Chapter 13
Water Resource Assets Management
Reform
Abstract This chapter analyzes the water resources asset management reform,
which aims to develop the water resources ownership rights system in China. The
policy framework and key reforms are discussed. The influences on water resources
management are examined. The fundamental role of water resources asset management reform is to separate property rights and management power, and further ownership rights and usufructuary rights, by developing and exercising ownership rights.
The reform will have a long-term impact on resources development and usage. The
significant strengthening of state ownership rights and their benefits develops the
basis for resources tax and fee levying as owner’s benefits and increases the potential benefits for usufructuary rights transfer from the owner. The enriched usufructuary rights provide more options to allocate water resources by market mechanism.
However, the Ministry of Natural Resources, as an administrative department and an
organ of the State Council, exercising ownership rights on behalf of the state may
conflict with its management functions. At the same time, the problem exists in the
central and local relationship.
Keywords Water resources assess · Water resources asset management · Water
resources ownership rights system · Conflict of MNR
13.1 Introduction
Under a water rights system, a water resources management system has two components: administrative power and the property rights of water resources. Administrative power over water is a public right, while property rights are privately owned
rights. Therefore, to avoid a conflict of interests, the power and rights should not
be held by one agency; otherwise, rent-seeking between the two components could
result in lower efficiency of resources allocation.
In China, the Constitution decrees that natural resources, including the water flow,
are owned by the state and are, therefore, the public. Article 3 of the 2002 Water Law
stipulates that water resources are owned by the State, and the ownership rights of
water resources are exercised by the State Council on behalf of the State. However, the
owner and the ownership rights and benefits have not been codified. Institutionally,
© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021
D. Shen, Water Resources Management of the People’s Republic of China,
Global Issues in Water Policy 26, https://doi.org/10.1007/978-3-030-61931-2_13
275
Water Resource Assets Management
Reform
Abstract This chapter analyzes the water resources asset management reform,
which aims to develop the water resources ownership rights system in China. The
policy framework and key reforms are discussed. The influences on water resources
management are examined. The fundamental role of water resources asset management reform is to separate property rights and management power, and further ownership rights and usufructuary rights, by developing and exercising ownership rights.
The reform will have a long-term impact on resources development and usage. The
significant strengthening of state ownership rights and their benefits develops the
basis for resources tax and fee levying as owner’s benefits and increases the potential benefits for usufructuary rights transfer from the owner. The enriched usufructuary rights provide more options to allocate water resources by market mechanism.
However, the Ministry of Natural Resources, as an administrative department and an
organ of the State Council, exercising ownership rights on behalf of the state may
conflict with its management functions. At the same time, the problem exists in the
central and local relationship.
Keywords Water resources assess · Water resources asset management · Water
resources ownership rights system · Conflict of MNR
13.1 Introduction
Under a water rights system, a water resources management system has two components: administrative power and the property rights of water resources. Administrative power over water is a public right, while property rights are privately owned
rights. Therefore, to avoid a conflict of interests, the power and rights should not
be held by one agency; otherwise, rent-seeking between the two components could
result in lower efficiency of resources allocation.
In China, the Constitution decrees that natural resources, including the water flow,
are owned by the state and are, therefore, the public. Article 3 of the 2002 Water Law
stipulates that water resources are owned by the State, and the ownership rights of
water resources are exercised by the State Council on behalf of the State. However, the
owner and the ownership rights and benefits have not been codified. Institutionally,
© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021
D. Shen, Water Resources Management of the People’s Republic of China,
Global Issues in Water Policy 26, https://doi.org/10.1007/978-3-030-61931-2_13
275