The Pearl River Delta in south China’s Guangdong province is among the fastest growing regions in China, averaging above 13 percent since the early 1980s, mostly due to large inflows of direct foreign investment initially in low value-added manufacturing, and more recently in higher value-added manufacturing and, in a few cities, in services.
The high economic growth came at a very heavy environmental cost. Investment in environmental protection failed to keep pace with the rapid economic advances. Consequently, the Pearl River, China’s third longest river, became highly polluted, with many of its tributaries worse than the lowest national surface water quality standard (Class V), and unfit as a drinking water source.
Collected domestic wastewater was discharged to the river systems without treatment, except a few larger municipalities where only a portion of the wastewater was treated. In 2005, about 55 percent of the wastewater in Foshan Municipality was treated, while only 22 percent of the wastewater in Jiangmen Municipality was collected and treated.
The World Bank supported the Guangdong Provincial Government’s efforts to clean up the Pearl River Delta and improve its water quality, with the first Guangdong Pearl River Delta Urban Environment Project approved in 2004. The project financed wastewater treatment facilities and other investments in the provincial capital of Guangzhou, the most concentrated pollution source area.
Following the first project, the Second Guangdong Pearl River Delta Urban Environment Project, approved in March 2007, focused on Foshan and Jiangmen which together accounted for 15 percent of the pollutants in the Pearl River system. The project aimed to reduce water pollution in the Pearl River system originating from these two municipalities through a package of key initiatives, including wastewater treatment and sludge disposal, water quality monitoring, sediment removal from waterways, and flood protection and river embankment improvements.
The Pearl River Delta area has been identified as possibly the biggest pollution hot spot in East Asia, with major impacts spilling over into the South China Sea. By addressing the largest pollution sources in one of the national and regional pollution hotspots, the series of Pearl River Delta projects represented an important step in assisting China tackle one of the most serious environmental challenges facing the country.
 China’s system of environmental standards classify water quality with a series of benchmarks, with “Class I” the cleanest and “Class V” the dirtiest.