Government Study On Water Industry Regulation

With the characteristics of commonweal, foundation, regional monopoly, high risks and high deposit of capital, water industry is to-be- marketing. Water industry has been run as enterprise, baring profits or losses by itself, but it still belongs to to-be- public department with strong tendency of marketing. It's necessary for the government to regulate water industry. For a long period of time, influenced by the planned economy and traditional idea of benefit, the marketing of the industry remains a low level and adopted the way of state monopolization economy. With the advancement of process of China's water industry reform, the government function should alter from the enterprise management to marketing regulation, from direct management to indirect regulation. However, there exist problems in actual governmental systems of water industry including vague political frame, polyarchy, lack of strategic planning, absence of regulation to regulators, unfair market competition system, etc. It is necessary to divide the government functions of steering (decision-making, supervision and control in public service) and paddling (direct production of public service). We should take measures to build reasonable frame of laws and institutions, concentrated regulation, water price mechanism, water supply security mechanism, fair competition, social supervision system, and therefore establish water industry regulation systems with multi participators, mutual restriction, independence and fairness, solving problems of government malfunction and market invalidation in water industry marketing.