China Water: May 22, 2008: Head of China Urban Water Association possible change?

First, not too long ago I had a brief stint as Associate Editor of a trade publication that dealt with water systems. Although the job did not work out, I did get the chance to do some interesting work and learned a lot (despite hindrances from silly co-workers who sabotaged my work, pointless meetings for no reason and forced bowling games, it still was possible to do some interesting things so long as you tuned out the bizarre office politics. Alas! That's what did me in. I worked too hard, ignored the false rumors and lies that were spread about me, and neglected to play the required games. Alas!)

Among the more interesting pieces of work done was this one.

(Actually, I did most of the work outside of the office and on my own time, in part because I wanted the practice of translating from the Chinese sources. It wasn't easy but it was interesting.)

You will note that Li Zhendong (Li is the family name) was head of the China Urban Water Association at the time.

However, according to a May 22, 2008 story in the China Daily, http://www.chinadaily.com.cn/china/2008-05/22/content_6702065.htm , Shao Yisheng, (Shao is the family name) is now general secretary of the China Urban Water Association.

Perhaps there has been a change in the head of this office. Before stating conclusively whether there has been or not, it would be necessary to look at the structure of the agency more carefully.

It is interesting to wonder if this might be connected to Li's concern over foreign investment in China or if it is merely part of the recent reshuffling of the Chinese government and cabinets.

Please note the China Urban Water Association is not China's primary governmental agency for water. It is supposed to deal with water systems in cities. Just as in the United States or any other large country, the relationshhips between governmental agencies that deal with water in China are entangled, overlapping and complex.

God willing, ishl allah, I shall write more on these matters in the future.

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From: http://watertechonline.com/news.asp?N_ID=69368

Chinese study questions water investments by foreigners

By Peter Huston, Associate Editor.

BEIJING — A Chinese government study on foreign investment in its water industry says that some foreign companies get too much, for much too long, and sometimes promise more than is delivered or even needed, said a February 19 news summary on the Web site of the American Chamber of Commerce of the People's Republic of China.

The China Urban Water Supply Association, which is under the Ministry of Construction, has issued the report in conjunction with China's State Development and Reform Commission, according to a February 19 Chinese language story on sina.com.cn. An English summary of the story ran on the Web site of the American Chamber of Commerce.

Although the report is considered important, much of its contents still remain confidential and have not been made public.

The Chinese-language news story was divided into three sections:

● The introductory section says that two investigations into foreign investment into China's water industry were carried out from October 2007 until January 2008. It said that foreign investment situations are very uneven and are not necessarily "a super-bargain." The situation has reached a point where there is cause for concern, said Li Zhihui, a Beijing financial official involved with the report.

● The second section, entitled "two sets of research," reported on the two agencies' investigations in visits to Lanzhou, Haikou, Chongqing and other cities. Two of the major problems that concern the agencies are, first, that returns from foreign investments are uneven, and, secondly, that some foreign investment contracts include hidden, fixed returns.

Li Zhihui, one of the authors of the report, said in the article that domestically funded enterprises offer net assets of less than 2 percent while foreign-funded investments offer returns reaching as high as 25.6 percent.

Other problems with foreign investment in the water industry mentioned in the article include, first, that foreign investors do not assume as much social responsibility as domestic enterprises. Secondly, some foreign investments obtain a very high rate of return and earn large profits, according to the article. Thirdly, says the article, some foreign investments are structured so that they receive eternal profits even after their work is completed.

An example used in the article is about a Szechuan drinking water company that obtained foreign investment. The agreement guaranteed the foreign investors a promised amount of returns. After the water situation in the city changed, the city water department found itself in a situation where it had to close its own plants to guarantee that the agreement with the foreign investors was kept. It is implied that it would have been better for the city water department to keep its own plants open.

Li Zhendong, the head of the China Urban Water Association, said in the article that although such agreements have been suspended for some time, they were common when foreign investment in the water industry began.

● The third section of the Chinese language article is entitled, "No more blind faith in the water industry." It says that the national and local governments should no longer have "blind faith" in foreign investment in the water industry.

The article says that some government officials are skeptical of the frequent claims that foreign investment brings high technology and greater expertise, and that often the increase in expertise is only slight and the increased technology is often irrelevant to the problems that the water industry often faces.