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Improving the water resource management system in Beijing, China : steps toward integrated management Peng, Qiong 2004

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Improving the Water Resource Management System in Beijing, China: Steps Toward Integrated Management by Qiong Peng A Thesis Submitted In Partial Fulfilment of The Requirements For The Degree of MASTER OF ARTS in The Faculty of Graduate Studies ( School of Community and Regional Planning ) We accept this thesis as conforming to the required standard  THE UNIVERSITY OF BRITISH COLUMBIA August 2004 © Qiong Peng, 2004  Library Authorization  In presenting this thesis in partial fulfillment of the requirements for an advanced degree at the University of British Columbia, I agree that the Library shall make it freely available for reference and study. I further agree that permission for extensive copying of this thesis for scholarly purposes may be granted by the head of my department or by his or her representatives. It is understood that copying or publication of this thesis for financial gain shall not be allowed without my written permission.  Name of Author (please print)  Title of Thesis:  linprWiA^  Degree:  AVsW~  Department of  Date (dd/mm/yyyy)  -jR^ WoJutr  S>ck*<) j of  The University ity of British Columbia Vancouver, BC Canada  Rs^WTOo^  W ^ v ^ ^ t ^  Year:  OmmryiriXjy  ou^t  fegWv*A^  p\m^\/ Q  Abstract Given the efforts made to improve water resource management in Beijing and the limited progress thus far, I explore alternatives for improving water management performance. Supported by evidence gathered from the research process and by my analysis of the Chinese institutional environment, I argue that it is possible to use an integrated management approach to capture and represent a more meaningful planning practice. Such an approach would enable multiple improvements in water management efficiency. As part of my research, I observed institutional responses and constraints during the Beijing government's reform process, in particular, water management initiatives. My findings strongly suggest that the current institutional and regulatory context, inherited from old frameworks, is an impediment to fully implementing initiatives that might otherwise improve water management. My findings also illustrate that how different actors in a decision-making process are constrained by these old frameworks; central and local relations, marketization, public involvement, NGO development and capacity building in general are all confined by existing institutional barriers. To develop a successful integrated management system, it is essential that these institutional and regulatory issues are resolved. I conclude that establishing an integrated management system can help td create a holistic model in which various types of initiatives are embedded. Moreover, this approach is not unrealistic, given recent trends in Chinese institutional reform and the willingness to change on the part of Beijing's high-level authorities.  ii  Table of Contents ABSTRACT  ii  TABLE OF CONTENTS  iii  CHAPTER1. INTRODUCTION  1  1 . 1  O  B  J  1 . 2  S  C  O  E  1 . 3  P  R  O  1 . 4  A  N  A  1 . 5  M  E  1 . 6  T  E  T  E  B  L  L  T  H  C  P  V  F  E  Y  I  O  I  E  1  T  M  T  H  S  I  O  S  O  R  E  A  S  T  A  L  L  O  C  D  H  O  A  P  T  F  G  D  A  P  E  R  1  E  M  E  N  T  R  A  M  E  W  1  O  R  K  2  Y  M  3  A  P  4  CHAPTER 2 INSTITUTIONAL ENVIRONMENT 2 . 1  E  C  O  N  O  M  I  C  E  N  V  I  R  O  N  M  E  N  4  T  5  2.1.1 Property right system 2.1.2 State-owned Enterprises 2.1.3 New changes 2 . 2  P  O  L  I  T  I  C  A  L  E  N  V  I  R  O  N  M  E  N  5 6 7  T  7  7 8 9  2.2.1 Public involvement 2.2.2 Administrative operation 2.2.3 Multi-angle Description 2 . 3  C  U  L  T  2.3.1 2.3.2 2.3.3 2.3.4  U  R  A  L  E  N  V  I  R  O  N  M  E  N  T  1  Non-institutionalized tradition Suppression of bureaucratic interests Organizational protection Personal reward of loyalty  11 11 13 13  CHAPTER 3. BEIJING WATER RESOURCE SITUATION 3 . 1  C  3 . 2  B  H  I  E  N  I  J  A  I  W  N  A  G  T  W  E  A  R  T  C  E  R  H  A  R  A  C  T  E  R  I  S  T  I  C  S  C  H  A  R  A  C  T  E  R  I  S  T  I  C  S  :  CHAPTER 4 BEIJING WATER INSTITUTIONAL REFLECTIONS 4 . 1  N  4 . 2  B  E  A  T  I  4 . 3  E  X  4 . 4  D  E  4 . 5  B  E  J  I  O  I  N  S  C  I  I  J  N  A  G  T  I  L  W  N  G  E  N  T  R  I  N  G  W  A  T  E  A  M  A  A  L  W  A  T  E  R  R  N  A  I  Z  E  T  E  R  R  M  A  G  D  E  N  S  O  A  N  U  R  E  M  T  C  E  M  E  I  S  N  S  A  T  E  M  M  A  N  A  G  E  M  E  N  A  N  A  G  E  M  E  N  T  M  E  G  U  N  S  E  A  Y  G  S  E  T  M  E  E  N  T  M  S  T  R  M  O  D  E  L  E  F  O  R  M  I  N  I  T  I  A  T  I  V  CHAPTER 5 AN INTEGRATED APPROACH..... 5 . 1  C  O  N  C  E  P  T  O  F  I  N  T  E  G  R  A  T  E  D  M  A  N  A  G  E  M  E  5.1.2 Principle and components 5.1.3 Mandate 5.1.4 Components 5 . 2  W  5 . 3  T  A  H  T  E  E  I  R  N  T  A  F  E  G  F  R  A  I  A  R  T  S  E  B  D  U  R  E  A  U  I N  C  M  O  D  E  L  F  R  O  H  B  I  E  N  T  0  E  S  15 1  5  1  7  19 1  9  2  3  2  5  2  8  3 1  39 4  0  40 41 41 N  A  I  J  I  N  G  iii  4  2  4  3  5.3.1 Readjusts central and local relations 5.3.2 Greater Marketization 5.3.3 Greater public involvement 5.3.4 NGOs development 5.3.5 Enhancing capacity building  44 44 47 48 50  CHAPTER 6 CONCLUSION  53  REFERENCES  56  APPENDIX: LIST OF INTERVIEWS....  62  iv  Chapterl. Introduction 1.1 Objective  The objective of this thesis is to examine institutional factors as they influence Beijing's current water crisis and to examine the concept of an increasingly integrated administrative system as a key to the alleviation of Beijing's water management problems. Here I consider some of the institutional, legal, political and cultural impediments of current water resource management in Beijing. This paper is not intended to provide a comprehensive policy framework and solution to all of the important, complex issues caused by institutional factors that have been embedded in China for hundreds of years. 1.2 Scope of the paper  The scope of this paper is to address the institutional roots and framework relevant to water resource management in Beijing and to conclude with implications and guidelines for water resource planning. Institutional mechanisms play crucial roles in coordinating the dynamics of population growth, economic development and social and environmental sustainability. Water plays a critical role in improving social welfare because of its close connection with many aspects of social development. Throughout Chinese history, agricultural water uses have exceeded all other usage; therefore, construction of water facilities and irrigation projects had been the primary focus of capital and technical input. However, due to population increase, migration patterns and economic development, urban water demand is dramatically increasing. Subsequently, large urban centres throughout China are facing increasing challenges with regard to water demand and management. Since water scarcity has become the bottleneck of economic development in many Chinese cities, the initial reaction of authorities has been to devise comprehensive, technical solutions. However, as the issues have exponentially intensified, social concerns are becoming increasingly significant. The urban population has become more concerned about environmental impacts, water distribution equity, water rights and other social and environmental issues. Arising from these conflicts, attention has started to turn to institutional issues, the role of government and its intervention in water resource management. 