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Thewaterresourcedeve - The water resource development in...

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1 The water resource development in China Introduction Chinese history is full of floods and droughts, so that prominent Chinese statesmen such as Da Yu and Li Bing have since ancient times given bureaucratic attention to water control and management. It is well known that China is counted as one of the ancient hydraulic societies. By giving high priority to water resource development, the Communist government has, since 1949, strengthened the traditional state control of water use, and has had many great achievements in its construction. For instance, the Three Gorges project will be the largest hydroelectric dam in the world after it is finished. It will be diverting water to the water-scare North China Plain and supplying one tenth of the electricity of the whole country. It will be used specially for supporting development in the northwestern China (SEPA, 1995). Although the current regime may have devoted more money and bureaucratic attention to the problem of water resources than previous governments, water shortages and water pollution are still chronic problems in China, where people are relatively poor in water resources, especially in the Northern area. According to the World Bank's research, per capita water resources in China, on average, are less than one third of the world average, while in the North it is only about 10 percent (Wang and Lall, 1997). Indeed, many scholars and others attribute the deepening environmental and ecological crises all over China to the decentralization of post-Mao economic reforms. It is time to solve the problem in a new way, to not only focus on the major constructions but also put effort into the economic efficiency of water use. In China, water-use rights, are solely owned by the State. But the central planting of water use does not allocate water
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2 resources efficiently; on the contrary, it is the worst problem. In this paper, I will analyze the economic failures of water resource intervention in China. Lack of water property right The Coase Theorem emphasizes that if property rights are well defined, then it may be possible for the parties involved to reach an efficient solution by bargaining among themselves (Coase, 1960). However, because of water’s physical and economic attributes: mobility, solvent properties, sequential use, and economies of scale, and complementarities of outputs. It is difficult to specify clearly the property rights of water use. Especially in socialist China, water is absolutely a public good. But the public intervention does not allocate water resources efficiently; on the contrary, it is the worst problem. One of the greatest merits of the Communist Chinese government, which came to power in 1949, has been to draw a practical conclusion from Chinese history and from practical experience in the liberated areas. The conclusion of the development of water resources can be said to be articulated by three policy slogans, which are often quoted by officials and publications (Friedmann, 1959). These are:
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Thewaterresourcedeve - The water resource development in...

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