Water Permits: How to Get Water in China

By China Water Risk 17 November, 2014

Find out how total water quotas are set, how to access water & the risks when China's permit system reforms

Since 2006 permits are being issued on systematic water assessments to prevent withdrawal exceeding supply
Water Use Permits are valid for 5 years & can be renewed but permit holders should not take allocation for granted
Systemic issues & split responsibility of water management hinders effectiveness & ability to make changes

This article summarises China’s current water resources permitting approaches based on the study “Technical Research on Integrated Permitting of Water Resources”. The study was undertaken by the Governance Pillar of the China Europe Water Platform (CEWP) – a policy dialogue between China and the EU in the water sector. It reviewed the integrated water resources permitting policy and practice in Europe and China was conducted with a view to see which elements may be adapted for use in China. The objectives were: Cover-of-Report-Technical-Research-on-Integrated-Permitting-of-Water-Resources

  • Improved licensing and permitting of water abstraction and discharge;
  • Improved access to policy, strategy and legal documents in China and Europe on inter alia water efficiency;
  • Mobilisation of the research and business communities; and
  • Enhanced visibility of CEWP in China and Europe.

The study supports the Chinese Ministry of Water Resources (MWR) in reviewing and upgrading existing Water Abstraction Permitting Procedures and will assist in initiating cooperation with the Ministry of Environmental Protection (MEP) to develop proposals for a more integrated approach to water resources permitting procedures for China. There are clear challenges ahead for China – read report authors, Dr Martin Griffiths, expert in water quality strategy, regulation & policy, and Dr Cheng Dongsheng of the China Institute of Water Resources and Hydropower Research views on “Reforming Water Permits in China” here.

Click here for the full report.

Not many people know exactly how China manages its limited water resources, let alone realize that there is a water permitting system in place. Moreover, there are significant doubts as to whether the current water management system in China can deliver the “Three Red Line Policy” and provide efficient & cohesive management of water resource availability, required water abstraction limits, water quality and water quality discharge standards.
Current Institutional Arrangement Related to Water Resources Management (550x)

China’s water permitting system was first set up along with a compensation system according to the Water Law of People’s Republic of China (2002). After several years’ development, the current system was amended in 2006 according to the State Council Decree No. 460, “Regulation for Water Drawing Permit and Collection and Management of Water Resources Fee”.

Since then, permits are being issued on a more systematic assessment of water resources. This is to ensure the permitted volume does not exceed the sustainable resource volume. This is done by the below procedures:

  • Monitoring of water resources and modeling;
  • Issuance and enforcement of permits; and
  • Adjustment of annual allocations until a sustainable situation is reached.


How is the total water quota set?

To determine the total water quota, the development and utilization of water resources must be balanced with the impacts on the natural environment and various goods & services that rivers provide to society. This will influence decisions on where water infrastructure will be built, how it will be operated, and how much water can be drawn for consumptive purposes. This is important to ensure water resource planning, allocation and management so that we can achieve ‘water for all’.

The volume of water available for drawing is the difference between total water resources available and the environmental flow

The Water Law (2002) requires the water planning process to “pay attention to maintaining the rational river flow and the rational water level of lakes, reservoirs and groundwater and to maintaining the natural purification capacity of water system”. All aspects of the flow regime are potentially important to the environment and this natural variability needs to be accounted for in allocating and managing water resources. Thus, the volume of water available for drawing can be defined as the difference between the total water resources available and the environmental flow.

The report notes that environmental flows vary significantly for different rivers and such differences should be taken into account in river management. Moreover, competing demands for water from economic development, municipal and irrigation needs, as well as the need to manage droughts, floods and eco-systems will impact the environmental flow. At no point, should water withdrawals result in lower environmental flows such that its provision of natural ecological services is impaired.

Currently water quota allocation is on the basis of average water resource availability

The current approach in China is to assign water quota allocations on the basis of average water resource availability. This means that half of the time, there is insufficient water available to meet demand, and some degree of water rationing is required.