1.3 Problem statement  1.3.1 Beijing water crisis in general As the People's Republic of China (PRC) has opened its market to foreign interests in the past twenty years, some progress has been made in the city's water supply management system. However, Beijing's water crisis has become more and more serious, as a result of economic growth and development of industry, population growth and migration, and increasing demand patterns. Surface water storage has been severely affected by several dry years and considerable use in city construction. Water is in short supply and water storage in reservoirs is considered critically low. Groundwater supplies 50-70% of Beijing's water, and levels have dropped considerably as a result of over  1  exploitation(Hou, 2001, p8). Water quality has been jeopardized due to industrial development and the current storage, treatment and distribution systems have affected both water quality and quantity provided to the urban population. Taken together, the interrelationship of these factors has generated what is regarded as a water management crisis in Beijing. 1.3.2 Institutional issues in particular There is a long tradition of issues of conflict and overlapping water authorities in Beijing's water management mechanism. There are more than 6 major government agencies in Beijing sharing water management authority. The characteristics of water logically require linkage in water responsibilities between water and land use, surface and groundwater, water quality and quantity, rural and urban water. However, the current separation of responsibilities has led to failures in planning to account for water and land use interaction and operations. Separate accountability for surface and groundwater has resulted in conflicting and inefficient programs, ineffective management and return flows. Separate responsibility for quantity and quality has leaded to inefficiency in management and failure in exploring trade offs between pollution control and wastewater treatment in the same watershed. Functional linkages among agency assignments have never been clear and appropriate, causing tremendous management problems. In China, the State Council and National level agencies establish general instructions to regulate water management. Local governments write their own bylaws. under the instruction from the central. According to document, there are no fewer than 6 agencies responsible for establishing water management bylaws in their own fields. The degrees and types of bylaws vary depending on different requirements and circumstances. Thus, problems are brought on by overly general bylaws, overlapping bylaws, conflicting bylaws and poor bylaw advocacy and enforcement. Based on the very general water ownership regulations promulgated by the Standing Committee of the National People's Congress in 1988, there are no higher-level agencies that can coordinate and monitor this policy problem. Although some effort has been made through bureaucratic restructuring to address the policy problem, the phenomenon still exists. A dilemma has developed where there are multiple implementing entities, overlapping and uncertain jurisdictions, inadequate facilities and funding, limited or unclear accountability of personnel, insufficient delegation of authority versus responsibility. These factors underscore the bureaucratic problems that have always been identified as the fundamental cause of ineffective natural resource management in China. This is especially applicable to Beijing's water management institutions and their relevant operation and efficiency. 1.4 Analytical framework  1.4.1 Context China used to be a country with plenty of water. In the 1980s, however, many parts of China began to face a serious water crisis, especially in the north China plain(Beijing Municipal Government and Ministry of Water Resources 2001). As a result, the  2  population has started to pay attention to the current water management system as one of the core issues to effective water resource management. A focus on governance emphasizes the context within which existing institutions undertake water resource management and planning. Ultimately, these institutional structures are linked to the Chinese centralized political system and planned economy. Of particular relevance to water resource management are central-local relations, market dynamics (i.e. the changing role of government in the market economy) and their evolution over time. In Beijing, many strategies have been adopted in an attempt to resolve the underlying institutional problems. For example: imposing a cooperation committee; merging and separating authorities; marketization and so on. The varying success of these governance reforms has become the focus of this analysis, in order to inform a revised approach for an improved water resource management structure. 1.4.2 Hypothesis Adaptation of a new water resource management model informed by other countries' experiences and brought on by changing political structures, changing technological possibilities and changing public behaviour, may be a better solution. A modified management system can harness successful examples used by countries experiencing a similar situation, and emerging institutional reform measures throughout China. Therefore, in this paper, I put forward ideas regarding water management solutions with Chinese characteristics. My intention is that such a solution would have the following characteristics: a. Reduce institutional barriers for water resource management. b. Reflect the three main Chinese political institutional reforms since the 1980s. c. Result in a more centralized urban water management structure. 1.4.3 Scope of work In this thesis, I will: (a) assess the current water resource management administrative system and associated issues; (b) provide a theoretical framework and political institutional background in China to address these issues; (c) describe the Beijing municipal government's effort to improve water resource management issues since the 1980s and its outcome; (d) suggest a preliminary institutional reconstruction solution to help solve the issues and its foundation; (e) provide The Centre of Human Settlement at UBC and Canadian International Development Agency some useful resources related to the topic of water management issues in China. 