When China's new leader Xi Jinping spoke to the media last week, one sound bite struck me as especially noteworthy.

The Chinese people love life, he said, and they wish for better education, more stable jobs, better medical care -- in short, "more comfortable living conditions and a more beautiful environment."

This, he said, is the goal that China must strive for, one that is surely shared by many Chinese.

To achieve that, however, China needs to square the circle: to grow fast while mitigating the degradation of its environment and ecology, especially its air and water.

China, for one, has a drinking problem.

I discussed this topic with a group of experts in a Fortune magazine forum recently held in Beijing.

China's water crisis looks grim, the panelists agreed. The United Nations says China is one of 13 countries with extreme water shortages.

The problem is partly demographic -- it hosts 20% of the world's population yet only holds six percent of the world's water resources -- but is also exacerbated by rapid and short-sighted development.

Strong economic growth has turned the country into the world's second largest economy but at the expense of the environment.

The Yangtze River, once the lifeblood of the country, now flows a foreboding blood red, possibly due to industrial pollution, experts said.

Chronic droughts plague important agricultural regions like Shandong province, which produces most of China's grain.

For Guo Peiyuan, general manager at SynTao, a Beijing-based corporate sustainability consulting firm, the problem is close and personal.

"I was born in a farmer's family in southern China, and there are a lot of rivers there," he recalled. "When I was a child we could swim in the river. But as I grew up in the 1990s, a lot of factories came in. One summer vacation I went to my hometown, and my mother told me that the local farmers would not use the water for the crops because water was polluted, and the vegetables would die."

Stories like Guo's are common. Citizens lodge not-in-my-background public protests amid fears of industrial pollution. In October, for instance, thousands of residents protested in Ningbo, a thriving coastal city, and forced local officials to shelve plans to expand a chemical plant.

Such successes are still rare, and experts worry the water crisis is going to worsen in years.

China's water demand will reach 818 billion cubic meters, experts say, and yet there's only 616 billion cubic meters available.

Beijing has about 100 cubic meters of water available per person, well below the U.N. standard of 1,000 cubic meters per person, a threshold used to measure chronic water shortage.

Debra Tan, a specialist at China Water Risk, a Hong Kong-based non-profit group, suggested a way to visualize the crisis. Imagine, she said, that China has 25 bathtubs of water per person. The U.S. will have the equivalent of 125 bathtubs.

Polluted water is both deadly and costly.

China now has around 300 million people with no access to potable water, resulting in some 66,000 deaths per year, according to the World Bank. It estimates the cost of water pollution to China at $22 billion, roughly 1.1 percent of the country's GDP.

The Chinese government recognizes the problem and is seeking to cut water consumption by 30%.

But that target, experts said, is hard to reach.

"Because of population growth, because of distribution of populations, there's even greater demand. There's an expected increase of up to 10% demand in the agricultural spaces in northern China. This increase is going to put ever increasing stress on those already stressed water systems," said Matthew Durnin, director of science programs in Asia for The Nature Conservancy.

China's rapacious water consumption is in part boosted by an illogical scenario: water, while scarce, is unusually cheap.

"In China, water really should be three to five times more expensive," said Tan of China Water Risk.