expenditure 4 370 ¹ 3 930 11 350 Total 2 670 23 280 1. Using the ratio of 0.95 of capital expenditure derived from the MDG estimates. Source: Authors. this area are not considered further in this report; however, investments in dealing with irrigation needs if and when these groundwater sources fail will be prodigious. China According to the Chinese government, expenditure on what are called environmental goods and services have been rising steadily over the past decade as the country has sought to address the problems associated with water shortages, supply, treatment and pollution. In the 10th Five Year Plan (2001-05) an amount of USD 84.5 billion was budgeted, to be followed in the 11th Plan by USD 157 billion or 1.5% of GDP. In 2003 the estimated expenditure amounted to 1.39% of GDP (China, 2005). However, this covers all environmental goods and services, not just water, and it is unclear what other sums at provincial and municipal level should be included. This needs to be increased, probably to around 2% of GDP for air and water pollution control to 2020, and much greater allocations need to be made for basic capacity building (IBRD/WB, 2001). In the 10th Five Year Plan the budget outlay on water supply and wastewater treatment was USD 33 billion. In the 11th Plan a further USD 12.1 billion has been budgeted for water supply and USD 8.37 billion for wastewater treatment associated with three major water supply and wastewater projects. The 11th Five Year Plan (2006-10) sets as a target access to safe drinking water for 98% coverage of urban residents and 60% for rural residents. Recently the Chinese vice-minister of construction said that urban water supply needs USD 250 billion of investment, although the time scale was not indicated. Half of all wastewater is not treated and around 661 cities have no wastewater treatment systems. An estimated USD 10.4 billion is needed to construct the required facilities to meet these needs (China Economic Net, 2005). If 1% of GDP were to be spent annually on meeting the 