1.5 Methodology  Research for this thesis encompassed several aspects requiring a diverse methodology comprised of interviews and surveys, and supplemented by documentary research and analytical reasoning. The main research technique and method utilized included:  3  a) Literature review. In order to provide a sound analytical framework and foundation for the interviews, it was important to conduct an intensive literature review on topics such as: water resource management in Beijing, history of Chinese hydraulic society, Chinese political structure, interagency cooperation theory and practice in China, theory of political culture in general and China in particular, policy making in China, water issues and problems in south east Asia, international water program development in Asia, and various water management institutional models. b) Online information browsing. Along with the development of information technology, search information online has become an integral part of research methodology. Updated E-journal, index and articles related to the discussion of current water management institutional issues and problems in China were utilized. In particular, this method was used to access the most recent information after the year 2001. c) In-depth interviews. In this study, considerable effort was made to interview a wide array of people, from government officials to community members at various levels. Due to the sensitive Chinese political environment, and the nature of this kind of human subject research, some empirical evidence not generally available in the literature, could be obtained only by interviews. Semi-structured interviews were conducted on a one-on-one basis addressing scholars and officials accordingly. See appendix for list of interviews. d) Analytical reasoning. By comparing literature result and theoretical evidence, the rationale for a more integrated governance structure as the basis for improving water resource management was derived. 1.6 Thesis roadmap  My thesis begins with an examination of institutional issues with respect to water management and planning in China as well as water resource issues in general. These issues are covered in Chapters 2 and 3 respectively. Chapter 4 discusses the Beijing government's responses to the city's water crisis. Chapter 5 explores approaches to water resource management in other cities in China and implications for a refined management model in Beijing. Based on this discussion, I recommend strategies to help implement institutional reform measures and improve water resource management in Beijing. Finally, in Chapter 6,1 conclude my findings by summarizing the key lessons.  Chapter 2 Institutional Environment The effort to understand the water crisis in Beijing must begin by studying some of the distinct and peculiarly persistent characteristics embedded in the Chinese institutional environment, or political culture. It is well recognized that the institutional environment shapes the political system and behaviour and is ultimately resistant to reform (Dinar and Saleth, 1999). In this context, it is assumed that Chinese bureaucracy in the post-Mao Era has had a significant impact on the process of water management reform. In this chapter,  4  some outstanding features of the institutional environment, including economic, social and political aspects will be examined. It would be very useful to further define the word "institution" in this context. The word "institution" has been given many meanings. Social scientists often use the term to refer to the glue that holds society and its parts together (Viessman, 1989, pi 10). For the purpose of this analysis, Ostrom's definition of an institution as a set of rules which shapes human action is preferred (1986, pp3-25). Such rules may be formalized and codified, as in the case of laws, regulations, organizational arrangement, customs, markets, financial and economic instruments and all other components that associate with them. This is the widest sense of the word. In the context of this paper, "institutional framework" refers to the mandates and responsibilities of the various actors. In particular, I refer to the organizational arrangements that "identify the exact responsibilities and authority granted to perform tasks related to water planning, coordination among various water users, the regulations and reinforcement mechanism designed to protect and reconcile the interests of all groups and the management of physical operations" (United Nations, 2001, pi 8). 2.1 Economic environment 2.1.1 Property right system  At the conclusion of the socialist revolution, public ownership of means of production and planned economy dominated Chinese society. Therefore, China is a society that does not have strong market experience and foundation, and anti-marketism has a long history. China has undergone twenty years of economic reform. After 1998, the kind of industrial productive materials that were once entirely planned by the state have been reduced to natural gas and chemical fertilizer (Fu, 1999, pp45-48). However, it is estimated that the market forces apply to only 50% of current industrial production(Fu, 1999, pp45-48). The more basic the industrial product, the more non-market forces dominate. Therefore, one might ask what the impediments embedded in the social economic system are that inhibit the development of a mature market system. Some scholars point to the Chinese property rights system. State ownership system One of the basic elements of the market system is competition. The driving force for stimulating competition is diverse benefits (Wang, 1999). One of the requirements to achieve these numerous benefits is diverse individual property ownership. Therefore, under the single ownership system, there is no enabling and reinforcement to stimulate competition. If there were, the force of competition would be limited in improving productive technology. Since 1978, China has begun to change directions. Diverse forms of individual property ownership have started to emerge, leading to the development of a competitive environment. Today, private sector developments are not being limited or blamed any more, setting a foundation for greater marketization. The unclear definition of property rights  5  Various ownership structures include state-owned, collective-owned and private-owned enterprises. The most problematic one is the state-owned enterprise. The state-owned economical mechanism means in theory that the government represents the country to manage national proprieties, which belong to the public. The line of agent-client (procurator) relations startsfromthe central to local government, to local government branches, and then reaches stated-owned enterprises. Therefore, because the chain is too long, no agency really possesses the entire property rights of any resources. This leads to reckless management (Wang, 1999). First, everyone is the owner, however, no one is granted the exact responsibility and rights. Second, the property owners do not have symmetrical rights and responsibilities. Some people have rights, but don't have relevant responsibilities, and vice versa. The scenarios can be summarized as follows (Fu, 1999, pp46-48): a. The managers of the stated-owned enterprises do not need to be responsible for any economic loss of their enterprises, which may stem from their mismanagement or corruption. b. The enterprise staff members do not need to be responsible for any loss due to their behaviours. c. All these above lead to malfunction of the system itself. d. The property rights allocation between government and enterprises are not reasonable and logical. e. Due to the double entity and rights contradiction, the rights and responsibilities are randomly decided by people based on their personal objectives. f. Because government is the income tax receiver, and enterprise managers are the income tax generators, the relations between them should be symmetrical. However, as enterprise managers do not have to bear responsibilities when enterprises encounter deficit, the government has to intervene to solve problems which undermines enterprise self-management. g. No regulation protects the rights of government and enterprises. 