Water Wastage China Style

Water Wastage China Style

By Dr Arvind Kumar

A recent report published in the Christian Science Monitor shows how authorities in the town of Chibi, in the southern province of Hunan, in China, have ordered local residents to consume five tons of water per household per month in the middle of one of the worst droughts to hit China for decades.

A pedestrian walks past a water conservation billboard along a street in Xiangyang, Hubei province Feb. 14. China is now the world's second largest economy, but hundreds of millions of its people still rely on fouled water that will cost billions of dollars to clean. Reuters, Courtesy: Christian Science Monitor, 1 March 2011.

According to the report, the local water company (owned by the government) has complained that it costs 1.67 renminbi (about 25 US cents) to produce a ton of water, but that it is allowed to sell it for only 16 cents a ton. The underlying motive behind this decree seems that every household must drink, bathe, and wash up more wastefully so as to consume (and pay for) more water. Residents complained to the Beijing Times that they were being made to pay for five tons a month regardless of their real consumption. It does not appear to have occurred to the water company that if it is losing money on every ton of water it sells, it will only lose even more money if customers are forced to consume more. It would make more sense to limit water usage if the idea is to limit losses.

As per report, the last time similar nuttiness in economic thinking took place was toward the end of 2010, when the local authorities in many municipalities ordered power cuts in order to try to meet government-ordered reduction targets for electricity usage.