China launched a national water rights exchange on Tuesday, allowing for the trading of water between different areas and users.
It's part of a stepped-up effort by the authorities to encourage water conservation nationwide.
The China Water Exchange will enable the trading of rights to use water between users, and will provide consultation, technical evaluation and intermediary services, according to a statement released by the body.
Water to be exchanged via the platform must be certified as legally merchantable by county-level authorities or higher, according to Zhang Bin, general manager of the exchange.
"There must also be corresponding projects that require the diversion of water, as well as methods to meter the flow," he said at a news briefing on Tuesday.
He said holders of water rights can seek potential buyers through public listings on the platform or may negotiate private agreements before seeking authorization and monitoring.
Under a regulation issued by the Ministry of Water Resources, the transfer of water rights will be conducted in three forms: the transfers between different administrative areas, including county-level government or above; transfers of user rights linked to a specific water source; and the transfer of irrigation rights.
In one of the deals reached on Tuesday, an irrigation area in Zhongwei, the Ningxia Hui autonomous region, agreed to sell 2.19 million metric tons of water to a local power plant for 0.93 yuan ($0.14) per ton.
Zhang said the earnings from the trading of water rights in all forms will be mainly devoted to upgrading water conservation facilities and to further improve efficiency in water use in the source area.
The launch of the water exchange is aimed at balancing water resources and usage nationwide, as well as enhancing the conservation efforts, said Chen Mingzhong, head of the ministry's water resources department, in a news briefing on Tuesday.
"The country's water shortage will get worse in the future. We need to give full play to market allocation to help solve the problem, beyond the allocation by authorities," he said.
In 2010, the country completed the allocation of water resources available to different provincial areas and different industries, looking ahead to 2030.
The trading of water began between Dongyang and Yiwu, Zhejiang province, in the early 2000s. Since then, there have been water trading programs in seven provincial areas in North and Northwest China, according to the ministry.
