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CBBC Insights: Environment | Will China’s new plan to curb water pollution open up new opportunities for UK business?

BritCham / CBBC
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By Patrik Li
Sector Lead for Energy, Environment & Infrastructure
China-Britain Business Council
On 16 April, the State Council issued its “Water Pollution Prevention and Control Action Plan”, also known as the “Water 10 Plan”. This is the result of cooperation between 12 ministries and government departments, and follows a pledge last year by the Ministry of Environmental Protection that China would spend more than RMB 70 billion (approx. £7 billion) to tackle its water problems. The plan promises a “massive reduction” in serious pollution, strict controls on the extraction of underground water and improvements to the quality of drinking water by 2020. The long-awaited document sets binding targets and deadlines and is viewed by many as the most comprehensive water policy to date.
CBBC's sector lead for the environment, Patrik Li, looks at the changes and the implications for British SMEs with an interest in the Chinese water market.
Ten ways to clear the muddy waters
China’s water market is as muddy as its streams and rivers. The last policy introduced in 2011 did little to change the dire situation the water system is in, and now, to solve water issues effectively, the Government has to come up with a plan that takes a holistic approach to the problems – to prevent and control pollution from agriculture and industry of both municipal and rural water. It also needs to put a stop to the misuse of water resources across all sectors in order to move the country towards water security.
And this is exactly what is envisioned in the Water 10 document, which lists 10 main objectives broken down into 38 actions with responsible government departments identified for each action. Due to space limitations I won’t be able to go into all the details, but I shall point out just a few of the policies that support the Government’s push for clean water:
  • Environmental Protection Law amended and in effect as of 1 January 2015, involving heavy fines and forced closure for non-compliant companies/officials;
  • Guidelines from Ministry of Finance on relaxing private and foreign investment in the water sector and supporting the development of innovative ways of financing “green business”;
  • Consolidation of industrial standards from 600 to 300;
  • Removal of GDP and addition of water management in performance reviews for provinces.  
One of the major issues will be to make sure that officials implement the new policy swiftly and effectively. Cooperation between the Ministry of Water Resources and the Ministry of Environmental Protection for example will be challenging as these departments have different and opposing priorities at the moment.
What does this mean for UK business?
It is too early to list all the opportunities this game-changing plan will bring for UK business, although companies with monitoring technologies and expertise in water management will clearly be in demand – provided UK Government support for water companies can be stepped up to reflect the severity of the problems China is facing.
Chief among them are the proper use, management and control of water resources: the Ministry of Environmental Protection said in 2014 that 280 million people in China do not have access to safe drinking water, while figures quoted by China Daily in May showed that 9.2 per cent of groundwater is unusable even for irrigation. In my view, UK companies familiar with the market should lobby for stronger government support and do more to create awareness of China’s long-term water-security problem.
The full set of policies is available online here (in Chinese).
In early July CBBC will host a webinar that takes a closer look at the Water 10 plan and its implications. Details of this event will be posted at www.cbbc.org/events shortly. 
For more information, please contact Patrik Li, CBBC's sector lead for energy, environment and infrastructure, in Beijing: patrik.li@cbbc.org.cn.
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