Water Industry Marketization Mode Case Analysis

With the rapid delelopment of the urbanization in China in recent years, the investment demand in water infrastructure building and renewing as an important part of unban infrastructure construction is rising. The central and local government are exploring and deepening the reformation within the water industry and the marketization becomes the sensible choice. In the Chinese market, the main investor is the municipal government. On the one hand, there is a shortage of fund to support the building of water infrastructure, and gap between the demand and the funding supply is substantial; On the other hand, a large amount of private funds are struggling to gain credible access to the investment in the water industry. The marketization is the possible solution to the problems of investment and finance in the development of Chinese water industry.The water industry is characterized by the monopolization of the municipal government. In China, the idea and way of working resulting from the planned economy is the obstacle of the water supply industry; while the waste water treatment business combines the public interest and the profit pursuit aspects,So the complele competition will not exist. The complete market for the municipal water industry formation has not formed yet.The reformation of the water industry includes the reform in the water price of, the operation model, the reform of the management system and etc. Regarding the marketization of the municipal water industry, the key is the choice of models. This paper focuses on the study of marketization models, emphasizing on the case study and using related theories. This paper begins with the introduction of the related theories, industry the trait,the value chain,the trait characteristic of investment and financeand the reformation models of the water industry in abroad; Then the paper establishes the marketization model based on the analysis and case study of the practice of water industry in Harbin; Further it researche the problems in marketization of water supply and sewage treatment industry, offering constructive suggestion for the decision making on the marketization of enterprises involved in water industry, specially for the companies involved in both water supply and sewage treatment business. The recommendation with respect to marketization of water industry is as follows:1. Equilibrium development between the economies of scale and scope should be considered while choosing the integrated marketization model or the separated marketization model.2. The marketization of the municipal water industry is of Chinese characteristic because of the trait of water industry development and the state-owned background. Both the property right model and the operating model should be considered while choosing the marketization model.3. The marketization goal of the municipal water industry will represent the character of the effective competition.4. The marketization model focuses on improving the whole comprehensive operating effectiveness and the efficiency of the water industry, rather than improving the assets.5. The key factor of marketization in the municipal water industry is the water price.