Underlying systemic issues hinder effective water management

The report acknowledges:
“the importance of a secure and progressive water regulatory regime, backed by a logical and fully enforced permit system is recognised by all as an important goal. Strong regulation is essential to allow China to maintain and improve water security, improve the supply of water for domestic and industrial use, and to improve environmental quality. The need to prioritise water infrastructure expenditure, committed in the 2011 Number 1 Document, to take strategic decisions on a river basin basis, and the optimisation of water resource are all key factors.”
It also says:
“There are large gaps in the water regulatory cycle that need significant improvement if changes are to be made.….The issue of split responsibility for water management causes frustration and lack of ability to make changes. Many think this is too difficult to solve in China!The unclear responsibilities between the MWR and MEP cause lack of strategic direction between water quantity and water quality planning that is magnified in inconsistency in permitting.


China’s 2011 “No.1 Document” which focuses on water seeks to address this by setting national water quotas for the future. This document potentially provides adequate strategic direction for water resource reform and sustainable practice at a national & provincial level, provided that it is implemented effectively. The subsequent “Three Red Lines Policy” provides further guidance and forms the basis for setting standards for water resources, water efficiency and water quality.

The study recommends such standards need to be stringent to be effective.

A Water Use Permit must be obtained from the MWR to access water, whilst a Water Discharge Permit must be obtained from the MEP in order to discharge pollutants into water bodies

Currently, in order to tap into this water quota, a Water Use Permit must be obtained. Additionally, a Water Discharge Permit must be obtained in order to discharge pollutants into water bodies. However, these two types of permits are currently issued and monitored by two separate ministries namely the MWR and MEP respectively, making the implementation of the “Three Red Line Policy” difficult. Reforming such permits is recommended in the study – more on MWR’s views on this in “Reforming Water Permits in China”.

The rest of this article sets out the current regulations and key challenges agead regarding Water Use Permits.

How to obtain a ‘Water Use Permit’

Water Use Permits are currently issued by the MWR. According to current regulation, individuals or companies who want to apply for such permits, should file their applications directly to the water use permit review and approval authorities. Once a Water Use Permit is issued, details such as the maximum amount of water permitted to be withdrawn and what that water may be used for will be specified.

According to the study, there were approximately 440,000 Water Use Permits in China at the end of 2011.

Granting Process of Water Use Permits (1100x)

Water Use Permits are valid for 5 years after which they need to be renewed

Water Use Permits are valid for 5 years after which they need to be renewed. Within the this period holders may request changes, such as more water or a change in use purpose – like crop mix, irrigation methods, switching from coal-fired to coal-to-gas plants and so on. However, since these permits are not currently tradable, they will be terminated if no longer required. This may change in the future – read our interview with Prof. Jia “Water Rights in China.


The report notes that despite holding a Water Use Permit, the permit holder cannot take water allocation for granted – circumstances may change, such as (but not limited to):

  • A new national or regional water master plan may come into place, requiring adjustments in overall water resources allocation;
  • A prospective new user may seek water from the same source which has already been allocated under the issued permit. If such new demand is prioritized by the decision maker such as the government, the existing permit may be changed; and
  • A drought or other emergency may force the government to curtail allocations under the existing permits.


A permit holder can apply for renewal. The renewal process is essentially the same as the initial issuance process but will take into account updated assessments of water resource availability and changes in the purpose of water use.

Key challenges under the current Water Use Permit system identified in the report

  • Water Use Permit setting should include more parameters
    • The total amount of water permitted for use should not exceed the utilizable amount of water resources of the drainage basin concerned, but the daily and seasonal variation are not considered;
    • Water abstracted for agriculture in most areas have not been included in the water use permit system; and
    • The utilization efficiency of water resources have not been included in the setting Water Use Permit.
  • Lack of standardized procedures in the issuance of Water Use Permits
    • No water resource assessments conducted in some cases; and
    • Procedures in issuance of permits are not clearly defined.
  • Incomplete measurement of water used
    • A high percentage of water users remain un-metered; and
    • Metering of groundwater in particular is very limited.
  • Supervision and administration of permits are lacking
    • Insufficient supervision and administration of Water Use Permits;
    • Daily supervision and management control systems are not in place; and
    • Lack of auditing of Water Use Permits – insufficient inspection and examination of the permit.
  • Lack of IT systems & information sharing
    • Low level of information technology used in the managing of Water Use Permits;
    • Information systems are still paper-based with copies of permits kept in various locations; it is becoming increasingly difficult to maintain a good record-keeping system;
    • A system of individual accounts set up for water permit holders is still under construction;
    • Lack of information sharing; and
    • Limited disclosure of water use information to the public.