2.1.2 State-owned Enterprises  Another situation China's public administration reform has to deal with is inefficient government and enterprise operations. First, due to the drawbacks of the property right system, the state-owned enterprises have sufferedfromrandom allocation of resources. Enterprises therefore lack the incentive to generate more profit. The enterprise manager has no authority nor ability to be responsible for performance. Economic objectives and goals of enterprises are decided by higher-level officials, rather than being based upon market demand. A fixed salary system and minimal material incentives for workers lead to a lack of motivation to pursue personal material benefits. Instead, workers undertake activities which involve the least labour and the highest personal status. Therefore, nonproductive behaviours prevail (Hu, 1995). Second, from the governmental point of view, managing state owned enterprises has become the biggest issue. Due to the centralized decision-making process for resource management, as well as to the centralized accrual of benefits, government controls the entire socio-economic system, from instructing to implementing to monitoring economic behaviours. An enormous hierarchy is therefore required to directly control the economic  6  development process. The government also must use political pressure and administrative instruments to ensure the absolute obedience of subordinate agencies and officials. Under these circumstances, government's investment in management greatly increases. Accordingly, the cost of internal management and coordination among governmental agencies must also be very high. This is the famous phenomenon of Chinese bureaucracy, referred to by Hu as "enormous organization and staff bulging" (1995). 2.1.3 New changes  The negative side of state-managed enterprise has been clearly recognized and initiatives have been taken to change the situation. The impact, however, has been limited. In the meantime, non-state sector economic activity has started to increase. In 1992, the non state-owned industry gross productive value accounted for more than 50 percent of national industry gross productive value (Fu, 1999, p52). Since then, the proportion of non-state sector enterprises has been growing. On the other hand, public administration reform has been implemented to target existing problems in government management. The stated objectives of the Fifteenth People's Congress were "To change the government function according to the requirement of socialist market economy; to return the management authorities to the enterprises; to fulfill the separation of the function of government and enterprises; to establish institutionalized public administration structure; etc" (Wang and Lin, 1997, p53). 2.2 Political environment  It is recognized that in China, most economic and social problems are actually political problems. Water management issues are also closely linked to the political environment. Although it is beyond the capacity of this paper to provide a comprehensive analysis of the Chinese political system, three significant factors will be illustrated as follows. / 2.2.1 Public involvement  According to interviews with government officials, current water related policy-making procedures involve four steps: 1) after an initial motion for a policy is made, all the related agencies get together to discuss the issue; 2) after an internal discussion, outside experts are invited to provide feedback on the proposed plan; 3) after the proposed plan is revised based the feedback, the decision is submitted to Beijing Water Resources Commission for approval; and 4) after the Beijing Water Resources Commission ratifies the motion, it is sent to the Beijing People's Congress for final approval (Appendix, Interview 3). The current decision-making process is becoming increasingly regulated and structured in response to overwhelming criticisms of informality. Members of related research institutes are invited to provide expert opinions for discussion. Further interviews, however, suggest that informal operation is still very common in the decisionmaking process. Few decisions are made according to principles of equity and openness; rather, they employ "black box operation... hidden exchange" (Appendix, Interview 1). Some decisions might be made between unit heads over dinner. This is called "dinner culture" - a bureaucratic phenomenon special to China (Appendix, Interview 1).  7  From the modern democratic political point of view, governmental commitments of human resources, budget, knowledge and action can only be obtained through comprehensive consultation among planners, politicians and the general public. In the case of China, public involvement in policy decision-making is almost non-existent. In China, there is no legislated nor formal public input process in decision-making. For example, the public is not directly involved in developing legislation and policy. The public can only indirectly express their concerns through the People's Representative Congress (Fu, 1999). There are two ways for the public to bring forth ideas: individually or as a group. As an individual, concerns regarding conflicts between citizens and agencies, inappropriate government decisions, etc. can be brought forth by visiting a local government public hearing office or by writing a letter of complaint addressed to the government. Another formal channel of public input exists during the annual People's Congress, when the congress representative from each region collects public opinions either for discussion or to create new motions. In addition to these two institutionalized public hearing processes, some cities have broadened the channel of government and public contact by opening up "mayor hotline" services and other public comments collection systems. However, the comments collected through either institutionalized or non-institutionalized channels are not normally relevant to legislation or national policy. The proportion of comments that are truly taken into consideration and result in government action is very limited (Zhu, 1997, pplOl-102). Compared to individuals, groups have more options for public input. Three major types of group input exist: 1) established channels for policy input are available to eight major democratic parties, as well as to the army and to public groups representing workers, youth and women; 2) special government-related non-governmental organizations (NGOs), such as cultural committees and science associations, have become increasingly active in informing government decision-making; 3) several functional advisory groups are also called upon for policy input, such as non-governmental media groups which broadcast non-partisan news (Zhu, 1997, pplOl-102). 