The Study Of China's Water Industry Business Model And Pro-poor Regulation

The opening of the market has opened the prelude to urban water sector reform since 1990s. With the deepening of the reform, there are a variety of business models. Though the reform is successful, there are some phenomena just like price rising and high price of the assets transferring. So effects of water sector reforms have been questioned by people. Therefore it is necessary to study various modes of water supply industry.Relationship between fairness and efficiency is one of the problems has been controversial. With the widening gap between rich and poor, we pay attention to social equity, people's livelihood and scientific development. Pro-poor regulations which based on the theoretical basis of Rawls's Fairness doctrine is applicable to public utilities'reform. Pro-poor Regulation is to adopt pro-poor regulatory measures to protect the interests of poor consumers.This paper analyzes the characteristics of water supply industry firstly. Water supply services, as quasi-public goods, with a significant network, are the natural monopoly industry. In particular, water supply services as quasi-public goods, the fundamental role in the protection of in people's lives is significant. Therefore, we should pay attention to pro-poor regulation in the reform. Secondly, I analyze the specific behaviors of the business model of from the principal agent perspective, with paying particular attention to the pro-poor impact. Finally, the pro-poor regulation recommendations have been proposed.The conclusion:there is different agency relationship under market-oriented reforms in the public water company business model, licensing model and full privatization model. However the models changing may led to the universal service objectives of water supply under threatened in varying degrees. Therefore, there must be incentives and supervision means corresponding to different trust relationships. Only implementing the pro-poor regulatory can make the reform achieved in a fair way and promote the reform smoothly.