Analysis & Reviews

Consumers Willing to Pay More for Water

Consumers Willing to Pay More for Water

With one-fifth of the population and just seven percent of the world’s fresh water, China faces complex water challenges regarding quality, efficiency, and resilience. The government recognizes the problems and plans to spend two trillion yuan (USD330 billion) to address water challenges in China, specifically to improve water quality by 30 to 50 percent and invest in technologies including wastewater treatment, recycling and membrane technology. To this end, China has established itself as a front-runner in the most critical aspect of our water future: investing in solutions.

“China has established itself as a front-runner in the most critical aspect of our water future: investing in solutions”

Chinese people are using and consuming water every day, but are they thinking about it? We wanted to learn more from China’s water consumers and launched the 2014 Value of Water Index: China.

In partnership with China Water Net of the E20 Environment Platform, we surveyed the urban population and industry leaders to gauge awareness, level of concern and understanding of specific issues pertaining to water and water infrastructure in China as well as opinions about solutions.

The survey shows a high level of awareness regarding the seriousness of the water issues

The Value of Water survey reveals that Chinese people have a high level of awareness regarding the seriousness of the water issues in China and believe that finding solutions is a very urgent matter. At the same time, their understanding of the causes of water issues is low. With education and guidance, Chinese people express a willingness to make their own contributions to solving water issues, including changing their own behaviors, conserving water and investing more in order to have access to safer and cleaner water.

“…Chinese people have a high level of awareness regarding the seriousness of the water issues in China…”

Xylem 2014 Value of Water Index in China website

  • 96% of urban consumers categorize the water issues in China are serious, of those 56% categorize them as very serious.
  • These numbers jump for Industry Influencers: 82% of industry influencers categorize the water issues in China as very serious.

More than 96 percent of people aware of seriousness of water issues

Urban consumers say …

Based on the statistics, we can see that Chinese are strongly supportive of taking action to address these problems and are willing to contribute to the solutions by paying a little more or changing their consumption habits:

  • 99% of urban consumers believe it is important for China to take urgent action to address and solve water issues today; of those, 81% believe it is very important
  • However, there is a strong willingness to learn more and pay more:
    • 44% of urban consumers think they could learn more about what actions they can take to conserve water
    • After reading facts about the water situation in China, 75% of urban consumers say they would be willing to pay more money each month to upgrade the water system
    • 88% of urban consumers are willing to pay more money to ensure that they have direct access to safe, clean water from their tap
    • 94% of urban consumers say they need to take more personal responsibility to help solve water issues in China, and they are most likely to use water-saving technology

Industry experts say …

While, industry experts agree that it is important to take action and believe the government and private sector should work together to efficiently implement innovative technology:

  • 94% of industry influencers say it is very important for China to take urgent action to address and solve water issues today.
  • Cooperation between government and private sector companies is important
    • 80% of industry experts believe that the government and private sector companies should work together to address water-related issues.
    • Industry influencers understand the importance of public-private partnerships in collaborating on current initiatives.
    • Industry influencers believe that there should be more clearly defined roles within the industry. That means that government should enact policies and broadly manage the industry, while international companies should provide advanced technology, funding and expertise.
  • Innovative technology and solutions are critical to advance improvements in the Chinese water sector:
    • Industry influencers agree that it is essential to use advanced technology to solve current water issues.
    • This is an opportunity for private companies and industry leaders to work together to identify the right technology that will support sustainable and resilient growth in China
    • Industry influencers believe private and international companies have a unique and crucial role to play in solving water issues, such as providing advanced technology, funding and management expertise

Solving China’s water issues needs involvement of various parties

Solving the water challenges in China will require involvement from government, industry, academia, research and consumers, along with increased public education and the recognition that everyone must contribute to the solutions. No one party can solve the water issues in China. Everyone has a role to play, but each needs to understand their responsibility.

No party alone can solve the water issues in China … Everyone has a role to play

Xylem 2014 Value of Water Index in China-investment, public education & ppp

The government, domestic private sector, multinationals, and the public must acknowledge their roles and take action to protect and ensure a safe water supply for future generations. As a leading global water technology provider, Xylem is committed to solving the most complex water challenges in the world. In China, Xylem products, technologies and solutions are contributing to the goal of sustainable development.

About the 2014 Xylem Value of Water Index in China 

The 2014 Xylem Value of Water Index in China is based on an online study of 2,360 urban Chinese in selected Tier 1 and Tier 2, or large and mid-size, cities; and of 159 water industry influencers in China. The margins of error at the 95 percent confidence level are +/- 2.4 percent for the urban consumer sample, +/- 3.9 percent for the national elite sample, and +/- 7.9 percent for the water industry experts sample. Each interview was approximately 20 minutes in duration. Fieldwork for this study was conducted between September 11 and October 13, 2014.

The Value of Water Index has been conducted three times; first in 2010 and next in 2012, both in the United States. The 2014 study was expanded to China as Xylem sought to provide new insight into the perception of water challenges in a critical market.

For more on Xylem at www.xylem.com

 


Further Reading

  • China Water Investments: 3 Thoughts - It seems the water industry, government and consumers are all finally ready for a water tariff hike. Debra Tan shares her thoughts on the investing in China’s water industry – wastewater vs water supply, rural markets & the growing opportunities for private capital.
  • Urban Water-Energy Strategies - With rising urbanisation and the need for more water & power in Chinese cities, water & sustainability expert, Robert Brears shares some price & non-price management tools to better manage urban demands
  • Can Cities Meet Increasing Water Demands - Nitin Dani and Georgina Glanfield from Green Initiatives Shanghai share their thoughts on how Chinese cities can ensure water security. Can the public play a role?
  • Water: Shaping China’s Food & Energy Choices - Debra talks about key issues & new trends surfacing from the Fortune Global Forum roundtable and why she thinks the 12FYP Strategic Emerging Industries are the real Magnificent Seven
  • Pricing Water - With the NDRC’s recent announcement of tiered tariff hikes across China’s cities to rein in top end water users, Tan mulls over the proposed tiered water tariffs hikes and whether price points and switchpoints between tiers are properly set
  • Water Fees & Quotas: Set for Economic Growth? - Debra Tan reviews the new joint standard on water pricing and new provincial quotas on water use, water efficiency and water quality released in January 2013
Lu Shuping

About Lu Shuping

Shuping Lu is President of Xylem (China) Co., Ltd. in charge of the Sales, Services and Operations in China. Shuping has been working for ITT since 1995 and served at different leadership positions. Before the current role, she also served as VP, General Manager of Fluid Technology China and VP, Director HR for ITT China & India. She led the ITT’s integration effort of its business in China & India during later 2007 and 2008 located in Shanghai. Prior working for ITT China & India, she had worked and lived in Sweden during 2004 - 2007 working for ITT Water & Wastewater Co. Ltd as the Global Champion for the company’s Management System, Lean and Six Sigma continuous improvement drive. She served as Vice General Manager for ITT Water & Wastewater (Shenyang) Co. Ltd before going to Sweden. Prior to joining ITT, Shuping worked for Shenyang Jinbei Automobile Passenger Vehicle Manufacturing Ltd.; as manager for its Import & Export Department. She holds a Master Degree of Business Administration from the US Central State University and China Northeastern University, and a Belcher Degree in English Literature at Shenyang Teacher’s College. In 2010, she graduated from an Executive Masters Program in Human Resources Leadership from Rutgers, the University of New Jersey, USA.

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