2.2.2 Administrative operation  Due to the "closed door" policy-making process, serious regulatory problems arise. Although organizational behaviour is strictly regulated on paper, operations always show significant non-regulated activities. The Chinese scholar, Fu Xiaosui referred to these as Chinese special bureaucratic economic features (1999). Five types of such features can be identified (Fu, 1999). First, non-regulated organizational behaviours prevail. Although the Chinese bureaucratic structure has been established since 1954, the modes of operation have never been regulated: the distribution of responsibility is unclear and duties often change. The Public Administration Act remains flawed and the bureaucratic awareness of public administration procedures is vague. This leads to changing administrative behaviours, often following the preferences of the current authority. In addition, the designation of  8  personal responsibility has never been clear, and inappropriate allocation has cultivated an environment of corruption (Fu, 1999, pp57-60). Second, before the economic reforms, the government was the only public service provider and thus had an absolute monopoly. According to bureaucratic economic theory, this kind of system unavoidably reduces the quality, quantity and efficiency of public services. With the progress of economic reform and an evolving understanding of public administration, more private enterprises are slowly getting involved in public services provision. However, the progress of contracting out the management of public resources lags significantly behind the progress of economic reform (Fu, 1999, pp57-60). Third, the marketization of authority is a new phenomenon that has arisen during the transition between old and new systems. In this context, marketization refers to government agencies involved in market competition using their administrative authority as a commodity to trade with real commercial goods in order to obtain individual or organization benefit. For example, rare national resources such as land are given to private enterprises in exchange for a non-currency return such as office space, vehicles or utilities (Fu, 1999, pp57-60). Fourth, government units create policy that enables them to expand their powers and interests. Based on the organizational responsibility framework, agencies have the right to establish their own policy, and thus have a medium for expanding agency self-interest (Fu, 1999,pp57-60). Fifth, national policy often encounters implementation difficulties at local levels. Policies can either be distorted or completely taken over during implementation. A popular saying has therefore spread throughout society: "The boss has policy. We have strategy". This articulates concisely the problematic Chinese legislation and monitoring system, as well as the quality of local civil servants (Zhu, 1997, pplOl-102). 2.2.3 Multi-angle Description  There are many characteristics of the Chinese political system, among which nine remarkable features deserve notice (Fu, 1999, p60). Chinese politics have three striking characteristics, which stem from the military revolution carried, out by the Chinese Communist Party over a long period of time. The first characteristic is the structure of authority, which consists of several intersecting systems and one main line. The systems include the party system, the administrative system, the legislation system, the military system, the procuratorate system, the party disciplinary inspection system, the worker's, youth and women's systems, etc. The one main line is the party authority that crosses all systems (Fu, 1999). Thus, the structure is like a rope. On the rope, there are many knots with local party representatives around each knot. If one system wants to contact another system, they have to do it through the knots. Among all the systems, the administrative organization is the most comprehensive and organized. The second characteristic is the non-governmental system that shares part of the governmental responsibility (Fu, 1999). Non-governmental units include  9  neighbourhood committees, village committees, enterprises, etc. The third characteristic is the close relations between politics and the military. Since the Chinese Communist Party came to power in 1949, they have attempted to build a system of control throughout the country. The system depends on intersecting lines of authority acting as controls for the centre. First, vertical lines (known as a "tiaos") were imposed for each area of responsibility. Each agency is subject to vertical ministerial rule, which means "a distinct chain of command organized on a nationwide basis and reaching from the central authorities through individual ministries to the local levels" (Barnett and Vogel, 1967, p6). "Vertical rule" means "a ministry at the central level has control over all the units at the lower levels which come under the scope of its jurisdiction" (Saich, 1981, pi 18)). The system was adopted under the first five-year plan (1953-57); however, problems arose due to the reluctance of some lower levels agencies to respect the party supervision at the same level. As a result, the Eighth Party Congress adopted the dual rule system in 1956. Under "dual rule", "the unit at the lower level is responsible to the corresponding departments at the higher levels and to the Party committee at the same level" (Saich, 1981, pi 18). Therefore, "horizontal rule" was created, whereby each organization and its leader are under the control of their territorial administrative leader. Meanwhile, these organs were under the supervision of their higher-level agencies in the same jurisdiction. Third, the Communist Party is the third eye to overlook both the territorial and jurisdiction rules at all levels. Sometimes, even low-ranking party members hold greater political authority on many issues than higherranking non-Party cadres. These three lines of authority remain in effect today. The party still has control over all sorts of issues at all levels, although there has been a shift from direct to indirect involvement in social and economic issues. The combined system of vertical and horizontal control structures is intended to provide mutual reinforcement and multiple checks at each level. In practice, however, this has led to problems with administrative incorporation and power conflicts. Because the administrative units have significant authority over all aspects of issues without specific and effective constraint, this has lead to low quality operation of local government. Since China has opened up to economic reform, new characteristics have emerged. First, although the political system is still highly centralized, many of the responsibilities have been decentralized into local departments, such as finance, civil administration, municipal administration, enterprises, government facilities, human resources, etc. Second, whereas law and policy have, in the past, simultaneously controlled social, state and governmental behaviours, the trend is towards a society dominated by law only. Third, the dual system has been implemented in not only economic reform, but also in administration division (Zhu, 1997, pplOl-102). 2.3 Cultural Environment  In China, political culture continues for many reasons to be particularly important in shaping Chinese politics and the life cycle of the individual, in terms of thought, sentiment and behaviour. Recognizing this may help to address Chinese behaviour  10  problems during the transition to political and economic modernization. In order to understand how the spirit of Chinese political culture influences the realm of action, it is necessary to recognize the dynamics of Chinese organizational behaviour and related philosophy as barriers to the political system. If the political structure is considered the "hard" factor in creating a framework, then the political culture should be seen as the "soft" factor. While culture is more flexible and hidden behind the system, it has been a driving force in every phase of political action in China. Throughout Chinese history, the ceaseless tension between elite solidarity and factional struggle has always been present (Pye, 1992). This tension seems to be basic to the culture, which has traditionally demanded both conformity and self-assertion, both humble self-sacrifice and striving to be exceptional, illustrious, and superior. In this chapter, I will briefly highlight some profound political culture factors, which have significant influence on the restructuring of water management. 