China to adopt progressive water pricing

China will steadily introduce a progressive pricing scheme for water use before 2015, according to a latest government water conservancy plan.

Similar to a progressive tax, the progressive pricing means the water rate will rise exponentially as water consumption increases.

China will also adopt high water rates for water-intensive industries and encourage reusing recycled water, according to the plan distributed by the National Development and Reform Commission (NDRC), the top economic planner, and two other ministries on Thursday.

For rural residents, the country will explore ways that give them price discounts when their water use is within set quotas and calculate prices progressively when they use more than the quotas, said the plan, which was made for the 2011-2015 period.

The pricing reforms are part of government efforts to make prices of resource products and energy better reflect market demand and to save natural resources and energy amid growing supply pressure in the world's second-largest economy.

In the latest step, the NDRC said last week it will try out progressive electricity rates in the country starting July 1.

The plan also vowed to keep China's annual amount of national water use within 635 billion cubic meters by 2015 and reduce water consumption per unit of industrial value-added output by 30 percent from 2010 to 2015.