- Posted April 14, 2014 by
This iReport is part of an assignment:
Life in China
How Clean is Clean in China?
It seems like Lanzhou’s water pollution case conveys more than just environment and health problems.
Public attention arose around Friday (11/4) noon when the Xinhua News Agency announced that water in Lanzou contained hazardous level of benzene. In around 4 hours, the pollution was confirmed by the city government and residents were advised not to drink tap water for the next 24 hours. As was to be expected, such a disclosure of information resulted in public protests. Such high levels of benzene in the city’s tap water were actually first detected one day earlier by the Lanzhou Veolia Water Company.
Reflecting on the fact that Veolia is a Sino-French joint venture, and the only water supplier in Lanzhou, might raise other questions. First, the way in which Veolia gained their shares was once a controversy. The acquisition was then followed by news of a raise in the per unit price of water. Such a raise was actually a direct impact of economic mechanisms. Water is a public good that is commonly monopolized by state owned companies. In the event that the goods are monopolized by a private company, the possibility of price increase is always high.
Before Veolia acquired the majority of its shares in the Haikou Water Group, urban water services were under the direct responsibility of the local government. Over time, sufficient funds to repair and upgrade the infrastructure were never made available. The problem of maintaining aging pipelines and other water quality issues kept growing, as well as presenting many other greater challenges. Therefore the local government gradually adopted market principles and chose to partner with a private company.
However, according to a report published by China Water Risk in 2010, the majority of investors who grasped opportunities in China’s water sector haven’t put larger water-related risks into focus. Very often they don’t fully comprehend all of the challenges of water policy. Additionally, following a pollution incident, business risks usually come in the form of compensation payments, which are unforeseen at the time they sign the deal.
This issue with water pollution in Lanzhou is actually only a small part of the larger water problem facing the entire country. Both the quality and quantity of water has long been a problem in China and each area still presents challenges for Chinese policy makers. A research paper issued by The Brookings Institution pointed out that the ambitious water resource management strategy implemented by the Chinese government possesses a risk of being undermined by inter-governmental rivalries and informal payments that prioritize economic development more than the sustainable use of resources.
During China’s annual parliamentary session in early March, Premier Li Keqiang declared war on pollution. Amid the new statement “polluters accountable for the damage they cause and having them compensate for it”, in the revised Chinese environment law, critics still say that the Premier’s statement was merely rhetoric with no legal reforms to back it up.
Whatever the final outcome of the Lanzhou issue, the public is now waiting to see what the definition of “#clean” in China really is.
Lanzhou Veolia Water Company building. Credits: sinodefenceforum.com