China is launching a massive $330-billion project in an ambitious attempt to deal with severe water pollution, according to state media quoted by Reuters.

The most populated country in the world has relatively small water reserves and the problem of water scarcity has become particularly pressing over the past few years. The situation in the northern part of China is especially alarming as there is less water available per capita than in the Middle East.

The problem is further aggravated by the fact that parts of the country's groundwater reserves are heavily polluted by industrial activities, potentially putting residents at risk. Government data quoted by Reuters shows that 57.3 percent of 5,000 groundwater checkpoints surveyed in 2012 were heavily polluted and contamination could flow into drinking water supplies.

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According to the China Securities Journal, citing the Ministry of Environmental Protection, authorities are still working on the final draft of the plan but the financial details have already been decided on. The project will see $330 billion invested in various programs, including water treatment, membrane technology and recycling, aiming to improve the country's water quality by between 30 and 50 percent.

Previous estimates by the government predicted that over the next five years 60 billion yuan would have to be invested in constructing sludge treatment plants, Reuters said.