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According to the report by Canada-based Probe, called "Beijing's Water Crisis: 1949-2008 Olympics," Beijing's 200 or so rivers and streams are drying up, and the city's reservoirs are almost empty.

More than two thirds of the city's water supply now comes from groundwater, and Beijing is extracting water originally intended for use in emergencies, such as war, from 1,000 metres (3,280 feet) or more underground.

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And then I read the first link and apparently water is to come from the mountains ... glacial or melt water?

ETA: The report addresses the diversions.

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Long distance diversion is extraordinarily expensive and environmentally damaging. Even if water is successfully diverted from Hebei province in 2008 and the Yangtze River in 2010, groundwater will continue to be Beijing’s most important water source. The municipality will still need to continue pumping about three billion cubic metres of groundwater annually to keep up with the forecasted growth in demand – that’s 500 million cubic metres over the annual allowable limit for “safe” extraction. With each new project to tap water somewhere else, demand for water increases at an ever greater cost to China’s environment and economy.

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[ 27 June 2008: Message edited by: Frustrated Mess ]