2.3.1 Non-institutionalized tradition  Fu (1999) postulates that non-institutionalization, whereby social behaviours become customized to informal agreement, has lead to formal regulation being treated as only a superficial undertaking (1997, p63). Non-institutionalization is one of the traditional rudiments which help to shape Chinese holistic social function. Therefore, it is a significant institutional background upon which the diverse behaviour of governmental officials is based. The emerging reasoning of non-institutionalized behaviours is closely linked to China's traditional way of thinking and entrenched philosophical thought. Chinese traditional philosophy emphasizes that individual behaviours mainly rely on the moral rules established in the human heart, rather than outside rules. However, the moral rules have so many different versions, and are so flexible, that the only strongly reinforced rule is obedience to the empire. Popular philosophy taught people to pursue the ruler's satisfaction as the highest requirement, rather than to obey moral rules (Dong and Shi, 1998). This has resulted in rulers' demands, rather than law or regulation, being the primary factor in shaping society. It is important to note that non-institutionalization does not mean that there are no formal, documented rules and regulations. In fact, rulers consider not only the need for making specific laws, but also the detailed policies relating to legislation. However, the desire to follow rules is sometimes questionable, even among policy-makers themselves. On one hand, the rules cannot totally control the ruling class; on the other hand, the rules can be changed at any time by the decision-makers. Since modern Chinese society has inherited thousands of years of historical tradition, non-institutionalization is an impediment to progress towards a sound legislative framework. 2.3.2 Suppression of bureaucratic interests  In most political systems it is common that ministries, agencies or departments have their own institutional interests which, at times, will inevitably clash. The conflicts typically  11  focus on the allocation of resources or questions of jurisdiction and authority. Such conflicts, described as "bureaucratic politics" (Pye, 1992), lie at the heart of most policymaking and implementation processes. In most countries, they are considered a normal part of the political system and various types of coordinating committees are established to deal with inter-agency conflicts. In China, however, the methods used to tackle bureaucratic politics are different, since any conflict between units could threaten the ideal of consensus. In Chinese political culture, there is a strong emphasis on consensus to supposedly support the interests of the collective whole, which, in politics, means the nation. Anyone who prioritizes particular interests over the collective interest is considered to be selfish and therefore unpatriotic (Pye, 1992). The result is that the rhetoric of Chinese politics is filled with lofty sentiments of patriotism. This extends into the realm of intergovernmental relations. As a consequence, China has rarely had an open process of political debate about competing organizational interests, and opportunities to have official discussions about trade-offs are scarce (Appendix, Interview 1). In most countries, however, open discussion of interests is a common way to solve problems. Since the imperial times , the Chinese have been very sensitive to the dangers of controversy among government officials, especially in their efforts to express bureaucratic interests. Although the political system was carefully structured around a centralized bureaucracy divided into ministries or departments, the advancement of local interests was controlled and supervised by higher-ranking officials. In the earliest period of feudalist emperors, the highest officials around the emperor were always symbolic. They did not represent functional ministries. Later, ministries became more formally institutionalized. In order to ensure government stability, the Chinese continued to prevent bureaucratic politics by ensuring that officials did not develop too much institutional loyalty, which might drive them to excessive fanaticism in advocating the interests of their department (Pye, 1992). How do bureaucratic politics affect inter-organizational collaboration? Chinese institutions forbid communication among junior officials in different ministries or units. Inter-ministry or inter-department coordination generally must take place at the very top of the hierarchy. Communication among low-ranking officials by frequent telephone calls or face-to-face meetings, which is common in most political systems, is rare in China (Appendix, Interview 1). Subordinate agencies only report up and down within their own ministry. The responsibility for coordinating policy-making and solving organizational conflicts is reserved as therightof the central decision-makers. Supervisors do not expect their subordinates to be aware of the positions of other ministries or even to explore potentially conflicting issues. Junior officials have no ability or responsibility to develop well-negotiated agreements with competitors, and are denied the possibility of seeking allies within other ministries or departments (Lieberthal and Lampton, 1992, pp 125-148) Thus, the flow of information can only be transferred upward within separate tiaos. Except for during relatively large political battles, officials will rarely seek outside allies or strive for the recognition of winning inter-agency battles over substantively trivial  12  issues. In most cases, the Chinese political system encourages subordinates to push policy initiatives only toward the top of their ministries. When such issues reach the top, ministries cannot always reach a consensus solution. Vice-premiers have the responsibility for inter-ministry coordination (Appendix, Interview 1). 2.3.3 Organizational protection  History has taught that the Chinese political regime strives for a peaceful social order, a fact that has been strongly intensified after several disruptive social movements throughout China's history. This has shaped the traditional behavioural model, which seeks acceptance from outside the family and, for modern Chinese, results in a desire to belong to stable and supportive groups (Pye, 1992). The creation of organizations has therefore become a great source of protection and personal security. Pye (1999) assumed that obtaining security in today's society involves the acquisition of material benefits. In a communist society, however, material rewards are officially discouraged; therefore, people seek more subtle and muted benefitsfromtheir groups, such as psychological support. People strive for group acceptance, admiration and respect, and hope that status and power will ensure security. The supposedly egalitarian allocation of material benefits in a communist society does not decrease people's material aspirations, but rather intensifies them by increasing the drive for recognition and promotion to high positions (Pye, 1992). A fear of social disorder, a desire for the comfort of well-defined norms, an avoidance of the risks of being personally responsible for a decision, a belief in hierarchic order and fears about conflicting interests all contribute to making the participation of subordinates in cross-departmental communication difficult and largely ineffective. 