Water Trading

The pilot study on water trading in the Shiyang River Basin in China

Activities/Project Description

The study, supported by the project “Integrated river basin management: managing the threats to sustainable water resources development (AusAID ACEDP Program)”, “The key engineering technologies for ecology protection and water market development of Shiyang Basin, Gansu Province, China (Program of Ministry of Water Resources of China)” and “Key technologies of Water Internet (funded by Ministry of Science and Technology of China)”, aimed to establish a practical method, including the business rule, information flow, data sets and regulation system, to establish a web-based water trading platform in the Shiyang River Basin, which is one of the most arid catchment in the north-western China.

People involved

State Key Laboratory of Hydroscience and Engineering, Tsinghua University

Professor Wang Zhongjing; Professor Huang Yuefei; Associate professor Zhao Jianshi; Research Associate professor, Zheng Hang.

Joint Australia-China Research Centre on Water Catchment Management

Professor Peter Scale; Professor Andrew Western; Professor John Langford; Dr Yonping Wei; Mr David Lewis; Mr Clive Lyle.

The Management Bureau of Shiyang River Basin

Mr Yang Zhenghua, director of the bureau; Mr Chen Jiping, vice director of the bureau; Mr Ma Yanping, vice director of the bureau; Mr Cao Jinjun, manager of water resources; Mr Yang Jin, engineers.

Water Resource Bureau of Liang Zhou District, Wuwei City, Gansu Province, China

Mr Jing Zenian, vice director of the bureau; Mr Li Xuepeng, manager of water resources; Mr Zhang Lenian, head of the management department of Xiying irrigation district; Mr Lu Xuegang, manager of Xiying irrigation district; Mr Li Fuze, head of the management department of Qingyuan irrigation district; Mr Li Xiaoning, manager of Qingyuan irrigation district.

Progress made/to date

Up to December 2013, the web-based water trading system has been built and applied in two irrigation districts in the Shiyang River Basin: www.syh-watertrading.com

Currently, the system was designed to be used among rural water users associations which are basic water use units in Chinese irrigation districts. In Shiyang River Basin, the business flow of water trading includes trading application from water users associations, application review by various water authorities in the irrigations district, pool exchange, contacts, financial management and water delivery. All these businesses can be operated online by the system.

The web-based system can also be used to collect potential water trading information and finding the appropriate water seller and buyer. A pool exchange method (See: www.waterpoolcoop.com.au/index.php/2013-05-01-01-22-49) was used in the system to matching the potential water seller and buyer. In this method, all the trading applications are put in to a “water pool” before each irrigation round. The seller and buyer are linked according to the water volume and price they declared.

Moreover, a water account is established for each users of the system. The individual’s data of water allocation, water use and water trading can be updated periodically in the system Data management technologies such as data inquiry, analysis, frozen and so on in a bank system have been introduced and used in the water trading system.

In sum, the main functions of the system includes:

  1. Water account: each user is allocated a water account in the system to record their water right, use and trading.
  2. Trading application: user who logins in the system can submit a selling or buying bid (application)
  3. Application check(approval or rejection) : the application will then be checked by authorities
  4. Pooled Exchange: the qualified buyer and seller will be matched according to their bids.
  5. Tracking the payment and update water account.
  6. Publishing the histrical trading volume and price information.

The web-based water trading system has been preliminarily used by the farmers and water officials in the Shiyang River Basin. 7 trades (4 trades of surface water and 3 trades of ground water) has been reached through the system in 2013. The detailed progress is shown in Table 1.

Table 1: Main progress of the project

Date Progress Main Participates
2010.8 – 2011.8 Study on the water trading rules, policies and method in Australia Dr Hang Zheng; Professor John Langford; Dr Yongping Wei
2011.8.29 – 2011.9.7 Survey and study on the method of pooled exchanged water trading in the Watermove Lt.d, Melbourne. Professor Wang Zhongjing; Dr Hang Zheng; Mr Peter Langford
2012.1 – 2013.7 System design, website development and customer test Professor Wang Zhongjing; Dr Hang Zheng
2013.7.8 – 2013.7.13 Survey in the Shiyang River Basin and select the pilot irrigation areas Professor Wang Zhongjing; Dr Hang Zheng.
2013.9.8 – 2013.9.13 Data collection in the Shiyang River Basin and the web-site testing by farmers Mr David Lewis; Dr Hang Zheng; Miss Shang Wenxiu; Miss Wang Jun
2013.10.31 – 2013.11.8 Training of farmers and officials about the use of water-trading system; data collection and update. Dr Hang Zheng; Miss Xu Tingting; Miss Li Panwen
2013.11.14

Online trade of groundwater in the Qingyuan irrigation district.

  • Trades: Two
  • Water users association: Four
  • Average volume: 2300 m3
  • Price: 0.05 Yuan /m3
Mr Li Xuepeng; Mr Li Fuze; Mr Li Xiaoning; the leaders of water users associations
2013.12.2

Online trade of surface water in the Xiying irrigation district.

  • Trades: Four
  • Water users association: Seven
  • Average volume: 80000 m3
  • Price: 0.2 Yuan /m3
Mr Zhang Lenian; Mr Lu Xuegang; Mr Cao Jinjun; Dr Hang Zheng; the leaders of water users associations
2013.12.3

Online trade of ground water in the Qingyuan irrigation district.

  • Trades: One
  • Water users association: Two
  • Average volume: 6000 m3
  • Price: 0.03 Yuan /m3
Mr Li Fuze; Mr Yang Jin; Dr Hang Zheng; the leaders of water users associations

Future plans

  • Improve the system in terms of the structure, functions and interfaces in order to make it easier to use by the local farmers and officials.
  • Improve the trading rules of pooled exchanged and increase the adaptability of the system to couple with the current irrigation and rural water management process in the irrigation district.
  • Apply the web-based water trading system more widely and more frequently in the Shiyang River Basin. About 20 trades is expected to be operated through this platform in 2014.
  • Develop the water trading among individual famers. (the current trades are among the water users associations or villages)
  • Extend water trades between agricultural and industry water users; develop water trades among different irrigation districts and the relative rules.

Fig 1. The homepage of the system

Fig 2. The functions of the system

Fig 3. Training of using the system. Location: Xiying Surface Water Irrigation District, Shiyang RB. Data: 2013.11.1. Participates: officials from 6 WUAs, 4 water authorizes.

Fig 4. An officer of the irrigaiton management deparment was checking the tradng application online

Fig 5. Submiting the water trading application by the leader of Water Users Association. Location: Xiying Surface Water Irrigation District, Shiyang RB. Data: 2013.12.2

Fig 6. Sign and seal the trading contract prodeced by the system. Location: Xiying Surface Water Irrigation District, Shiyang RB. Data: 2013.12.2

Fig 7. The results of pooled exchanged in Xiying suface water irrigation district. Data: 2013.12.2

Fig 8. A contract of water trading conducted by the system. Data: 2013.12.2