China's Yellow River has run dry every year for more than a decade, failing to reach the sea for 226 days in 1997. The Huai, a river flowing through some of China's most densely populated regions, did not make it to the sea for 90 days. Satellite photos show hundreds of lakes shrinking and local streams vanishing.

These are just some of the most visible manifestations of China's increasing water scarcity, which over the next two decades could cause dramatic shortages in China's grain production and lead to its emergence as a huge importer, the Worldwatch Institute cautioned Wednesday."Because any threat to China's irrigation water supplies can affect the stability of world food supplies and thus regional stability overall, its deteriorating water situation has become a source of concern for governments and grain-importing countries," said a report issued by the environmental group.

A surge in China's grain imports would sharply drive up world grain prices as import needs surpass exportable supplies, predicted the report. "This would likely eliminate charitable food programs for the poorest developing countries."

The Worldwatch findings are based on a November 1997 report by the National Intelligence Council, an umbrella organization consisting of senior advisers to the director of U.S. central intelligence.

The council report faulted earlier Worldwatch analyses - based on official Chinese figures showing 235 million acres of cultivated land - which suggested that China's need for grain early in the next century could total up to 370 million metric tons, or 1.5 times the current level of total grain exports.

But the intelligence report - which estimated China's arable land at 346 million acres - conceded that by 2025 that country might need to import about 175 million metric tons of grain.

A U.S. intelligence official familiar with the council study said China should step up research and land management and liberalize agricultural practices, growing more fruits and vegetables for export and using the money to buy grain, for example.

The council study commissioned Sandia National Laboratory in New Mexico to model each of China's river basins and assess future water shortages. They showed some of the river basins already in heavy deficits even at current levels of consumption.