Yellow River used to be host to more than 130 species of fish, "an official from the agriculture ministry told the People's Daily newspaper, "but a third of them are now extinct, including precious ones."

China is now moving on all fronts to try to prevent water shortages from reining in its unparalleled economic expansion. Construction is under way on the central and eastern routes of an ambitious engineering scheme (first conceived in the 1950s) to transfer water more than 2,900 kilometers from the Yangtze River basin in the south to the thirsty cities and farm- lands of the Yellow, Huai, and Hai river basins in the north. With Beijing hosting the 2008 Olympic Games, officials have recently said that 400 million cubic meters of water from the central route would reach the capital before the games begin.

The most controversial and technically challenging route of the $62.5 billion mega-project would divert headwaters in Tibet to western portions of the Yellow River. According to Liu Changming, a hydrologist with the Chinese Academy of Sciences, construction on that western route could begin by 2010. With so much of China's population and economic activity located along its eastern coast, officials are also eyeing desalination as a major supply source.

Ten desalting plants have already been built, and China is investing $7 billion more to quickly expand capacity. The aim is to have desalinated seawater accounting for 37 percent of the water supply in coastal areas by 2020.

"Success" on this front, however, will almost inevitably be double-edged for China, as desalination facilities and their toxic briny wastes further stress coastal fisheries and marine ecosystems, and, if powered by fossil fuels, indirectly add to the risks of floods, droughts, and other harmful impacts of climate change.

China's efforts on the demand side have also advanced, but less ambitiously. In April 2005, China's National Development and Reform Commission announced a "China Water Conservation Technology Policy" that embraces more effective water pricing, conservation targets, and technologies such as drip irrigation to improve water efficiency.

Over the last two decades, the area of cropland under drip and other micro-irrigation techniques has expanded more than 14-fold, but still accounts for less than 1 percent of the nation's total irrigated area. As supplies tighten, water will continue to shift out of agriculture to industrial and urban uses,where a liter brings in 60 times more income than it does in farming.

As competition for water grows keener in China, the social and political stability needed for sustained economic progress will increasingly be threatened. Today,China has more economic power, technological capability, and global influence than anyone imagined in 1988. But I still wonder now, just as I wondered on that train 20 years ago, whether China will succeed in building an economy that can thrive within the ecological limits of its overtaxed freshwater ecosystems.

This piece was originally published by Worldwatch Institute, World Watch Magazine, © 2007.

Sandra Postel is the Leslie and Sarah Miller Director of the Center for the Environment at Mount Holyoke College and director of the western Massachusetts-based Global Water Policy Project.