Wastewater Projects on the Rise in North China

Financial Downturn No Deterrent for Increased Recycling Projects

Jan 27, 2009

Government expenditure on water and wastewater projects in north China has been unaffected by the recent financial downturn, according to a report by industry analysts.

According to Vivian Chen, Frost and Sullivan's China consultant, a portion of the government stimulus packages of RMB120 billion in Quarter 4, 2008 and RMB4 trillion in 2009 have been devoted to major improvements in water conditions in such regions as Shanghai, Beijing, Qinghai, Guangdong, Jiangxi, Liaoning, Inner Mongolia, Shandong, and Jilin. Demand for improved water and wastewater treatment equipment has increased as a result of the targeted stimulus packages.

"Compared to some traditional industries such as petrochemicals, the water industry is less impacted by economic fluctuation because of its rigid feature as it belongs to public services and infrastructure construction, said Chen. "Meanwhile, due to political support and market innovation, the industry still expects good growth potential."

"The biggest challenge comes mainly from the financial market as environmental protection is highly supported by capital input. The earthquake in the global economic environment will probably slow down the future growth rate of the Chinese water industry the coming two years. It is likely to recover to previous forecasts of 17 to 18 percent growth annually in the third year," she adds in a company press release.

An example of the expenditure on water infrastructure is the announcement by the Facilities Center of Tianjin Port of a major 177 million yuan project designed to reduce wastewater discharge into the nearby Bohai Bay. Slated to begin in July the project is expected to be finished before 2010 with its centerpiece being the total reconstruction of the current inadequate wastewater facilities.

According to news portal Enorth.com.cn, "...daily wastewater treatment capacity will increase from the current 2000 tons to 4000 tons and the wastewater treatment rate will increase from 65% to 85%."

China's Market for Wastewater

The Chinese wastewater market is considered by analysts to be one of the most dynamic areas of the world's water industry for 2009 to 2011, with major opportunities opening for players in the sector, adds Chen.

"As the enforcement of legislation steadily improves, many major municipal projects were announced since 2002. Meantime, vast needs for improvements by both municipal and industrial sectors exist," she said.

"These have created opportunities for equipment suppliers and contractors. Wastewater recycling and re-use and seawater desalination are gaining momentum in north China, where water resource is scarce. These have also promoted relative technical innovations in China."

Northern China has been in the grip of a severe drought in recent decades and the groundwater supplies of the region have been depleted by overuse of the resource for agricultural and industrial purposes.

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