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China faces water shortage of 40 billion cubic meters (1,400 billion cubic feet) every year with severe water pollution posing a threat to the health of millions of people, the AFP reported.
More than 400 of 669 Chinese cities are facing water shortages and the situation in 110 of these cities was described as "serious," according to a report by Xinhua news agency, quoting Wang Shucheng, minister of Water Resources.
About 20 million hectares (49 million acres) of farmland were affected by drought, reducing grain production by 28 million tons, Wang told the Standing Committee of the National People's Congress, China's top legislature.
The AFP report also said that severe water pollution in China made water shortages even worse and threatened the safety of drinking water.
Wang said that the water pollution in China is very serious and added that
just 38.1 percent of China's river water was drinkable.
China pumped out 68 billion tons of sewage in 2003, double the amount in 1980, Xinhua said.
"Currently, 300 million Chinese people are drinking unsafe water", Wang said in an earlier Xinhua report.
More than 63 million peasants living in the plains of northern and eastern China were drinking water with fluorine above acceptable standards and 60 million people in central, eastern and southwestern China were suffering from illnesses related to poor water quality, according to Xinhua.
China has set the ambitious goal of providing safe drinking water to every rural family by 2020, as part of government goals declared to the United Nations.
Officials said they were ready to launch a long-term project to deal with the lack of clean water, aiming to cut down the number of people without access to clean drinking water by one third by 2010.