A Study On The Institutional Innovation Of China Water Industry Development

China’s urban water industry began market-oriented reforms since November2000. It proved that introducing a wide range of investors and professional management companies to enter the water market made good effect for solving the problem, inadequate investment and low efficiency of water infrastructures. However, it’s still very arduous to develop China’s water industry. At the same time, people debate heatedly about the reform directions and roads of the water industry during the reform process. Therefore, it undoubtedly has the theoretical and practical significance to explore the market-oriented reform directions and roads of China’s water industry.This dissertation in uses science development view theory, public goods theory, externality theory, natural monopoly and regulation theory, industry organization theory. According to technical and economic attributes of the urban water industry, I research the systems building of China’s water industry, which includes industrial organization, financing models, water regulation systems, especially the price control systems from the perspective of system innovation. At the same time, this paper analyzes the development direction of the new water industry.This paper is organized as follows:The first chapter is the first part of this paper. This part introduces the background, significance, the basic ideas and main content of the research of China’s water industry.The second chapter is the second part of this paper. This part put forward the basic principles with the basic theory of water industry development, which we should follow during the process of developing China’s water industry. This paper analyzes the products’ services and technology economic characteristics of the urban water industry according to science development view theory, public goods theory, externality theory, natural monopoly and regulation theory, The products’services of the urban water industry is quasi-public goods, public resources. It has strong externalities and natural monopoly, close contact with the public health and safety. These theories become the starting point and foundation to analyze forms of organization, financing models, regulatory system, price mechanism of urban water industry.The third part consists of Chapter3, Chapters4and5. Chapter3analyzes the organization forms of water industry. It points out we must change the organization forms of urban water industry and use market forces, which can promote the water industry to achieve four integration, which includes water supply-drainage integration, investment-construction-operation integration, river basin integration, urban-rural integration. Chapter4analyzes financing models of water industry. This chapter points out that we should implement property rights reform, expand financing channels actively, improve investment principals of water industry. While, we can’t ignore the investment and financing functions based on the government’s policy. And we should support the development of investment funds of water industry vigorously. Chapter5discusses changes in the regulatory regime of the urban water industry in detail. We should strengthen economic regulation, technical regulation and environmental regulation mainly. To strengthen economic regulation, we should control market access, investment and price strictly. And water price, cost regulation should take into account the operator and the public with the principle of a reasonable profit in market, too. At the same time, the government should properly carry the ultimate responsibility and fair market regulator responsibilities, increase the transparency of the work, protect the public’s right to know the government’s decisions.The fourth part is the empirical analysis. Chapter6analyzes Wuhan Water Project-Governance Mechanisms of Urban Water Environment Based on the Externality theory This part points out we can use the market mechanism, the company operation, innovation and investment, operation and management mechanism to improve efficiency, even for the public welfare such as the urban water environment improvement.The fifth part is the part of international comparison. Chapter7compares the British, French and American systems of urban water industries and receives a four-point revelation, which is water industry should adhere to market-oriented, water industry should be developed according to law, we should take the integrated river basin management, we should establish of a sound monitoring system of water industry to adapt to the market economy. The eighth chapter is the sixth part of this paper. This part gives proposals of the development of China’s water industry in seven areas, and make a prospect of new water industry. And this part analyzes water resources finance and function water industry.The main innovation of the thesis is as follows. This paper makes new understanding for the meaning and definition of water industry, proposes a new definition "Extension water industry", which is good for grasping the development direction of the industry accurately. At the same time, this paper researches systematically the institutional systems of the development of water industry from industrial organization, investment and financing systems, monitoring systems, water price formation mechanism.This paper analyzes empirically the system innovation of water environment improvement, which includes corporate system of projects’owners, compensation mechanism of projects’cost, dual-generation system of environmental projects, during the market-oriented process with the case "Wuhan Water Project". And this paper makes some further thoughts about the investment, operations and management of welfare projects.