Blood is apparently thicker than water. In China, one day it may be the other way around. Despite recent floods, the country lacks sufficient water supplies. About half of China’s land area is considered water scarce under UN guidelines with just 1,000 cubic metres per head each year. It is the reason for extraordinary projects such as the 1,000km pipeline that will pump water from the south to the north of the country. The lack of water matters for many reasons.

First, China’s power sector is heavily reliant on water for cooling purposes and driving steam turbines. Coal fuels three-quarters of China’s power capacity – mining the black stuff requires yet more water. Coal and energy combined drive as much as a sixth of the nation’s water use, according to HSBC. A shortage of the liquid will limit output at the big coal miners such as China Shenhua and China Coal Energy, which have roughly quadrupled output over the past decade. As water scarcity impacts on power generation, industry will suffer too – factories sap most of the nation’s electricity. And as agricultural productivity grows, the fight for water will intensify.

Yet the seriousness of the situation also creates an opportunity. A lack of fresh drinking water has helped China’s wealthiest man to amount his riches, for instance. Zong Qinghou is the founder and boss of the country’s largest bottled water company Wahaha. What is more, Beijing has committed Rmb4tn ($652bn) to water infrastructure through to 2020. Citigroup estimates that China’s water-treatment market could grow by almost a 10th each year for the next five years. This is helping foreign companies such as Pentair and Honeywell, and locals Beijing Enterprises Water Group and China Everbright International – whose shares have roughly doubled over the past year alone. Beijing is still behind in addressing its scarce and polluted water supplies. Without such efforts, investors will have more than slowing growth numbers to lament.