To Save Water, China Lifts Price
In the past 50 years, China has gone from an aspiring Communist utopia to the land of a billion different business plans. But one constant has remained through the country's economic transformation: cheap water.
Now, facing acute shortages and a true threat to future growth, the Chinese government this year is ordering local water bureaus across the country to lift the price of water for the first time since the People's Republic of China was established in 1949. Officials believe it is a matter of national security.
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"China's water situation and economic security are very tightly linked," says Wu Jisong, a senior official at China's Ministry of Water Resources.
Among the many environmental strains created by China's economic growth, water problems are perhaps felt most acutely and widely. From memory-chip plants in Shanghai to grain growers in the nation's north, shortages are hindering production. Pollution poses health threats to wealthy urbanites and poor farmers alike. China's challenge is tied up in raising prices steadily enough to encourage people to conserve water and to entice foreign companies to help overhaul creaky facilities, but not so steeply as to fuel inflation and turn people against the government.
A long era of heavy subsidies has allowed industry and ordinary citizens to waste water with few economic repercussions. But under the government's new plan, local water bureaus this year will raise prices to what they deem the market can bear. Some have already started, and cities including Beijing, which is especially short of water, plan dramatic increases. Within two years, Beijing plans to lift the price of water to 54 cents a ton, or nearly double the price it is now. Changing the capital's habits is seen as crucial if Beijing is going to have enough water when it hosts the 2008 Olympics.
"We have two choices," says Mr. Wu, the water official. "Raise prices and generate income, or not raise them and continue to suffer from shortages."
Indeed, China is choking in a lot more places than Beijing. About two-thirds of China's cities are short of water, according to the Ministry of Water Resources. In the cities, 90% of China's rivers also are seriously polluted; in the countryside, 360 million residents aren't able to drink water that meets normal sanitation standards, and water tables in the arid north are dropping.
China's experiments with saving water go beyond lifting prices. The country is expanding water-rationing programs after test-piloting them in a handful of cities.
In the Southwest city of Mianyang, in Sichuan province, all water users receive a quota, and those that exceed it on a quarterly basis are charged higher prices. Some academics are also urging the government to allow farmers to sell the water they don't use, a trading system that has apparently popped up in scattered Chinese villages to alleviate the burden of high water prices. The most controversial project is also the biggest: an effort to channel water from the nation's largest rivers in the south to northern cities like Beijing and Tianjin. The South-to-North Water Transfer Project is expected to take 50 years to complete, at a cost of more than $60 billion.
"You never want to underestimate Chinese engineers," says Ma Jun, author of "China's Water Crisis." "But it is not a very sustainable solution when you aren't decreasing the demand for water and encouraging people to conserve it."
The waste is staggering, and costly. About 20% of China's urban water supply is lost through leaky pipes, according to the water ministry. That means China needs to consume about four times the world average to generate about $1,200 of gross domestic product. To produce the same amount, Chinese companies use five to 10 times more water than developed nations such as the U.S., the ministry says.
Spotting an opportunity, foreign companies have dived into China's water market, with mixed results. Among the most aggressive is Veolia Water, the water-management division of Veolia Environment SA, which has invested �400 million ($480.5 million) in 11 water projects in China. "We don't see any hurdles to expanding in China," says Stephan Truchot, project finance director, Veolia Water Asia, a unit of the French water giant.
Likewise, ITT Industries Inc. of White Plains, New York, sees the market tide going its way. The company is supplying pumping equipment to projects ranging from the massive Three Gorges Dam to the relatively minuscule municipal water projects. As a result, ITT sees China as its fastest-growing market, with sales up 55% last year from a year earlier, with a similar pace expected this year. By 2006, ITT expects to be earning $500 million a year in China, according to Mark Steele, ITT's country chief.
"The price rise is going to encourage more infrastructure investment," he says.
At the same time, the experience of other foreign companies points out the hazards of an evolving market and the difficulty of profiting from government-run projects. Britain's RWE Thames Water, the world's third-largest water provider, earlier this month said it was pulling out of a money-losing water treatment plant in Shanghai. The retreat followed the government's decision to end a policy that guaranteed a 15% fixed rate of return on such projects.
"Foreign companies are obliged to share the risks," says a spokesman for Shanghai Water Assets Management & Development Co., which oversees the industry. "Of course, their profits are slim at this moment with such low water prices, but the situation will improve."
Some people say the moves are too little, too late. The prices are still too low and don't prod some of the biggest industrial users of water to find innovative ways to conserve, argues John McAlister, whose company, Aqua BioTronic.com, is trying to interest local governments in high-technology water-recycling equipment. "Keeping prices low at less-than-prudent levels is a central fact of the Communist Party and isn't going to be easy to change," Mr. McAlister says.
Chinese officials acknowledge that water prices are politically sensitive and that the market is still immature. Change will come gradually, says the water ministry's Mr. Wu. "The state will continue to control prices," he adds. "Water rights are human rights."
