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Dr David Lewis: October 2014 Trip to China

Peter Scales and David Lewis were both invited to participate in the Chinese Hydraulic Engineering Society’s annual conference in Tianjin in October. The Society has a long history and 80,000 members. On the second day there was an international session, with interesting speakers from UK, Canada, Korea and Japan as well as China. Peter’s talk was on the extensive scope to reduce losses of water in delivery systems and on farms. David spoke about the major challenges in getting water markets like Australia’s to work in China.

David afterwards spent five days in the Shiyang basin of Gansu province, looking at the pilot water trading scheme driven by Prof Wang Zhongjing and Dr Zheng Hang of Tsinghua University. The very smart web application that Tsinghua has developed was being introduced to five new irrigation areas. Only one real trade took place this time, less than had been hoped for, which highlighted the hurdles to attaining an active water market.

  1. Water rights are inseparable from land — which itself is not privately owned but is allocated by the state for farmers’ use — so only trade of the current year’s water allocations is possible at present.
  2. Farmers have very small plots of land, serviced by canals that mostly don't have proper gates let alone meters.
  3. If trade is by water user associations — representing about 400 farmers — then the proceeds of a sale don’t go to those individual farmers who went without water, and the farmers in general are suspicious and angry.
  4. So far trade can only be quite local, so there is not a lot disparity in soils, crops and water needs to generate trade.

Some companies have purchased water rights by investing in infrastructure that saves water. This is not like a normal market, with lots of players and predefined rights. It is important in such cases that the savings are transparently verified to exist and to be permanent.

The Chinese government appears to be keen to pursue water trading. Certainly if water markets could be made to work properly in China, then as in Australia they could play a crucial role in driving the best possible use of a very scarce resource. Some of the hurdles remain very hard to get over though.

Panel at the Chinese Hydraulic Engineering Society's annual conference
Attendees at the conference

Group photo of people standing on steps
Peter Scales and David Lewis

People looking at computer monitors and discussing.