China's water pollution situation has reached "alarming" levels, the Asian Development Bank (ADB) said last Thursday, Economic Observer reported (in Chinese). The Philippines-based lender said it will donate US$500,000 to Beijing to start a policy research project on water pollution. The grant is aimed at helping the government research market-oriented solutions to deal with the the serious situation. "Despite government efforts and investment, the government has yet to arrest these problems," said Yue Fei, a social sector economist with the ADB. China's five-year-plan calls for the country to cut the discharge of pollutants, most of which come from industry, by 10% from 2005 levels.