publication November 7, 2018

Watershed: A New Era of Water Governance in China


Watershed: A New Era of Water Governance in China represents a turning point, providing a practical set of recommendations to inform Government’s ongoing institutional reforms related to water management in the era of an ecological civilization. By providing a comprehensive overview of the key challenges and a systematic evaluation of the current context of water management, it provides a practical set of tools and policy recommendations to further enhance water governance in China. China’s experience in managing the development of water resources in the face of scarcity also provides important lessons for other economies and informing efforts to address global around water risks to economic progress, poverty eradication, and sustainable development.

Recommendations for Water Governance in China

Priority 1: Enhance the legislative foundation for water governance. Many of China’s most important water sector reforms are based on, but not specifically mentioned in, existing legislation. It is essential that China codify recent major existing principles and reforms into laws to send strong policy signals to local officials and enterprises that compliance will be taken seriously. China should take several steps to enhance the legislative foundation for water governance, including; (i) Update the 2002 Water Law; (ii) Strengthen enforcement of existing water quality standards; and, (iii) Codify and strengthen the role of public-private partnerships.

Priority 2: Strengthen national and basin water governance. A fundamental challenge for water resource management is that many issues, including pollution and water resource allocation, are inherently inter-jurisdictional. These issues are shaped more by the boundaries of watersheds than political and administrative jurisdictions. Better integration across policy areas is needed to achieve policy objectives such as the Three Red Lines. Strengthened national and river basin entities can help to ease coordination problems and promote cooperation horizontally (i.e., across sectors) and vertically (i.e., across administrative levels). These can be achieved by: (i) Creating a national coordinating mechanism for water governance; (ii) Strengthening the existing river basin commissions to meet the emerging challenges; (iii) Establishing clear coordination between the provincial River and Lake Chief System and existing river basin commissions.

Priority 3: Improve and optimize economic policy instruments. China’s ambitious policy reform agenda has created multiple (and at times overlapping) sets of economic policy tools whose use and application need to be coordinated for maximum effect. Different prices, taxes, and fees are levied on water users to encourage conservation, capture externalities, and move closer toward cost recovery. Some policies currently being piloted (e.g., tiered pricing, water rights trading) can be expanded and represent global models. Further empirical research is however needed to assess the effectiveness of these instruments to optimize their impact. Recommended actions include: (i) Expanding the use of economic policy instruments to promote more sustainable water use; (ii) Strengthening the effectiveness of the Three Red Lines; and, (iii) Cross-referencing water withdrawal permits and pollution discharge permits.

Priority 4: Strengthen adaptive capacity to climate and environmental change. Macro-scale pressures, including increasing urbanization and climate change, will require China’s policy makers to strengthen the resilience of both human and ecological water systems to flooding, drought, and other forms of environmental change. While drought will likely continue to impose significant economic costs on parts of China, future flooding may be an even greater challenge considering China’s rapid urbanization and the increasing numbers of people at risk from coastal and inland flooding. At the same time, additional investments must be made to preserve the functioning of aquatic ecosystems and the services they provide. Fully addressing these challenges will be essential to meeting China’s policy objectives with respect to improving the water ecological environment, requiring coordinated joint efforts by relevant authorities at both central and local scales. These can be addressed through: (i) Strengthening resilience to floods; (ii) Exploring Red Line targets for ecological water flows; (iii) Sharpening the policy focus on non-point source pollution.

Priority 5: Improve data collection and information sharing. China possesses strong technical capabilities in water resource data collection and monitoring. However, these rich data-sets need to be more widely shared, particularly across government agencies, and better incorporated into decision-making processes. Greater incentives and more effective data sharing mechanisms are required among government agencies and between agencies within basins to share data and information. This is particularly important following the institutional reforms and provides opportunities to develop and support coordination through integrated information management systems that are based on complete, accurate and consistent data across the national, basin and local scales. Open data platform approaches can help to foster coordination and collaboration across agencies and will support entrepreneurship, innovation, and scientific discovery in the water sector. These outcome scan be enhanced by: (i) Improving the legislative framework for producing and sharing water-related data; (ii) Creating a National Water Information Sharing Platform; and, (iii) Strengthening the role of public awareness and participation.