Smart city

Public-Private Partnerships will drive water technology innovations in China

  • 06 Jul
    2017

No one can deny the fact that water resources in China are very limited. Public-Private partnerships will lead to massive investments in this industry.

According to a United Nations’ report, China’s per capita availability of water is only about 1/4 of the world's average level, making it one of the poorest countries in terms of water availability in the world. Furthermore, water pollution situation in China is very serious: nearly half of the rivers and 40% of lakes in China are said polluted. The solution to these challenges could come from Public-Private Partnerships.

Although the concept is not new (it was developed in the 80's), since 2014, the Chinese National Development and Reform Commission and the Ministry of Finance have been increasingly promoting this economic model - that gives access to international and private companies to historical industry monopolies. 

As a matter of fact, in the end of January 2017, there were 10 828 PPP projects submitted and 21.55% of them were environmental protection projects. Among them, 80% were water pollution-related: sewage treatment, water environment comprehensive management and water supply system for cities… 

The advantage of PPP model is that this model can leverage not only social resources and funds but also government credit - which will definitely leads to the development of innovation in the sector. As the market is huge, the risk is quite low and there will be sustainable and stable cash flow in the future, many investors already saw the opportunity behind it. Thus, PPP model in the water service industry will be an important trend in the next years in China.