Study On The Impact Of Regulatory Reform On The Quality Of Urban Water Services In China

From the late 1980 s,China’s urban water system has undergone important institutional reforms such as the corporatisation of water utilities,the introduction of foreign investment,franchising,water price reform and comprehensive integration reform.The government has transitioned from being the provider of water services,providing water services at a price close to free,to a market-oriented model of water pricing and even operating mechanisms,gradually forming a state-owned economy as the mainstay,with A limited competition pattern under multi-sectoral government control has gradually emerged,with the state-owned economy as the mainstay and multiple economic components participating.Residents’ demand for water has gradually shifted from a quantitative issue of availability to a qualitative one of taste and smell,with a significant increase in demand for water diversity.On the basis of the gradual achievement of urban water penetration rates close to 100%,residents’ demands for the quality of water supply and drainage provided by water companies have become increasingly stringent,and the quality of water services has gradually become a social concern.The aim of this paper is to analyse the impact of China’s water regulatory reform on its quality.The main part includes the construction of an indicator system for water service quality,a mechanistic analysis of the impact of regulatory reform on water service quality and an empirical analysis.This paper constructs a water service quality system based on the framework of urban water quality.Theoretically,the institutional role of reforms such as integrated water services control reform,water price reform and environmental control on water services quality improvement is studied.In terms of empirical analysis,a DID model was constructed using data from the China Urban Statistical Yearbook,the China Urban Water Supply Statistical Yearbook and the China Urban Construction Yearbook to analyse the impact of comprehensive integrated water services regulatory reform on water services quality,and heterogeneity analysis by city class and region was done,and panel regression analysis was used to analyse the impact of water price reform and environmental control on water services quality.Further analysis of the influencing factors was done.The main findings of this paper are as follows:(1)A framework for analysis of urban water quality is constructed.Based on the physical characteristics of urban water services and the control model of water quality,an analytical framework for urban water quality is constructed at four levels: the pipe network facilities level,the equipment and services level,the operation organisation level and the government control level.From an objective perspective,under the urban water quality analysis framework,the technical factors of water products as normal commodities(water quality and pipe network quality)and the special attributes of water products(quasi-public goods attributes)are taken into account,and the water quality system is established in three dimensions: water quality,pipe network quality and service capacity,using five indicators to measure.The data analysis shows that the overall level of water service quality in China is gradually improving.(2)The impact of regulatory reform on the quality of water services was studied.Firstly,the introduction of competition,the realisation of stepped pricing,the reshaping of regulatory powers and environmental controls are the main lines of water regulatory reform,through which the economic efficiency of enterprises is improved and their profitability is improved.Secondly,the regulatory reform,with the establishment of the Water Authority as an opportunity to influence the quality of water services at the operational organisational level through three realistic paths: eliminating the information costs of conflicting self-positioning of water enterprises,mitigating the incentive distortions and mutual exclusion of multiple objectives of management,and weakening the adverse effects of cross-functional management;thirdly,the water price reform aims to change the original single price catalogue and structure,with the introduction of a stepped pricing approach.This price change affects the quality of water services at the operational organisation level and at the network facilities level;fourth,environmental regulation affects the quality of water services at the operational organisation level and at the facility services level through two paths,such as the control of water quality standards and the control of pollutant emissions.(3)The impact of regulatory reform on the quality of water services was studied empirically.The establishment of the Water Authority as an important event in the regulatory reform was used as a symptomatic fact of the integrated and comprehensive regulatory reform of water services to analyse the role of the integrated and comprehensive regulatory reform of water services in improving the quality of water services.The study finds that the integrated and comprehensive water control reform has significantly improved the quality of water services.The heterogeneity analysis shows that the effectiveness of the IWRM differs between different levels of cities,with the lower administrative levels having a positive and more significant impact on water quality,and the western cities having a positive and more significant impact on water quality.By examining the more detailed indicators of water service quality,it was found that there was a positive and significant impact of the integrated water supply control reform on water supply penetration,as water supply penetration is a measure of service capacity,there was no significant impact of the integrated water supply control reform on water service quality in terms of technical aspects such as overall water quality compliance rate,leakage rate and network pressure compliance rate,but more in terms of the characterisation of water supply penetration service capacity improvement.(4)The empirical study concluded that water tariff reform and tiered charging reform also significantly improved the quality of water services.Heterogeneity analysis shows some differences in water tariff reform across regional cities.In western cities,the impact of tariff reform on water service quality was more significant;the implementation of tiered charges had an impact on water service quality in eastern,central and western cities,with a greater impact on water service quality in western cities.A more detailed study of the indicators of water service quality found that tariff reform had a positive impact on water supply penetration,as China’s water market is based on bidding at the front end and franchising at the back end,where water companies choose to sell more water products in order to make higher profits.There is a negative impact of tiered charges on leakage rates,i.e.tiered charges reduce leakage rates and have a positive relationship on water supply penetration and wastewater treatment rates.When a tiered tariff is introduced,residents are charged differently for different steps of water consumption,giving water companies an incentive to improve the technical specifications of tap water to promote residential consumption.Stepped charges also motivate water companies to improve their service capacity,expand the coverage of water supply and provide good drainage services.(5)The empirical study concludes that environmental regulation has a significant impact on water service quality,and heterogeneity analysis shows that environmental regulation in western cities has significantly improved water service quality.Through the study of more detailed indicators of water service quality,the intensity of environmental control in western cities has a positive impact on the rate of sewage treatment,the cost of pollution discharge in western regions is lower,the level of sewage treatment is lower than that in the east and central regions,the intensity of environmental control increases,the cost of enterprises stealing discharge increases or they are punished more strongly,which will prompt enterprises to increase their sewage treatment efforts and reduce the direct discharge of pollutants.This study has the following innovative points:(1)Based on the economic and technical characteristics of the water system itself,a four-level urban water quality analysis framework based on the pipe network facilities layer,the equipment and services layer,the operation organization layer and the government control layer is constructed,expanding the framework and levels of water analysis.(2)The impact of regulatory reform on the quality of water services in China is systematically studied,enriching the theory of water services regulatory reform.With a quality-oriented approach,the impact of regulatory reform,price control and environmental control reform on water service quality and the differences in their impacts are studied and compared,providing a basis for systematically evaluating the impact of water regulatory reform on water service quality improvement.(3)Expanded and enriched the connotation of water quality indicators.Based on the urban water quality analysis framework,the connotation of water quality is studied in three dimensions: water quality,network quality and service capacity,covering the whole process of water supply and drainage,which more completely characterises the water quality measurement system,expands the research space of water quality and enriches the theoretical system related to water management and economy.