Reflections from China

Posted on 04/07/2016 by Harold Lockwood

How China is blurring the lines between rural and urban service delivery.

Last month I was in China to look at how the country is organizing the delivery of rural water services. This involved visiting two separate provinces, Zhejiang and Shaanxi, talking to governments at provincial level (but bearing in mind each one has a population of some 50 or 55 million people!), district and township government, utilities and community-managed schemes and users.

These two parts of the country represent quite different contexts in terms of socio-economic development, geography and water resource availability. Zhejiang is in the more prosperous Eastern region, ranking 4th in economic terms out of 31 provinces and with a GDP per capita well above the national average (USD12,466 compared to USD7,924; IMF; 2016). The province is some 102,000 km2 with a population almost one and a half times larger than Shaanxi. Shaanxi on the other hand is bigger, located away from the industrial and commercial heartlands in the relatively less developed Western region with a much more dispersed rural population; it’s provincial economy ranks 16th overall and its per capita GDP is just below the national average

Despite being only two provinces in a very large country, general lessons and trends can be taken as illustrative of the broader development of the rural water supply sector.  China has made rapid and remarkable progress over the past ten years under the 11th and 12th Five Year Plans in providing literally tens of millions of people with access to new water facilities in rural areas. As they now move into the 13th FYP many pieces of the sustainability puzzle are in place, including clear roles and functions, legal ownership and responsibility for asset management. Domestic financing is available at scale and there are almost no limits to government capacity to plan and manage large-scale investment programs, drawing in engineering and technical expertise, goods and services from the public and private sectors. Larger utilities are able to access repayable financing through use of underlying assets as collateral along with future tariff revenue streams. 

Current policy in China is to bring rural water service levels in line with those enjoyed by urban and suburban populations. The national government and provinces are pursuing a proactive strategy of, wherever possible, centralizing existing rural water schemes by combining several smaller ones to create multi-village schemes, or integrating rural communities with larger more technically sophisticated – and professionally managed – schemes. This is happening against the overall trend to relocate remote rural populations into re-settlement communities where all services can be provided more effectively, including health care, education and other social services. 

It seems to me that the case of China illustrates three important lessons for rural water service delivery for countries that will surely be coming up behind them:

1. Domestic financing is a key ingredient and relying partially on international aid at least is not a sustainable solution in itself. As economies develop, such public funding can be used to leverage repayable financing, but it has to be there, at scale somewhere in this mix;
2. Secondly, there has to be a political push behind rural water given that it is often a low priority. There is no question that the government in China wants to see rural people enjoy the same benefits and services as those living in urban areas have gained in the last decade or so. In the end this rather artificial divide between rural and urban will become increasingly blurred and rightly so;
3. Finally, investing in capacity at all levels is critical to success. For those rural communities being served by utilities and in the centralized, multi-village schemes , operators are professionals, technically competent and incentivized.  

Of course not many countries will be able to apply the resources that China has, nor follow its exact trajectory. And certainly the story is not all so rosy - it is well known that China’s remarkable growth has come at a high price in terms of the environment and water quality is a big concern for all, regardless of where they live. Also, and interestingly so, despite differences in context and emerging solutions to providing improved rural water services, both provinces are left with a similar set of challenges when it comes to the more scattered rural populations and very large number of small schemes that are still being managed by communities. In effect this model has been left without adequate levels of systematic support, is weak and risks deterioration of assets which will have to be replaced prematurely. Even though these types of schemes now cover a minority of the rural population, this is China and there are tens of thousands of small-scale operators that are struggling to cope. This is the final challenge that Chinese policy makers will need to address if they truly want to achieve improved services for everyone, forever.

Harold Lockwood

3rd July 2016
Bishkek, Kyrgyz Republic

Dosing tanks for a rural water scheme in Bian County, Shaanxi Province

DeDuan WaterFacility BianCounty 02