BEIJING, May 22 (Reuters) - China, home to a fifth of the world's population but just 7 percent of its water resources, has approved over 170 new projects it hopes can boost supply and resolve a crisis threatening to curtail economic growth and food production.
The State Council, China's cabinet, agreed to launch projects that would expand irrigation, speed up construction of its $62 billion south-north water transfer project and cut water demand from agriculture.
The projects, to be launched over the next six years, will increase annual supply by 80 billion cubic metres and cut demand by a further 26 billion in rural areas, according to cabinet documents. That totals more than 11 percent of China's 700 billion cubic metre water consumption cap in 2030.
If successful, the move would relieve some of the growing pressure water shortage is putting on food production, power generation and manufacturing.
"Not executing this plan is really not an option. China is trying to slow down the rate of growth in water consumption (by setting caps), but even in order to meet these caps they have to increase the supply," said Debra Tan, director at Hong Kong-based think-tank China Water Risk.
China will be short 200 billion cubic metres per year by the end of the next decade unless it starts managing its water better, according to think-tank 2030 Water Resources Group.
The projects announced on Wednesday followed a 2011 pledge by the government to spend 4 trillion yuan ($641 billion) to solve the crisis.
"Water savings in agriculture, the largest water user, are a must," Tan said, adding the irrigation scheme was the key element of the plan.
The challenges China face are huge, with its limited natural water supply diminished by poor management, as the government's single-minded focus on economic growth for decades has left the environment battered.
China said last month that almost 60 percent of its groundwater was polluted, following earlier reports of river and lake water blighted by algae blooms, bubbling chemical spills and untreated sewage discharge.
In January, the State Forestry Administration revealed that 9 percent of wetlands had disappeared over the past decade, being converted to agricultural land or giving way to major infrastructure projects.
The seriousness of the situation was underlined on Wednesday when the Chinese Academy of Sciences said climate change had caused China's glaciers to shrink 15 percent in the past 30 years.
The trend is likely to have a severe impact on water flow into several of Asia's main rivers, cutting supply further. (Reporting by Stian Reklev; Editing by Nick Macfie)