Nuclear reactors don't need a particularly big amount of cooling water.
The thermodynamic cycle needs a cold source though, and it's most commonly water. This doesn't depend on the reactor design and this is equally as true of coal plants.
As long as you are making electricity out of a thermodynamic cycle, you need a heat source (be it a flame or a nuclear reaction) and a cold source.
As the reactor is operating in the Gobi desert and China claims that its main advantage for them is exactly this possibility of operating in the inland arid areas of the country, unlike their current reactors that must be installed only close to the sea, in the part of the country with abundant water, they must have a solution for the cold source that does not involve water.
Perhaps they use as a cold source the underground soil, though the soil thermal conductivity will limit the amount of power of the reactor. This reactor has a modest power, which could be explained by this constraint.
If the reactor is as safe as they claim, the moderate output power per reactor could be compensated by installing many such reactors.
> As the reactor is operating in the Gobi desert and China claims that its main advantage for them is exactly this possibility of operating in the inland arid areas of the country
This is mainly a feature of the reactor being small. If you don't have much heat to dissipate, even air cooling becomes feasible.
> unlike their current reactors that must be installed only close to the sea, in the part of the country with abundant water
In reality even current water-cooled reactors can be pretty efficient in terms of water use if you design the cooling system with that in mind. See the Palo Verde Nuclear Generating Station in Arizona.
> Perhaps they use as a cold source the underground soil
I'm not sure this would work, as you'd be storing heat in the soil without a real heat drain so the yield of the plant would decrease until it reaches zero.
For small reactors air or radiative cooling are an option though.
The thermodynamic cycle needs a cold source though, and it's most commonly water. This doesn't depend on the reactor design and this is equally as true of coal plants.
As long as you are making electricity out of a thermodynamic cycle, you need a heat source (be it a flame or a nuclear reaction) and a cold source.