China’s Water Law and Policy Reform: How Far Have We Travelled?

Abstract

Dominated by the philosophy of “man can conquer nature”, China’s water governance was traditionally oriented towards construction and utilisation rather than conservation and protection of water resources. It failed to encourage water saving and high water use efficiency due to its ineffective administrative allocation mechanism and fragmented management. Reflecting on the failure of the traditional notion of water use, and in particular its perception on the human-nature relationship, China has been undergoing a large-scale water reform, “Building a water saving society”. This water reform aims to achieve “harmonious coexistence between man and nature” by establishing a national water right system. This chapter reviews the current legal and policy developments in water rights trading in China. It provides an insightful understanding of the legal and institutional context within which tradable water rights have to be developed and operated. China is a country that has been experiencing fundamental changes in its economic, social, political, and legal systems over the past three decades. The evolution of China’s approaches to water management is representative of such transition. This chapter therefore also reviews the institutional framework of China’s water resources management, including laws, policies, and regulatory frameworks related to the key issues in water resources management. Such understanding is critical as it provides an overview of the starting point for future legal and policy reform towards tradable water rights.