2.3.4 Personal reward of loyalty  In traditional China, the family was the prime unit of social organization. In crisis situations, however, where families did not have adequate abilities or resources to provide protection, people started to look outside the family for possible means of support. In recent times, much of the motivation for active participation in politics has been stimulated by a widespread fear of insecurity and uncertainty brought about by the breakdown of the old order and pre-existing social structures (Pye, 1992). Many Chinese seek identification and association with powerful individuals or groups who will give them the positive feelings about security that they desire. There are many ways in which Chinese have sought the security of group association. One of them is the tremendous significance they attach to the value of loyalty in all political relationships. It is widely recognized in the Chinese political arena that it is loyalty that gives the basic shape and structure to political institutions. Historically, most versions of Chinese socio-political ideology have ultimately been based on a group of people who can show support and loyalty. Once committed, they will generally display a strong willingness to maintain their loyalties for as long as possible, regardless of moral considerations. Even during the period of warlords, there was a notable degree of unquestioning loyalty on the part of subordinates towards supervisors and of disciples  13  towards their mentors. Younger officers were trained to develop strong filial attachments to their sponsoring superiors, which made the Chinese civil war endure for an extended period of time. Although it is a general political phenomenon all over the world, the degree to which loyalty is required has been extreme throughout Chinese history. People who betray their party or association are treated as national enemies. The issue of loyalty also has a deep impact on current Chinese politics, and is therefore important to recognize in analyzing issues relating to institutional restructuring in current water resource management. Loyalty in Chinese political culture has been largely of an organizational nature. This has lead to great difficulties for the Chinese in keeping stable relations among political contemporaries. The alliances and coalitions among semi-autonomous power figures have always been fragile and tenuous. In addition, there has been little movement of individuals from one organization to another. For example, the breakdown of the Kuomintang armies and the Communist Party was not accompanied by a mass of individual decisions to split with Kuomintang or the Communists. The desertion rate was remarkably low. Why were there not more deserters? In modern Chinese politics, many particular circumstances may compel people to give up their bonds of association and establish new ones. However, the Chinese are suspicious of those who make such shifts, and leaders distrust people who once had loyalties to others. It is commonly recognized that if situations change, old bonds of loyalty might quickly be re-established. Pye concluded that "suspicions about the enduring powers of friendship and loyalty inject unrealistic expectations into politics" (1992). Since the time of the Sun Yat-Sen revolution, people believed that only a very limited number of power holders could bring about deep changes in Chinese politics. Even today, the communists have inherited the same beliefs and frequently discriminate against those who once held positions in the old regime, as their background and previous associations make them forever suspect. The Chinese government knows that loyalty gives stability to its political systems, and that the protection of its power depends on establishing absolute loyalties and repressing any possibility of reshuffling. There is an appreciation for the importance of loyalties and for the fragility of human ties. A close connection between loyalty and authority appears whenever problems in cooperation arise. During the process of administrative reform, the requirement for most Chinese authorities to strictly conform with their department's best interest results in barriers to building inter-organizational coalitions (Lieberthal and Lampton, 1992, ppl25-148). It is believed that, when people join an organization, group or association, they should adjust their personal behaviour to reflect their new membership. It is generally assumed that if they make a strong effort to work for the benefit of the group, the group will look favourably upon them, look after them and support their interests. Loyalty and organizational identification therefore result in personal security. The spirit of loyalty will prevent bureaucrats from taking other agencies' interests into consideration. With issues such as water resource management, where holistic planning  14  and the involvement of many different agencies are required, intense loyalties make interorganizational cooperation difficult to achieve.  Chapter 3. Beijing Water Resource Situation 3.1 China Water Characteristics  China is a huge territory and not without its share of water resources. Despite this, uneven spatial and temporal distribution of precipitation, as well as a very low amount of water available per capita, make China's water situation stressful and hard to manage (Smil, 1984). This is more a problem of distribution rather than of absolute scarcity. The North China Plains are always much drier than the South. Exacerbating the situation, up to one-fifth of all yearly precipitation in the North China Plains comes down in a few peak summer downpours (Smil, 1984). From February to July of 2000, there was a decrease of 20% to 70% in precipitation in the North China Plains and part of southern China, compared to the same period of time in normal years . This resulted in the most serious water shortage in the North China Plains since 1949, when communist China was established. The droughts have expanded to more than 20 provinces and municipalities. The reasons are many: rapidly growing industrialization and urbanization; expanded irrigation projects; markedly higher domestic and industrial water use; dramatically increased extraction of ground waters (leading to sinking water tables and surface subsidence); and pollution of major water sources, such as streams and lakes (Smil, 1984). 1  Water Resources Amount In 2000, the total amount of China's precipitation was about 6,009.2 billion m , which represents a 0.9% decrease compared to regular years. The precipitation average decreased 5.9% compared to normal years in seventeen provinces in the North China Plains. In the South China Plains, the precipitation average increased 2.0% over fourteen provinces. Precipitation decreased by over 20% in the five provinces of Beijing, Tianjin, Inner Mongolia, Liaoning and Ningxia. Henan and Hunan were the only provinces with an increase in precipitation of over 20% compared to average years. 