| Water right theory is the important base for practicing reasonable allocation of water resources. Under socialism market economy, it must be solved for water conservancy reform that studying and applying water right and water market theory deeply, exerting the function of market mechanism fully, realizing water resources optimum allocation and sustainable utilization and increasing the utilization efficiency of water resources. These problems are also the necessary approach for realizing modern water conservancy and sustainable development water conservancy.According to the modern property right economics, property right system has crucial effect on allocation of scarcity resources. Under socialism market economy, the most effective economic measure to solve water resources scarcity is to establish perfect water right trade market. In the market, water resources will be traded as merchandise, and the relationship between water supply and demand will be reflected by the price. In this way, the water resources optimum allocation can be realized.This article aims at the serious scarcity of water resources in our country and the status of outstanding contradiction between water supply and demand. Based on the conclusions at home and abroad, the new ideas and the new approaches to solve water resources problems in our country under the market economy will be practiced and studied. Water right, water right system and water resources values were studied in this article and the author paid more attention to the effect of water right theory on water resources optimum allocation. The Yellow River basin where water resources are serious scarce was chosen for primary analysis in the thesis. Water resources application status and characteristics of the Yellow River were analyzed. The objects and basic structure for establishing water right system were brought forward. The confirmation of basic water right and abundant water right of the Yellow River were also studied.
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