Water Supply in China

China is now receiving more water and waste private investment that any other country in Asia, although its cumulative total of investment is still behind that of Malaysia or the Philippines. By the end of 2011 China has received 87% of the private investment projects in Asia and 32% of the value. 359 PPI projects had been carried out in the water sector by the end of 2011, worth $9.5 billion. Although the numbers of projects are much smaller, a few very large ones, including the largest privatisation project in the world at the time, are located in Malaysia and the Philippines. In the last six years there has been a steady build up of PSP in China, whereas in Malaysia it has mostly taken place in 1993, 2000 and 2004. In the Philippines, 93% of total PSP took place with 3 projects in Manila in 1997. In most countries there have been peaks when large projects have been carried out but in China there has been a steady expenditure totalling $4.4 billion in the last five years. In 2011 alone, 75% of all projects in developing countries were in China, consuming 22% of total investment.

China is facing a water crisis and this is recognised at the highest level of state. As a service in a communist state, water has been regarded as a social rather than an economic good and the funding source is from the government. Investment and maintenance decisions often have political influence. Before China opened its doors to the outside world and undertook economic reform, urban water supply and sewerage services were provided as municipal public works, which were constructed, managed, and run by the agencies or the departments directly affiliated with the government. Water supply and drainage in PRC is classified as an important industrial sector, which should be controlled by the state-owned economy.