About 70 per cent of wastewater, 28 billion cubic metres annually, will be treated.
Currently, the country's 792 wastewater treatment plants can only handle about half the sewage.

By the end of 2007, water supply networks that have been in use for more than 50 years or suffer from leaks or damage will be rebuilt.

"If China can reduce the leakage rate to 7-9 per cent, the level in developed nations, it can save as much as 10 billion cubic metres the annual amount to be provided by the middle route of the south-north water diversion project from the Yangtze River," Qiu said.

The ministry will raise public awareness of water saving but Qiu said raising water prices to promote conservation was not the right option for China, where incomes are not high.

Qiu said the country welcomes more foreign investment in the water sector  which is currently at 10 per cent of the total  as well as technology from abroad.

He noted that the fifth World Water Congress and Exhibition will be held in Beijing from September 10 to 14, the first time in Asia.

"The congress will provide a platform for international co-operation. Some 2,000 water experts will bring with them the experience and technology to tackle China's water problems. It will benefit both China and the world," Qiu said.

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