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China’s Water Crisis and the Privatization of Urban Water in Kunming

This report is a follow-up of our pilot research published in April, 2010The Reform of the Urban Water Supply in Southern China . In the previous report, we studied the social, economical and political impacts of water privatization in six cities among the southern region, by conducting surveys and in-depth interviews. The results from the pilot study provided us an overview of the historical development, as well as some useful empirical data to unveil the problems faced by the Chinese people due to the privatization.      

In order to further investigate the issues of urban water supply brought about by the privatization of urban water services, we include in this report the results of the additional surveys and in-depth interviews that we conducted in Kunming of the Yunnan Province in 2010 and the most recent developments in the six studied cities in terms of urban water supply. This new report also identifies the recent trends and characteristics of the urban water reform, and investigates the degree of privatization of China’s urban water by mapping the models of the provision of water supply in different cities throughout the country.

Key Findings:
•    In terms of the water companies’ financing, the overall degree of privatization among the cities in concern was very high.  Only 24% of first-tire cities are state-owned. Suez and Vivendi were two of the top ten most influential water companies, in China, from 2006-2009.

•    In Kunming: Even though the majority of people (72%) felt comfortable with the quality of tap water, 66% of them said that they often bought bottled water for daily consumption. 64% of the people said that they did not know the ownership of the city’s water supply system, and 50% said that they never received any information from the water supply company. Over half of the people we interviewed said that they did not see any improvement in terms of the service quality of water supply after the marketization reform.

•    The Rise of Local Water Giants: the financial capability in many cities has been improved gradually over the past ten years and the need to attract foreign investment is slowly declining in many second-tire cities. On the other hand, by making use of their governmental back¬ground, some big domestic water companies are expanding. It is reflected by the fact that more domestic water firms have moved up in ranking among their foreign-owned competitors in China’s water industry, most of them are state-owned shareholding companies or former state-owned enterprises. Their special status is beneficial for their expansion.

Content of the report:
Chapter 1: The Marketization Reform of China’s Urban Water
1.1 China’s Water Crisis
1.2 Key Findings from the Previous Report

Chapter 2: New Trends in China’s Urban Water Reform
2.1 Updates for the Six Studied Cities
2.2 Map of China’s Urban Water Supply Models

Chapter 3: The Reform of Urban Water Supply in Kunming
3.1 Introduction
3.2 Results and Analyses

Chapter 4: Problems with the Market¬ization Reform in China and Alterna¬tives
4.1 Problems with the Marketization Reform
4.2 Alternatives

Published by Globalization Monitor Limited
March 2011
ISBN: 978-988-18039-9-3
All rights reserved.
The content of this book may be reproduced in non-profit publication
Credit is requested
Globalization Monitor Limited
Mailbox: P.O. Box 72797, Kowloon Central Post Office, Hong Kong
Price: HK$ 100 / US$ 13 (postage included)

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