The Study On Government Regulation Of Chinese Urban Civilian Water Supply Industry

Urban civilian water supply represents a critical industry that closely links withresidents’ daily life and production and also affects, socially and economically, thedevelopment of China. The document "Renovation of urban water supply facilities inChina, construction of the12th Five-Year Plan and the2020vision”, issued byMinistry of Housing and Urban-Rural Development of the People’s Republic ofChina and National Development and Reform Commission on May25,2012,demonstrates that it is urgent to reform and develop this industry.In past years, our government solely invested and operated this industry, whichhad made water supply suffer from low prices, costly subsidiaries and poor services.These problems had damaged residents’ interests and hampered social and economicdevelopment. Whereas, currently, this industry, that used to be monopolized, startsopening up. As many issues may be raised due to the change of its investors duringmarket-oriented reforms, our government is required to regulate water supply industry.And government regulation shall cover investors, prices offered by suppliers and thequality of water to be supplied by the suppliers.On the other hand, our country is suffering from shortage of water resources,while water pollution also occurs. The main water sources for this industry are surfacewater and groundwater. When the exploitation of surface water can not meet ourneeds, it is critical for us to exploit and utilize groundwater. So we shall pay ourattention to urban groundwater pollution problems occurred currently, such ascomprehensive pollution of groundwater in Hebei Plain, and frequent population ofgroundwater in Weifang, Shandong. All these problems shall be considered andsolved by us. Water suppliers shall protect the environment of water resources, whenexploring or using groundwater. What’s more, urban residents shall also protect theseresources. Moral constraints as well as government regulation on environment for thisindustry are required for environment protection of these resources, where thegovernment may be expected to promulgate laws, regulations and establish protectedareas for water resources, in order to protect the resources of water to be supplied forurban residents.From above two aspects, we propose government regulation specialized forurban civilian water supply industry in this paper. In the first part, we discusssystematically the research background and significance of government regulation forthis industry, and summarize current status of government regulation on this industry.In the second part, we provide a theoretical basis for government regulation, withregulatory capture theory, the theory of public interest, the contemporary naturalmonopoly theory and the theory of contestable markets. And then, we find ourdifficulties during reforms of government regulation, by analyzing the current statusof government regulation on this industry in China. Finally, we give our suggestions and solutions to strengthen the reform of government regulation on this industry, afterlearning and summarizing successful practices of government regulation on thisindustry in the United Kingdom, France or the United States. Therefore, governmentregulation on urban civilian water supply in China is neither for unlimited loose, norfor blind restriction. It is for different approaches in accordance with fields, in order toensure gradual reforms in this industry for economically and socially sustainable,healthy and stable development of China.