Chinese water dragon substrate help?

I had one of those and regular play sand works just fine. The bark definitely does hold the humidity in as it soaks in all the moisture . Even though you've already opened it, I'd advise getting rid of it as they do tend to mistake the bark for their food and just eat it which can clog them up inside. Are you in the UK? If so, Homebase and Argos do good quality play sand for a good price.