What the future holds – a single integrated permit?

The report suggests the MWR become the leading organization for implementation and coordination of the “Three Red Lines Policy”. MWR should work together with other ministries and partners to develop methodologies and drive the changes towards a common goal agreed by all parties.

MWR should become the leading organization for implementation & coordination of the “Three Red Lines Policy”

The report explains that a single integrated permit would be the optimal solution but that it is not easy to achieve and may detract from the essential elements of water management. Therefore, a common platform is suggested to be developed to enable progressive integration and ultimately lead to the merging of existing water regulatory frameworks (see diagram).

A common platform should be developed that will ultimately lead to the merging of existing water regulatory frameworks

Proposed Water Resource Planning and Permit Alighment (550x)
We will have to wait and see if the MWR takes the lead and reforms the current water permit system…

More proposed improvements & reforms of China’s water permit system from the report

  • Establish a clear lead role for water resources (both quality and quantity) planning on a full catchment basis
  • Develop a fully integrated water resource strategy, agreed at highest level allowing integrated water quality and water quantity objectives to be set for all river reaches and water bodies
    • Set water quantity and quality standards, secure current standards and develop within an ambitious improvement plan;
    • Establish integrated monitoring programmes;
    • Model options, costs and benefits; and
    • Consult on options and opportunities.
  • Review permitting process and adopt international best practice. Develop an integrated permitting and enforcement strategy
    • Ensure permits are understandable and enforceable by regulated and regulators;
    • Ensure permit standards adhere with quality standards set in the strategic plan;
    • Improvement plans are built into permit conditions;
    • Include a convergence plan to ensure water abstraction and water; and
    • discharge permits complement each other and can be merged into a single permit in the future.
  • Ensure enforcement of permits
    • Communications plan to ensure permit holders (municipal and industry) comply and expect enforcement;
    • Train regulators in enforcement procedures;
    • Establish an enforcement code and prosecution policy; and
    • Communicate to courts and enforcement agencies to ensure consistency.
  • Develop a high profile implementation and change programme
    • Use programme management techniques;
    • Set up key change projects;
    • Implement according to agreed timeframe;
    • Training plan for key individuals and permitting teams, including enforcement and prosecution policy;
    • Communications plan to internal and external stakeholders; and
    • Monitor water resource improvement.


Further reading

  • Reforming Water Permits in China – European and Chinese water policy experts Martin Griffiths & Chen Dongsheng gives an overview of their collaborative study on water permits systems as part of the China Europe Water Platform. What challenges lie ahead? What improvements are needed?
  • Water Rights in China –  Professor Jia Shaofeng, Deputy Director of the Center for Water Resources Research of CAS,  shares his in-depth insights on water rights in China – what they are, who owns them, how can they be “traded” & why a market trading system should be the way forward
  • China’s Hidden Water Flows – Prof Hubacek & Dr. Feng contributing authors of ”Virtual Scarce Water in China” share key findings. Find out why developed but water-scarce regions like Beijing, Tianjin and Shanghai are contributing to the country’s water depletion
  • Watershed Services in China China has embarked on an ambitious market based programme for watershed conservation. Dr Sun, the former Director at the Chinese Academy of Social Sciences explains
China Water Risk
Author: China Water Risk
We believe regardless of whether we care for the environment that water risks affect us all – as investors, businesses and individuals. Water risks are fundamental to future decision making and growth patterns in global economies. Water scarcity has emerged as a critical sustainability issue for China's economy and since water powers the economy, we aim to highlight these risks inherent in each sector. In addition, we write about current trends in the global water industry, analyze changes occurring both regionally and globally, as well as providing explanations on the new technologies that are revolutionizing this industry.
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