Water investment in China

A loooong piece by Hu Yusha in China Dialogue: Politically ambitious regulations in China have created wastewater-discharge standards that are comparable to those in developed countries. Accordingly, the level of technology and the operational knowledge and management required to meet these standards is significant. By raising standards and, eventually, requiring compliance, the government is creating demand for advanced wastewater-treatment technologies. This, somewhat paradoxically, creates another challenge for China’s water sector development.

….While China does not have the capacity to completely replace foreign vendors, especially in the manufacturing of advanced water-treatment technology, there has been a concerted effort to set limits and encourage domestic innovation wherever possible. In 2006, the Ministry of Construction estimated foreign financing in the industry to be less than 10%. In contrast, foreign players constitute 40% of China’s automotive market.

This protectionist approach has its roots in the larger issue of national security. Because water is essential to China’s social stability, economic growth, food security and public health, it is itself a national security issue.

…A dynamic balance needs to exist between national security concerns and the benefits that foreign expertise and investment can bring. As the water market evolves, the optimal balance between these two competing forces will naturally shift, moving away from tightly controlled protectionism towards a competitive market.

…In the long term, China has no choice but to become a global leader in water infrastructure and water technology. The policy imperative is very much backed up by an environmental ultimatum. Climate change threatens to place further pressure on water-stressed northern China, with changes to monsoon patterns reducing rainfall in the parts of the country that are already under the biggest strain…..

A postcard from 1900 in China -- pumping water by foot power. Sometimes my photo research is out of date