Editor's note: Since the opening-up and reform policy was introduced in the late 1970s, China has witnessed urbanization on a massive scale as more than half the population now lives in cities compared with only 18 percent in 1978. The increasingly crowded and sprawling cities have been plagued by problems such as pollution, traffic, and rocketing housing price.

To address these problems, the Chinese government convened last week its first Central Urban Work Conference in 37 years to draw up plans to cope with the most pressing problems in city development. Here are some of the urgent issues the Chinese government is to deal with in the coming years.

The photo shows a wetland park in Neijiang, Southwest China's Sichuan province. Building wetland parks is one of the measures taken by the government to build "sponge cities" in response to water shortage. [Photo by Lan Zitao/Asianewsphoto]

Sponge city to soak up water shortage problem

Among more than 600 cities across China, nearly half of them suffer from water shortage. Take Beijing for example, the city relies heavily on water diverted through the South-North Water Diversion Project - 70 percent of the water pumped into the city comes from the Yangtze River.

To cope with water shortage in the cities, the Chinese government plans to invest more than 86.5 billion yuan ($13.3 billion) to build "sponge cities" that collect and recycle 70 percent of rainwater. The government also proposed to use a seawater desalination system and build a groundwater monitoring system to build a water-saving country.

Related: Program will make cities 'sponges' for rainwater