The Pricing Research Of Water Supplying In China

City's water supplying in China, as the pure public goods, has always been produced by the mode of state-owned and local government-operating. Water supplying is not been treated as commodity and executed the policy of low water price and high allowance, so the system of modulating price is not built according to market supply and demand and the cost's changing, which cause serious result of price deviating from value. The policy has encouraged to waste water, which cause not only shortage of water supplying and severe pollution but also the deficit of the water supplying enterprise.The promulgating of the decrees about the reformation of supplying water in China has not only strong guidance meanings to Chinese marketing reformation of supplying water, but also great function to promote the proceeding of marketing reformation. The marketing reformation whose target is price and measure is efficiency represents the general trend, which is the main trend for development of water supplying. Econometrics manifests that the mode of government independent and direct investment to provide water supplying cannot enough satisfy the development demand of Chinese society economy, moreover, the efficiency is also a big problem. On the other hand, too lower water price cannot really reflect the sparse degree of water resource, and that fee for sewage treatment in water price is far under treatment, so sewage treatment instruments lack suitable investment recovering system, which cause the coexistence of water resource's shortage and wasting, serious pollution of water environment and simultaneous existence of water shortage of resource and quality. The development background of water supplying also manifests that the fact that water price deviate from value cause the development level of water supplying lag the development of economic and society, so it is absolute to reform the pricing of city's water supplying.The city/s water supplying has the value which shows resource value property for the first and labor value property for the second. The value is the base of price, and the price is the currency representation of commodity value, so the city's water supplying possesses price. The west economics thinks that the market can modulate the decision of the economic body to keep balance between the consumers' purchasing and the manufactures' production because the price has significant regulation effect. So the essence of the city's water supplying is to make the water's price equal to its value and to modulate the production and consumer of the water supplying by price. Because city's water supplying has regional market monopoly, the theory basis to set supplying water's price is cost that provides the service of water supplying including water resource price, water engineering price and environmental price. Consequently, the paper compares and evaluates the pricing method whose basis is cost according to the standard of social equity, economic efficiency, maintaining the self development of company and sustainable development.The price policy of water supplying has been regarded as the means to achieve the country's development target and execute the water resource policy, including consuming water in high efficiency or economizing on water, repaying engineering investment and maintenance cost. A conclusion that water pricing is set according to efficiency and fairness can be made after summarizing the foreign countries' water pricing reformation, although that the price setting formulation, management policy and management power limit is different for different countries. The water pricing approach to its real cost to the greatest extent to recover the investment and meet the need for new construction, so the consumers must bear not only the cost of resource management but also the cost of sewage treatment. Moreover, the water pricing in foreign countries fully embodies the social equity and considers the consumers' acceptance. The successful experience of foreign countries' pricing provides our country with fine inspiration and lessons.Water pricing is vital to the success for the market reformation of Chinese cities' water supplying and the smooth development for water supplying industry. When checking the Chinese reformation process, a conclusion can be made that the reformation of investment and property right is the core of current water supplying industry's reformation because of great gap of construction capital, which mainly solves the capital shortage for investment, so the current reformation deviates from the main problem that forms rational pricing system of city's water supplying and the basic target of price. When comparing the foreign countries' successful reformation experience and further concluding Cities' water supplying pricing reformation in China, we can discover that not only the rational pricing system has not formed but also the reformation can not touch the pricing structure and system of water supplying. Consequently, the pricing reformation of water supplying must be perfected from the subject and object of pricing, reformation legislation, and other related supporting policy and so on.Econometrics manifests that the pricing reformation of water supplying in China is wholly feasible. The paper illustrates that the pricing reformation of water supplying in China must be based on the whole cost with the model of public domain tragedy and Cournot model. The pricing model is continuous to be devised as the development of economic theory. When concluding the model, we can find that all the models exist problem for some extent, any single model can not solve the pricing problem of water supplying, so comprehensive pricing model must be seek on the base of existing models to accommodate our country's innovation. Through the analysis of game model, the paper thinks that only when given the steady investment return that the investors can be attracted and encouraged to enter the water supplying industry. Further analysis of the game model indicates limited rational investors will damage the interest of the customers and make irrational investment action as to the whole society because of information asymmetry, so cost restriction must be made. The regulation's task is to moderate the investors' motivation of unlimited pursuing benefit by price regulation to safeguard the customers' interests.The pricing target of cities' water supplying in China can be concluded as follows: one is to make the water supplying company to gain from losses; two is to strengthen the driving force to save water; three is to enhance the ability of water quality treatment and water resource's protection and development; four is to fit for the sustainability of customers. According to those targets, the paper devises the model of resource pricing, original water pricing, water supplying pricing and customers' pricing on the basis of the social circulation of water supplying combining the pricing theory and the experience of external and internal pricing reformation. Water resource pricing model is to measure price of the water resource, which uses model to calculate the amount paid to the owner for right to use the water resource. The price of water resource is the money representation of the water resource's value, and the specific expression of using in pay. The water of the earth's surface and underground which are purified and disinfected to accord to national standard through engineering installation is called the original water of the city water supplying for consumers to use. So the price model of original water extends one step on the base of water resource pricing model, which includes the price of water resource and water purified. The pricing water of supplying water is to calculate the price when the purified original water are transported to the consumers for use through network of pipe lines, which is extended on the basis of the pricing model of original water. The pricing model of consumers is the complete pricing model of water supplying, which is measure the price of water supplying including the fee for sewage treatment. This models which are made on the circulation of the water supplying consider not only the whole market reformation but also the current partial innovation. The advantages of the model take the time value of investment capital and quality factors of water supplying into account. Because of inflation and technology and other factors, the price of water supplying is constant. According to the ideal of comparative competition, the price adjustment model changes the traditional mode of bargaining with government to fix the coefficient of production efficiency, which is used to stimulate the enterprise to improve operation efficiency on the basis of the model of highest limited price.At present, the research on water pricing has been pay more attentions in domestic and foreign countries, but all of them neglect the influence of the water price in promoting to use technology of economizing on water and saving system. As the commodity, the income effect of the city's water supplying is larger than the price effect. The single water price policy can not encourage saving water if the water's price is be independent of the consumer amount. The tier progressive metering water price has been reasonably added the economizing cost into the whole cost water price, which can solve the external effects caused by government invalidation and market failure, so the external effects are succeeded to be internalized on the market to achieve the Pareto optimum which means optimal allocation of resource. The tier progressive metering water price can also encourage saving on water, relax shortage of water resource, achieve optimal allocation and high efficient use, and guarantee the sustainable development of water resource, society, economy and environment. The paper also analyzes the factors for all kinds of water consumers in Chinese city, and welfare analysis is consequently investigated for all kinds of water consumers. The analysis result manifests that allocation efficiency of the water supplying is inevitable to be influenced when China changes the water price policy from single price measurement system to tier progressive price structure. To decrease the welfare loss to much extent, the paper suggests the market of water amount allocation right establish to allow the consumers to transact the unconsumed water amount. The end of the paper proposes the model for measuring the price of water amount allocation right, and provides the suggestions about improving and perfecting the market of water amount allocation right. In a word, the rational price structure of city water supplying not only can satisfy the basic requirement for water consume, but also completely use the modulation effect of the price structure to contain the behaviors of wasting water, to strengthen the ideal of saving water, to improve the efficiency of using water, and to promote the sustainable development of the water resource.