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7 Water Pricing
China has been implementing water pricing reform since the late 1970s, when
it adopted a reform and opening policy to develop a market-oriented economy. For
nearly 40 years, questions concerning water pricing and how to reform it to better
price water resources and their services improve allocation, promote sustainable
development, and support rapid social and economic development which have been
at the center of China’s water policy (Central Committee of CPC 1982; State Council
2011; National Planning Commission 1997; NDPC 2000; MWR 2014; NDRC 2018).
7.1 Water Pricing Framework in China
Judging from water-related legislation, China has developed a comprehensive water
pricing framework over almost 40 years. Five fees and charges related to resources,
services, and environmental issues are included in the framework: the water resources
fee/tax, the water supply tariff from hydraulic engineering, the urban water supply
tariff, the wastewater collection and treatment tariff, and the pollutant discharge
fee/tax (Shen 2015).
7.1.1 Water Resources Fee/Tax
The water resources fee pertains to resources charges. The fee is collected according
to payment for water resources use, as defined in the 1988 Water Law and subsequently in the revised 2002 and 2016 Water Law, and is utilized specifically to facilitate water resources saving, protection, management, and development (Ministry
of Financing et al. 2008). The fee is charged on the actual volume used by water
abstraction permit holders, who directly divert water from rivers, lakes, and aquifers
other than collective ponds for purposes except domestic use, watering livestock with
a small quantity and emergencies.
The collection standard is formulated by the provincial pricing department with the
financial department and water department and approved by the provincial government. Of which, those for central and cross-province projects with permits approved
by RBOs are defined by the pricing administrative department with the financial department and water department of the State Council (State Council 2006).
The differential standards are required to promote water resources development,
use, saving, and protection; to accommodate with local water resources and socioeconomic development; to coordinate the development of surface water and groundwater and prevent groundwater overdraft; and to consider the sectoral differences in
water supply purposes.
Currently, the water resources fee is levied for industrial, domestic, and
hydropower uses, based on the actual use and the standard at the abstraction site. If
such use exceeds the annual abstraction plan, an overcharge will be applied. The fee
7 Water Pricing
China has been implementing water pricing reform since the late 1970s, when
it adopted a reform and opening policy to develop a market-oriented economy. For
nearly 40 years, questions concerning water pricing and how to reform it to better
price water resources and their services improve allocation, promote sustainable
development, and support rapid social and economic development which have been
at the center of China’s water policy (Central Committee of CPC 1982; State Council
2011; National Planning Commission 1997; NDPC 2000; MWR 2014; NDRC 2018).
7.1 Water Pricing Framework in China
Judging from water-related legislation, China has developed a comprehensive water
pricing framework over almost 40 years. Five fees and charges related to resources,
services, and environmental issues are included in the framework: the water resources
fee/tax, the water supply tariff from hydraulic engineering, the urban water supply
tariff, the wastewater collection and treatment tariff, and the pollutant discharge
fee/tax (Shen 2015).
7.1.1 Water Resources Fee/Tax
The water resources fee pertains to resources charges. The fee is collected according
to payment for water resources use, as defined in the 1988 Water Law and subsequently in the revised 2002 and 2016 Water Law, and is utilized specifically to facilitate water resources saving, protection, management, and development (Ministry
of Financing et al. 2008). The fee is charged on the actual volume used by water
abstraction permit holders, who directly divert water from rivers, lakes, and aquifers
other than collective ponds for purposes except domestic use, watering livestock with
a small quantity and emergencies.
The collection standard is formulated by the provincial pricing department with the
financial department and water department and approved by the provincial government. Of which, those for central and cross-province projects with permits approved
by RBOs are defined by the pricing administrative department with the financial department and water department of the State Council (State Council 2006).
The differential standards are required to promote water resources development,
use, saving, and protection; to accommodate with local water resources and socioeconomic development; to coordinate the development of surface water and groundwater and prevent groundwater overdraft; and to consider the sectoral differences in
water supply purposes.
Currently, the water resources fee is levied for industrial, domestic, and
hydropower uses, based on the actual use and the standard at the abstraction site. If
such use exceeds the annual abstraction plan, an overcharge will be applied. The fee