面临水荒威胁 中国上调水价
五十年弹指一挥间，中国已经从激情洋溢的共产主义乌托邦时代进入了一个全民皆商的时代。但在中国经济的这一巨变中有一件东西却保持了原样，那就是廉价的水资源。
当前，中国经济的持续发展正面临著严重的水荒威胁。今年中国政府下令，让各地水利局全面上调水价，这可是新中国成立以来破天荒头一次。政府官员认为，这是一件关系到国家安全的大事。
中国水利部(Ministry of Water Resources)水资源司司长吴季松说，中国的水资源状况与经济安全密切相关。
在中国诸多因经济增长而产生的环境问题中，水资源问题大概要算危害程度最深、影响范围最广的一个了。不论是上海的存储晶片生产厂，还是中国北方主要粮食产区，水资源不足都给它们的生产带来了很大压力。人无论贫富，都面临水资源被污染而构成的卫生威胁。而政府面对的挑战是，一方面要稳步上调水价，这个价格要足以促使居民积极节约用水，并吸引外国公司涉足困境重重的水处理行业；另一方面，价格又不能大幅上涨，否则不但会引发通货膨胀，还有可能引起民众对政府的反感。
中国的供水系统长期以来都享受著政府的巨额补贴，企业和普通居民普遍缺乏节水意识。但根据新的政府计划，地方水利局今年会普遍上调水价，上限是市场能够承受的最高限度。北京等水资源极度短缺的地区已经开始规划大幅上调水价的步骤了。北京市计划在两年内将水价升至每吨54美分左右，升幅将近一倍。如果在主办2008年奥运会的当年，北京仍然能提供充足的供水，那么人们就要及时改变当前的用水习惯。
水利部的吴季松说，面前只有两条路，要么涨价并促使供水系统赢利，要么不涨价而视水荒如无物。
实际上，中国严重缺水的地区远不止北京一处。水利部的数据显示，全国三分之二的城市都供水不足。此外，90%的城市河道已被严重污染，3.6亿农民没有清洁的饮用水，在历来乾旱的北方地区，地下水位不断下降。
涨价并非中国节约用水的唯一手段。逐步推广合理用水计划也是措施之一，这个项目已经在部分城市进行了试点。
例如，四川省绵阳市每位用户都有一个配额，每季度用水超过配额的用户都要缴纳高额水费。一些学者还敦促政府允许农民出售闲置水源，这种做法在中国某些农村地区已经零星出现，它有助于缓解高额水费带来的沉重负担。最受争议而且规模浩大的项目就数南水北调工程了。该项目预计耗资600多亿美元，历时50多年将南方江河的水引到北京和天津等北方城市。
《中国水危机》(China's Water Crisis)一书的作者马军说，如果不鼓励人们节水，减少水资源需求的话，南水北调这样浩大的工程也无法持久解决缺水问题。
中国的水资源浪费十分惊人，代价沉重。水利部的数据表明，城市供水系统的各处泄漏就使20%的水白白流掉了。这意味著中国每创造1,200美元GDP所耗费的水资源高达全球平均水平的四倍！与美国等发达国家的企业相比，中国公司要多消耗5-10倍的水资源才能创造出同样的产值。
不少外国公司已开始涉足中国的水资源市场，试图从中寻找机会，但结果却不尽相同。表现最积极的是Veolia Environment SA旗下的水务管理子公司Veolia Water，它已经在中国各地的11个水务项目上投资了4亿欧元（合4.805亿美元）。Veolia Water Asia的项目财务主管特吕绍(Stephan Truchot)说，该公司在中国的业务拓展没遇到什么障碍。
美国的ITT Industries Inc.也认为市场环境有利。该公司主要提供各类抽水设备，涉足项目大到三峡大坝(Three Gorges Dam)，小到各地市的水处理项目。中国是ITT眼中一个迅速发展的市场，该公司去年在中国市场的销售额较上年激增55%，今年也有望实现类似增幅。ITT主管中国市场的斯蒂尔(Mark Steele)预计，到2006年中国业务的年利润可达5亿美元。
他说，水价上涨会促使更多投资涌向水利基础设施项目。
但其他外国公司的经历则显示，刚刚起步的中国水务市场依然障碍重重，而从政府主导的各个水处理项目上赢利也存在困难。本月初，全球第三大水务公司，英国的RWE Thames Water表示，它将从上海一家亏损的污水处理厂撤资。不久前，政府刚刚撤销了保证这类项目获得15%固定投资回报的政策。
上海水资产管理和开发公司(Shanghai Water Assets Management & Development Co.)的发言人称，外国公司也应当承担风险。他说，现在水价这么低，外国公司的利润当然也很薄，但情况会不断改善。该公司负责监管上海市的水处理产业。
有人认为政府采取的节水措施力度太小，实施的也太晚。Aqua BioTronic.com的麦卡利斯特(John McAlister)就说，现在水价还是太低，大型企业用户根本没有动力去寻找各类有创意的节水方法。该公司提供各类高科技的水处理设备，正试图吸引地方政府对这类设备的兴趣。他说，将水价保持在远远超过谨慎所需的低水平是当前政策的一大特色，这不容易改变。
中国官员也承认，水价是一个政治敏感问题，市场远远不够成熟。水利部的吴季松说，只能逐步进行调整，国家仍将控制水价。他最后说，用水权也在人权范畴之内。
