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This discussion paper examines the development of water markets as a solution to water scarcity in China, with particular focus on Water Rights Trading (WRT). Water scarcity is an issue of growing concern for China, particularly in the north, where a combination of limited water supplies, economic growth, and population increases are increasingly straining water resources. The Chinese government has moved enthusiastically toward an embrace of market mechanisms to address water scarcity, with WRT being the preferred policy instrument in the agricultural sector, which accounts for the majority of water use in China. Proposed advantages of WRT include a more efficient allocation of scarce water resources and the ability to limit total water use in a given region by carefully limiting rights allocation. However, the implementation of WRT has encountered significant challenges in China, which include a lack of effective monitoring and enforcement of water use, conflicts of interest between various units of government, which prevent effective administration, and a lack of integration with other approaches to water scarcity, including supply augmentation. In light of these challenges, this analysis concludes that market-based mechanisms in general, and WRT in particular, have an important but only partial role to play in alleviating water scarcity in China. This discussion paper proposes several policy recommendations to improve the development of water markets in China, in particular by lowering the transaction costs to establishing markets and improving policy coordination.
"China has experienced a wide-scale and rapid transformation from an agricultural based economy to the manufacturing workshop of the world. The associated relocation of the population from relatively low density rural areas to very high density urban areas is having a significant impact on the quantity and quality of water available as inputs into the production and consumption process, as well as the ability of the water system to absorb and neutralize the waste byproducts deposited into it. Water shortages are most severe in the north of the country, where surface water diversion is excessive and groundwater is being depleted. In addition, the quality of water is deteriorating because of pollution, thereby aggravating existing water shortages. The biggest challenge ahead will be for national and local governments to craft policies and rules within China's complex cultural and legal administrative system that provide incentives for users to increase efficiency of water use, and for polluters to clean up the water they use and return clean water to stream flows. Using a standard public economics framework, water requirements for public goods-such as ecosystem needs-should be set aside first, before allocating property rights in water (to enable water markets to function and generate efficient allocation signals). Even then, water markets will have to be regulated to ensure public goods, such as public health, are not compromised. Until water markets are implemented, staying the course on increasing water and wastewater prices administratively and encouraging water conservation are necessary to reduce the wasting of current scarce water resources, as well as the new water supplies to be provided in the future. "--World Bank web site.
This book investigates water resources management and policy in China over the last two decades with a core focus on the role of water for socioeconomic development and sustainability. Recent policies, such as the Three Red Lines and the Water Ten Plan are evaluated for sustainable water supply, use and quality control. The book appraises solutions through demand management, water rights and pollution trading, virtual water and water footprint. Supply management is discussed taking examples from the Three Gorges Dam and the South North Water Transfer Project. The water market is investigated uncovering the active engagement of the private sector and includes discussions on how transboundary rivers demonstrate China’s engagement with its riparian countries for benefit sharing. This book will be an invaluable reference for researchers in the field as well as practitioners and students who have an interest in water and development in China.
Exploring water scarcity issues in light of the growing crisis in global water management, this book examines the applicability of water markets. It provides an overview and understanding of the presence of water markets across the globe, analysing the ways in which different countries and regions are grappling with water scarcity.
Master's Thesis from the year 2007 in the subject Business economics - Marketing, Corporate Communication, CRM, Market Research, Social Media, grade: 1,0 A, University of Hamburg, 72 entries in the bibliography, language: English, abstract: Since the beginning of the "Open-Door-Policy", China has scored remarkable achievements. Its GDP has grown from 150 billion to 1.65 trillion USD and its per capita GDP from 190 to more than 1,200 USD. However, the resources that such growth demands have raised concerns about the long-term sustainability and hidden costs of the growth. Many of these concerns are associated with the state of Chinas water resources. As demand for water has increased, so too have problems with water shortages, pollution, falling groundwater tables and flood/drought damages. To tackle these challenges the Chinese government increasingly encourages foreign companies to engage in the Chinese water market. Market research studies claim that this market holds promising business opportunities for both domestic and foreign companies. This thesis questions this observation from a foreign investor's perspective. It shows that the Chinese water market indeed holds business opportunities, but that these opportunities are mainly tied to certain sectors and regions. A questionnaire carried out between foreign managers showed that these opportunities go together with high market entry barriers and high market risks. Therefore, this thesis pays special attention to potential risk treatment measures which take the position of foreign companies and the special characteristics of the Chinese water market into account. The paper contains six chapters. After an analysis of the business environment of the Chinese water service market, the thesis describes business opportunities for foreign companies. Afterwards potential risks for foreign investors are discussed and measures for a strategic risk treatment introduced.
Although accounting for about 20% of the global population, the People’s Republic of China (PRC) is endowed with only 7% of the world’s water resources. The country faces severe water scarcity, high levels of urbanization and population growth, and climate change. For the PRC’s continuing development, it must protect and develop its freshwater resources. This publication provides recommended policy initiatives to ensure the PRC’s 13th Five-Year Plan (2016–2020) contributes to significant improvements in national water security, particularly in extreme water-scarce provinces. Some actions proposed for increased water security are better water resources management, more cross-sector planning, deeper reform of the water pricing system, and creation of water markets.
This report reviews China's water scarcity situation, assesses the policy and institutional requirements for addressing it, and recommends key areas for strengthening and reform. It is a synthesis of the main findings and recommendations from analytical work and case studies prepared under the World Bank Analytical and Advisory Assistance (AAA) program entitled 'Addressing China's Water Scarcity: from Analysis to Action.' These studies focus on several strategically important thematic areas for China where additional research was needed, as identified by the research team and advisory group based on a review of pressing issues. These areas are governance, water rights, pricing, ecological compensation, pollution control, and emergency response. The approach has been to evaluate Chinese and international experience to identify policy and institutional factors that have proven effective in promoting the adoption of water conservation and pollution reduction technologies. The research was based on literature reviews, qualitative and quantitative policy analyses, household surveys, field trips, and case studies to develop feasible recommendations for a plan of action based on realities on the ground.
Master's Thesis from the year 2007 in the subject Business economics - Offline Marketing and Online Marketing, grade: 1,0 A, University of Hamburg, language: English, abstract: Since the beginning of the “Open-Door-Policy”, China has scored remarkable achievements. Its GDP has grown from 150 billion to 1.65 trillion USD and its per capita GDP from 190 to more than 1,200 USD. However, the resources that such growth demands have raised concerns about the long-term sustainability and hidden costs of the growth. Many of these concerns are associated with the state of Chinas water resources. As demand for water has increased, so too have problems with water shortages, pollution, falling groundwater tables and flood/drought damages. To tackle these challenges the Chinese government increasingly encourages foreign companies to engage in the Chinese water market. Market research studies claim that this market holds promising business opportunities for both domestic and foreign companies. This thesis questions this observation from a foreign investor’s perspective. It shows that the Chinese water market indeed holds business opportunities, but that these opportunities are mainly tied to certain sectors and regions. A questionnaire carried out between foreign managers showed that these opportunities go together with high market entry barriers and high market risks. Therefore, this thesis pays special attention to potential risk treatment measures which take the position of foreign companies and the special characteristics of the Chinese water market into account. The paper contains six chapters. After an analysis of the business environment of the Chinese water service market, the thesis describes business opportunities for foreign companies. Afterwards potential risks for foreign investors are discussed and measures for a strategic risk treatment introduced.