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5 Water Resources Allocation and Regulation
to the water resources allocation framework, water rights trading mainly takes the
following forms (Article 3):
(1) Regional water rights trading: local governments or authorized agencies transfer
surplus water volume in total water use control volume, river basin water
resources allocation plan in the river basin, or across basin regions with water
delivery conditions.
(2) Water abstraction rights trading: a unit or individual who has obtained the water
abstraction rights (including water abstraction rights holders from the industrial, agricultural, and service industries, with the exception of urban public
water supply enterprises) by saving water through adjusting products and industrial structures, improving technology and processes, or adopting water-saving
instruments transfers the corresponding water abstraction rights to other eligible
units or individuals within the valid period of the water abstraction permit and
water abstraction volume.
(3) Water rights trading between irrigation water users: water rights are transferred
between irrigation water users or water use organizations with clear water rights.
These types of transfers also happened before the legislation. The agreement
reached in 2000 between Dongyang and Yiwu Counties is widely regarded as China’s
first example of a regional water transfer. The counties are both located in the Jinhua
Prefecture in Zhejiang Province in China’s wet southeast. In December 2000, the
regional governments of Dongyang and Yiwu signed a contract whereby Dongyang
agreed to supply Yiwu with 50 million m
3 of water per year from the Hengjin Reservoir in Dongyang. The contract provided for “the permanent transfer of the water
use right” for 50 million m
3 in return for a lump sum payment to Dongyang of 200
million RMB. Dongyang retained ownership of the reservoir as well as operational
and maintenance responsibilities, fixing an operation and management fee of 0.1
RMB per m
3 payable by Yiwu and calculated based on the actual volume of water
supplied each year. Several other similar regional transfers, via contract, have also
occurred in Zhejiang Province. Cixi County has signed separate agreements with
both Yuyao and Shaoxing Counties (Jiang 2018).
The Liyuan Irrigation District in the Hei River Basin in Gansu Province in Northwest China is a typical example of water trade among users in the irrigation district.
Within the district, water certificates are issued to individual households showing
the allocation assigned to the household and the conditions for use. Allocations are
assigned annually using a water ticket system. Individual farmers purchase water
tickets from the irrigation district management agency (or the local WUA) for each
irrigation cycle. The volume they can purchase is limited by the volume on their
water certificate and the annual volume available to the district that year. The water
tickets are then submitted to the local irrigation district officials prior to water being
delivered, via the channel system, to their farm. Water tickets may be traded freely
and easily as they are not user- or location-specific. Farmers can sell their water
tickets (but not water certificates) to other farmers in the district, and no administrative approval is required. In practice, there have been few instances of water
5 Water Resources Allocation and Regulation
to the water resources allocation framework, water rights trading mainly takes the
following forms (Article 3):
(1) Regional water rights trading: local governments or authorized agencies transfer
surplus water volume in total water use control volume, river basin water
resources allocation plan in the river basin, or across basin regions with water
delivery conditions.
(2) Water abstraction rights trading: a unit or individual who has obtained the water
abstraction rights (including water abstraction rights holders from the industrial, agricultural, and service industries, with the exception of urban public
water supply enterprises) by saving water through adjusting products and industrial structures, improving technology and processes, or adopting water-saving
instruments transfers the corresponding water abstraction rights to other eligible
units or individuals within the valid period of the water abstraction permit and
water abstraction volume.
(3) Water rights trading between irrigation water users: water rights are transferred
between irrigation water users or water use organizations with clear water rights.
These types of transfers also happened before the legislation. The agreement
reached in 2000 between Dongyang and Yiwu Counties is widely regarded as China’s
first example of a regional water transfer. The counties are both located in the Jinhua
Prefecture in Zhejiang Province in China’s wet southeast. In December 2000, the
regional governments of Dongyang and Yiwu signed a contract whereby Dongyang
agreed to supply Yiwu with 50 million m
3 of water per year from the Hengjin Reservoir in Dongyang. The contract provided for “the permanent transfer of the water
use right” for 50 million m
3 in return for a lump sum payment to Dongyang of 200
million RMB. Dongyang retained ownership of the reservoir as well as operational
and maintenance responsibilities, fixing an operation and management fee of 0.1
RMB per m
3 payable by Yiwu and calculated based on the actual volume of water
supplied each year. Several other similar regional transfers, via contract, have also
occurred in Zhejiang Province. Cixi County has signed separate agreements with
both Yuyao and Shaoxing Counties (Jiang 2018).
The Liyuan Irrigation District in the Hei River Basin in Gansu Province in Northwest China is a typical example of water trade among users in the irrigation district.
Within the district, water certificates are issued to individual households showing
the allocation assigned to the household and the conditions for use. Allocations are
assigned annually using a water ticket system. Individual farmers purchase water
tickets from the irrigation district management agency (or the local WUA) for each
irrigation cycle. The volume they can purchase is limited by the volume on their
water certificate and the annual volume available to the district that year. The water
tickets are then submitted to the local irrigation district officials prior to water being
delivered, via the channel system, to their farm. Water tickets may be traded freely
and easily as they are not user- or location-specific. Farmers can sell their water
tickets (but not water certificates) to other farmers in the district, and no administrative approval is required. In practice, there have been few instances of water