Water Forum 2011: The privatization of water supply in China

Globalization Monitor

Lam Ching

I will deliver my presentation in three parts. Firstly, I will introduce what is water crisis, secondly, I will present the situation of water privatization in Mainland China, and finally, I will report the research on water privatization we had done last year in Kunming.

Firstly, water is very important to us. It was identified as a basic human right by United Nations in 2010. It means that the government is responsible to provide safe and enough water for citizens.

However, water is far from enough on earth. In China, the water used per capita per year is only 2156 cubic meter, which is only a little bit higher than the threat of water stress. Besides, the use of water is not justice for developed countries use much more water than developing countries. In China, more than 400 cities are facing water stress. There are following reasons for water shortage: Firstly, the increasing population in China, secondly, the development of agriculture. The abuse of chemical fertilizer led to eutrophication of water. In order to irrigate the farmland, farmers need to use underground water. As a result, many cities subsided seriously. The third reason is urbanization and industrialization in China. And the final reason is the construction of dams.

Environmental problems are not only social issues. They are highly related to politics and economics. Facing the shortage of water, some companies started to think about making profit by providing water.

There were four stages for water privatization in China. 1949 to 1979 was planning economy period. The water was supplied by the state with very low price. The second stage was 1979 to mid 1990s. In this period, the water privatization was started. During 1990s to 2003, there was a rapid privatization of water supply. By BOT (Built-Operate-Transfer),15% to 18% profit was guaranteed by the government. The forth stage is from 2003 to now, the government is still encouraging water privatization. Nowadays, most of the capitals in China have adopted water privatization. Foreign water companies have great impact in China now.

In Kunming, the capital of Yun Nan province, there has been a shortage of water for a long time. In 2004, 49% of the share of water supply was transfer to foreign companies with 30 years operation right.

Our research mainly focused on the following aspects: Firstly, the transparency of water market and public participation, secondly, the quality of water supply after privatization, thirdly, the expectation of citizens towards water supply. 50 questionnaires were completed and 4 in-depth interviews were done in Kunming.

According to our research, however, a large proportion of the respondents have no idea of water privatization in Kunming. And most of them think there is not enough ways for them to express their feelings.

The water price in Kunming has increased rapidly from 2002 to 2009. However, few respondents think they use less water because of the increasing water price. Since they already use water in a very environmental way in daily life, it is nearly impossible for them to use less water.

When asked about the quality of water supply, more than half of the respondents are not satisfied with the service. Most of them consider the government to be the most suitable one to provide water.

In conclusion, there are following problems of water privatization: Firstly, the price of water increased along with privatization. Secondly, there is no wide pubic participation during the decision making process. Thirdly, the government does not classify introducing market principles from privatization. In order to resolve the water problem in China, nationalization of water service is a good way to go.


Documenting/文字記錄: Emma Wu, Lilian Hou