The privatization of water supply in China

Globalization Monitor

Lam Ching

Editor’s Note: the following is a speech given at the 2011 Water Forum.

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 did last year in Kunming.

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

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 just as developed countries use much more water than developing countries. In China, more than 400 cities are facing water stress. The following are 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. In view of the shortage of water, some companies started to think about making profit by providing water.

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

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

Our research mainly focused on the following aspects: Firstly, the transparency of water market and public participation, secondly, the quality of the water supply after privatization, thirdly, the expectation of citizens towards the 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 about water privatization in Kunming. And most of them think there are 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 the 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 provider of water.

In conclusion, water privatisation has the following problems. Firstly, the price of water increased along with privatization. Secondly, there was no wide pubic participation during the decision-making process. Thirdly, the government does not differentiate between the terms introducing market principles and privatization. In order to resolve the water problem in China, the nationalization of the water service is a good way to go.


Documenting/文字記錄: Emma Wu, Lilian Hou