China faces worsening water shortages, a government official warned.

The country's water shortages, along with serious river pollution and a deteriorating aquatic ecosystem, pose a growing threat to economic and social development, Hu Siyi, China's vice minister of water resources said Thursday, state-run news agency Xinhua reports.

China's population of 1.3 billion people consumes more than 600 billion cubic meters of water a year, equal to about three-quarters of its exploitable water resources, Hu said.

"The constraints of our available water resources become more apparent day by day."

New guidelines released Thursday by the State Council -- China's Cabinet -- cap the maximum volume of water use at 700 billion cubic meters by 2030.

Other measures include stricter government supervision of underground water supplies, greater protection of drinking water sources and the introduction of water-use licenses and other steps aimed at restoring the aquatic ecosystem.

"The situation is extremely serious in many areas. With over-development, water use has already surpassed what our natural resources can bear," Hu warned.

About two-thirds of Chinese cities are short of water and nearly 300 million rural dwellers have no access to safe drinking water. Overall, China faces a national water shortage of more than 50 billion cubic meters on average a year.

"If we don't take strong and firm measures, it will be hard to reverse the severe shortages and daily exacerbation of the water situation," Hu said.

Ma Jun, director of China's Institute of Public and Environmental Affairs, a non-government organization protection agency, acknowledged the government's efforts to address the problem but said its policies have failed to curb growing demand for water.

"We have built all these dams, we are drilling increasingly deeper to tap into aquifers, many cities are building water diversion projects -- in some ways we are reaching our limits in terms of water supply," Ma was quoted as saying by the Financial Times.

Data from the Ministry of Water Resources indicate that in 2010, 40 percent of Chinese rivers were seriously polluted and unfit for drinking after 75 billion tons of sewage and waste water were discharged.

Last month a heavy metal spill of toxic cadmium in southern China's Longjiang River threatened drinking water supplies for millions of people.

Hu said the rapid growth of China's chemical sector has led to an increase in water pollution but the government has been limited in its ability to monitor it.

"Government authorities cannot respond quickly to every accident, due to the limited number of monitoring sites. In some areas, water is only monitored once a month," he said.