Water trading ‘the key’ to Chinese water crisis

The Interim Measure for Water Quantity Allocation, which came into effect in February, sets out the principles, mechanisms and practices for water allocation across the country.

Experts at the US-based environmental research organisation the Worldwatch Institute said the rules could reverse the trend of water scarcity and pollution by opening Chinese markets for water trading.

The availability of fresh water per head of population in China is only one quarter of the world average, while water use per unit of GDP was four times the world average.

Yingling Liu, manager of the Worldwatch Institute’s China Programme, said: “The traditional practices of promoting conservation through education, moral persuasion, and technological innovation are no longer able to keep up with China’s rising water demand.

“By allocating water rights and introducing market-based tools, the new regulation may accelerate progress toward water saving, protection, and pollution control.”

Ms Liu said that there have been several successful trial efforts of water trading in the past eight years.

In 2000, Yiwu City in Zhejiang province agreed a deal to buy 50m cubic metres of water every year from Dongyang City, saving on the cost of having to build its own reservoirs while Dongyang was able to use the funds to maintain its water infrastructure.

There have also been trials in several regions, including Inner Mongolia and Beijing.

Ms Liu added: “The success of these projects has given policymakers confidence to explore bolder national schemes, resulting in the recent water-rights regulation.

“If effectively enforced, the ruling could be as significant as China’s widespread land reforms in the 1950s, which freed up rural labour and made it possible to feed the nation’s 1.3bn people.

“Although much implementation work remains to be done, the regulation is a bold first step toward sound water management in China.”

Kate Martin