The simple answer: Beijing is still addicted to growth. The economic boom has lifted hundreds of millions of Chinese out of poverty, and the Communist Party's legitimacy, perhaps even its survival, depends on continued expansion. China's leaders pay lip service to conservation and efficiency as a solution to the north's chronic water shortage. But rather than raise the price of water to true market levels—a move that would surely alienate both the masses and big industry—they have opted instead for another pharaonic feat of engineering: the South-to-North Water Transfer Project. The 62-billion-dollar canal system, which is designed to relieve pressure on the Yellow River, will siphon some 12 trillion gallons of water a year from the Yangtze Basin and send it 700 miles north, passing beneath the Yellow in two places. It's no surprise, given the Olympian scale of the project, that it—like Sanmenxia—originated as one of Mao's pipe dreams.

Even as other parts of China careened through droughts and floods in past decades, the village of Xiaojiadian enjoyed a steady supply of fresh water by virtue of its location on a tributary of the Yellow River, less than 200 miles from where it spills into the sea. But the waters, once a source of life, have turned deadly. Nobody here likes to talk about the plague that has struck the village, but the scar running down the chest of a gaunt farmer named Xiao Sizhu has its own eloquence. It shows precisely where doctors tried to remove the cancerous tumor gnawing at his esophagus. In between bites of sodden bread—one of the only foods he can digest—Xiao, 55, whispers about the old days, when his family felt lucky to live in this well-watered corner of the river basin, in eastern Shandong Province. Over the past two decades, however, a parade of tanneries, paper mills, and factories arrived upstream, dumping waste directly into the river. Xiao used to swim and fish in the eddy next to the village well. Now, he says, "I never go close to the water because it smells awful and has foam on top."

Another place he avoids is the grove of poplar trees outside the village, with its burial mounds stretching to the river's edge. In the past five years more than 70 people in this hamlet of 1,300 have died of stomach or esophageal cancer. More than a thousand others in 16 neighboring villages have also succumbed. Yu Baofa, a leading Shandong oncologist who has studied the villages of Dongping County, calls it "the cancer capital of the world." He says the incidence of esophageal cancer in the area is 25 times higher than the national average.

The more than four billion tons of wastewater dumped annually into the Yellow River, accounting for a full 10 percent of the river's volume, has pushed into extinction a third of the river's native fish species and made long stretches unfit even for irrigation. Now comes the human toll. In a 2007 report China's Ministry of Health blamed air and water pollution for an alarming rise in cancer rates across China since 2005—19 percent in urban areas and 23 percent in the countryside. Nearly two-thirds of China's rural population, more than 500 million people, use water contaminated by human or industrial waste. It's little wonder that gastrointestinal cancer is now the number one killer in the countryside.