Opportunities in China¡¯s Water Industry

Quinn P. Stepan

¡°When the well is dry, we know the worth of water.¡± Benjamin Franklin, Poor Richards Almanac

After almost 30 years of double digit economic growth and the migration of hundreds of millions of villagers to cities, gaining access to clean water becomes a bigger issue by the day for many residents of China. If the current trend continues, China¡¯s water supply, or lack thereof, has the ability to halt industrial and population growth in one of the worlds most expansive and dynamic economies.
The majority of China¡¯s 270,550 sq km of water is polluted, threatened by drought or being overused. I have read some reports estimating as much as 90% of China¡¯s water supply is polluted. This, of course, is a by product of rapid economic expansion. Today, there are few restrictions or legal enforcement preventing firms from dumping waste products in large bodies of water. This is very similar to what happened in The United States during the Industrial Revolution. Overuse primarily comes from China¡¯s dominant agricultural sector and droughts affect 15% of the country forcing some 300 million people living in rural areas to travel great lengths for safe drinking water.
In its 11th five year plan, China dedicated 1 trillion RMB in attempts to alleviate the water crisis. Most of the money will go towards desalinization and reclamation projects. There is one ambitious plan to move water from water rich regions such as the Yangtze River to the deprived Yellow River. However, moving water around is not the final answer to the problem.
Many firms, both foreign and domestic, are positioning themselves to take full advantage of the current water crisis in China. Companies looking to take advantage of this future trend range from high tech purification services to firms that deal more in water transportation and infrastructure. In the water business, having exposure to China should allow firms to benefit from Beijing¡¯s attempts to bring cleaner water throughout a country in great need. Gaining access to clean water becomes a bigger issue by the day for many in China.

1 Comment

  • 1.Law Blogger  |  November 10, 2009, 10:28 pm

    Interesting read - good to note that you appear to have stopped taking news articles and just re writing them and posting them on your blog - im no expert, but a blog is meant to promote discussion. Make a u-turn and return back to the old ways when your blog entries were of interest!

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