Restructuring water industry in China: towards sustainable urbanization

In its urbanization course, China is faced with a scarcity of water resources in terms of both water quantity and quality. The development of water industry is a fundamental way to alleviate water shortage. Influenced by the traditional planned economy, China's urban water industry has been mainly owned and run by local municipal governments. Their tight fiscal budgets have led to very inadequate investments in water industry and thus, caused a slow development of water industry. In this case, restructuring urban water industry is very important. Based on the discussion concerning the trend of demand for and supply of urban water resources, this paper explores such strategic issues as water ndustry organization and integrated approaches addressing water scarcity. These are followed by a discussion of introducing market mechanism for restructuring water industry. Keywords water resource, restructuring water industry, investment, water price, government's role.