Providing an adequate water supply for Hong Kong has always been difficult because the region has few natural lakes and rivers, inadequate groundwater sources (inaccessible in most cases due to the hard granite bedrock found in most areas in the territory), a high population density, and extreme seasonable variations in rainfall. Thus about 70 percent of water demand is met by importing water from the Dongjiang River in neighbouring Guangdong province. In addition, freshwater demand is curtailed by the use of seawater for toilet flushing, using a separate distribution system.
Water supply in Hong Kong initially came only from local sources, including numerous small dams built in the valleys of the territory.
Until 1964 water rationing was a constant reality for Hong Kong residents, occurring more than 300 days per year. The worst crisis occurred in 1963–64 when water was delivered only every 4 days for 4 hours each time. The territory, which was under British colonial administration, then embarked on a three-pronged approach to supply water to an increasing population. (Hong Kong's population increased from 1.7 million in 1945 to about 6 million in 1992.) The strategy involved seawater flushing, the construction of larger freshwater reservoirs in bays that used to be covered by the sea, and water imports from mainland China.
In 1955 seawater was first used to flush toilets in a pilot scheme. This was followed by installation of seawater flushing systems in all new houses and in selected districts beginning in 1957. In 1960 legislation was introduced to promote seawater flushing on a larger scale, followed by substantial investments in a separate network. However, the system was unpopular due to the need to build a separate plumbing network in each house. Seawater initially was sold, but from 1972 on it was provided for free and the costs of the system were recovered through the drinking water tariff. In 1991, about 65 percent of Hong Kong's households used seawater for flushing. By 1999, the number of conforming households had increased to 79 percent.
In 1957 construction began on the first dam that would close off a natural sea bay and create the Shek Pik Reservoir. The reservoir was built to store freshwater that previously had been "lost to the sea" during the rainy season. The reservoir was completed in 1963. The completion of Shek Pik reservoir was followed by the construction of two larger reservoirs of the same type. After the Plover Cove Reservoir was completed in 1968, water rationing was discontinued until 1977. With the completion of the High Island Reservoir in 1978, continuous water supply was re-established. Water rationing was renewed for the last time in 1980–81. Between 1965 and 1982 water had to be rationed seven times, often for many months with interruptions of up to 16 hours per day. To maintain Hong Kong's competitiveness, rationing was imposed only on residential users. Industry, the city's main water user, was exempted from rationing. The need for rationing was finally overcome in 1982 thanks to water imports.