Economy

Markets

Industries

Insights

Reports

Events

Hike in water charges increase protests

(China Daily)
Updated: 2009-08-17 17:33

A number of Chinese cities raised water prices during the first half of this year, and others are holding public hearings about following suit.

China's per capita water resources equal only one-fourth of the world average, and two-thirds of China's cities are suffering from water shortages.

The National Development and Reform Commission, the country's top economic planner, recently published a document to support water price hikes as a way to conserve more water.

The news about higher water fees created a huge stir among netizens. Sina.com, China's largest Internet portal, received nearly 30,000 comments from netizens by Aug 4. An online survey at www.people.com.cn shows that more than 60 percent are opposed to the hike.

Some agreed that raising water prices can help prevent wasting water. But others said that since water is a basic need and the amount of water usage in each family is usually stable, raising fees will not be an effective way to curtail water usage. Instead, they suggest adopting progressive water price policies.

Experts and netizens expressed their views in blogs and on the websites of China Business Journal and ifeng.com:

PROS

Zhang Liao, general manager of Shanghai-based Jumbo Consulting

"Water prices should be raised. Water usage used to be treated as a welfare benefit. But as the water industry gradually embraces the market economy system and people's incomes rise, water price hikes are inevitable."

CONS

Li Muqun, researcher at Samsung Economic Research Institute China

"Saving water is the only rational reason for raising water charges. It is not right to translate the costs of constructing wastewater treatment facilities and renovating water plants into higher water prices. These are just one-time expenditures, but higher water prices will generate continuous profits.

It is absolutely groundless to improve the business of water plants by raising prices. They are losing money because of their overstaffed teams, backward management and even corruption.

Third, raising water prices will have a huge impact on low-income families. Water still belongs to public utilities, and we should take these people's conditions into account."

Related readings:  Rise in water price should be justified  Water price 'needs to shoot up'

Fu Tao, director of the Water Policy Research Center at Tsinghua University

"Not all water companies are losing money. More than 3,000 water companies I studied are still profitable or at least can break even. Many of them only appear to be in the red on the account books.

They can cook the books by allowing abnormal fixed-asset depreciation and transferring their profits to their subsidiary businesses. Water companies are usually overstaffed, which also increases their costs."

Netizen from Hunan province

"Poor people are already saving water. They have to save on everything. Raising water prices will only increase their living expenditures and have no impact on rich people."

Netizen from Fujian province

"I strongly support progressive water prices. An option is to set up a quota for monthly water usage for each family. People will have to pay higher prices if they exceed the quota."