shui bo wrote so many on this topic, quite enlightening laymen like us. but i hope to see more comments on some other issues:

1. what's the relationship between upstream holding water by dams and downstream water shortage, most typically last year happened on yangtze river. is that a one time anomaly or going to happen again and again?

2. a significant portion of china's big rivers are internaitonal ones, mainly tibet plateau ones which go to south and southeast asia. those neighbour countries are not very happy about china building dams upstream.

3. is northern diversion of south rivers really a good idea? wouldn't this project interfere with hydropower project? i think yangtze river,at best, can only satisfy needs of southern china. north need to think other ways to solve their own water shortage problem.

4. how is hydropower plan going to affect water supply?

water scarcity is and will be bigger and bigger a problem for china, i would even go further to say it will be the biggest, more than energy and other issues.
as good as water to be used as an energy source, its priority use is still drinking, washing and agriculture.