2  3  The total amount of China's surface water resources in 2000 was about 2,656.2 billion m , which was 1.6% more than in normal years. Seventeen provinces in the North China Plains experienced a decrease of 13.6% in the amount of surface water, whereas the South China Plains saw a 5.6% increase. The amount of water flowing into China across international borders was about 25 billion m in 2000, down by 3.9 billion m compared to 1999. Meanwhile, the amount of water flowing out of China into international rivers was 720.5 billion m , an increase of 9.9 billion m compared to 1999. 3  3  3  China Water Resources Report 2000. http://www.h2o-china/specialitv/assets/szvgb/2000.htm [Chinese] 2000 Nian Zhong Guo Shui Z i Yuan Gong Bao Ibid. 1  1  China Water Resources Report 2000. http://www.h2o-china/specialitv/assets/szygb/2000.htm [Chinese] 2000 Nian Zhong Guo Sui Z i Yuan Gong Bao  2  15  China's total volume of ground water in 2000 was approximately 850.2 billion m , most of which overlaps with surface water estimates. Only 113.9 billion m is exclusively ground water and, if combined with surface water, the country's total water volume is 2,770.1 billion m , an increase of 0.9% compared to the past. Of this total, 581.4 billion m is in the seventeen provinces of the North China Plains and 2,188.7 billion m is in the 14 provinces of southern China. 3  3  3  Water Storage Amount  3  3  A statistical review in the China Water Resources Gazette in 2000 shows that at the end of 2000, the water storage was 196 billion m in 2,983 large- and medium-sized reservoirs throughout the country. The water storage showed an increase of 21.9 billion m compared to the previous year. Among 422 large reservoirs, however, the water storage volume decreased between January and August. Among the large river basins, the Yangze River, the Huai River and the Zhu River are most notable, with increases in stored water of 15.1 billion m , 5.0 billion m and 1.6 billion m , respectively. When the volumes are calculated at the provincial level, nineteen provinces show an increase in stored water, totalling 30.6 billion m , with the increase most concentrated in the provinces of Hubei, Henan and Jiangsu. Eleven provinces show a decrease in stored water, totalling 8.7 billion m . 3  3  3  3  3  3  3  Water Supply and Usage Amount  4  China's total water supply in 2000 was 553.1 billion m , of which ground water supply accounted for 19.3% and surface water supply accounted for 80.3%. The remaining 0.4% was from other resources such as sewage recycling and rainwater supply. In addition, the amount of seawater directly used was 14.1 billion m . 3  3  In 2000, China's total volume of water use was 549.8 billion m . Domestic water use accounted for 10.5% of the total, including 5.2% urban use and 5.3% rural use. Water used for production accounted for 89.5% of the total water use volume, including 20.7% industrial use, 63% agricultural use, and 5.8% fishing and forestry use (Figure 3.1). Compared to the previous year, China's total water use decreased by 9.3 billion m . While domestic water use increased by 1.2 billion m , industrial and agricultural water use decreased by 2 billion m and 8.5 billion m , respectively. In the three municipalities of Beijing, Chongqing and Tianjin, the volume of domestic water use accounted for over 20% of total volume of water use. In Chongqing city, Heilongjiang city, and the provinces of Shanghai and Jiangsu, industrial water use accounted for 30% of total volume of water use. Several provinces, including Xinjiang, Ningxia, Tibet, Inner Mongolia and Hainan, used over 80% of their water resources for agricultural purposes. 3  3  3  3  3 4  3  Ibid. Ibid.  16  Figure 3.1 Total volume of water use by sector in 2000 (in billion m ) 3  China's total volume of water use by sector (total 549.8 billion m3 in 2000) 5.20% 5.80% • Agicultural u s e • rural d o m e s t i c u s e  20.70%^  63%  5.30%N4  •  Industrial u s e  •  Fishing a n d forestry  • Urban domestic use  Water Quality  5  In China, water quality is graded on scale from I, which is the highest grade, to V, which is the lowest grade. A water quality monitoring report published in 2000, which evaluated water quality in river basins, lakes and reservoirs, is summarized below. In 2000, over the 114,000 kilometres of river basins throughout China, type I water accounted for 4.9%, type II accounted for 24%, type III accounted for 29.8%, type IV accounted for 16.1%, type V accounted for 8.1%> and water worse than type V accounted for 17.1%). Over 58.7%) of the water in river basins was type I, II or III, a decrease of 3.7%o compared to the previous year. Water quality was subject to extreme deterioration in the Zhujiang River and in only one river, the Huanghe, had the water quality improved in comparison to the previous year. In the 24 main lakes throughout China, 9 contained type I, II or III water in 2000, 4 lakes were partially polluted, and 11 lakes were seriously polluted. Among the 139 main reservoirs evaluated in 2000, 118 reservoirs met type II or III water quality criteria and 8 reservoirs, in the provinces of Shanxi, Shangdong and Xinjiang, had serious water pollution. The total volume of sewage discharge in China was 62 billion m in 2000, of which industrial sewage accounted for 66% and domestic wastewater accounted for 34%>. 3  3.2 Beijing Water Characteristics The municipality of Beijing is located in the northwest of the Hebei Plain in China, with 2  •  2  a total area of 16,800 km . The mountainous area accounts for about 10,400 km of the total municipal with117°30' plains E accounting for the remaining Beijing1998, lies between 115°25'area, E and and between 39°28' N and 6,400 41°25'km N .(Jiang, p233). 5  Ibid.  17  Beijing is in the temperate zone and has a continental monsoon climate. In the winter, when the weather is influenced by high pressure from Inner Mongolia, it is sunny with little snow or rain; in the summer, when it is influenced by continental low pressure, the weather is often overcast with rain. The variation of temperature is very marked between summer and winter. The highest temperature is 42.6°C in the summer and the lowest temperature is -22.8°C in the winter. The yearly average temperature is 11 "C to 12°C (Beijing Municipal Government, 2001). When Beijing was designated the national capital in 1949, it had a territory of only 707 km and a total population was 1.56 million (Sit, 1995, pi 17). In the last 50 years, a substantial expansion of the territory has taken place. By 2002, Beijing's territory was more than twenty times its original size and its population had reached about 12 million. The territory includes 18 primary administrative districts, 11 of which are urban and 7 of which are suburban. 2  There are approximately 100 small and large rivers running throughout Beijing's territory, belonging to 5 different water systems. The average rainfall is 606.5 mm per year. Mountainous areas receive an average of 602.3 mm of precipitation per year and the plains receive an average of 613.3 mm. The distribution of rainfall is not even, with 85% concentrated in the period from June to September, and yearly variations are significant (Beijing Municipal Government 2001). Surface water  Beijing's surface water comes from two main sources: 1) rainfall, which is the main water resource; and 2) passing water, through Chaobai River in the east, Yongding river in the west and Jingmi Channel in the north. Since the 1950s, many large-scale water storage facilities have been constructed. At present, Beijing has a total of 83 reservoirs, among which the three largest are Miyun, Guanting and Huairou, with a capacity totalling 9.3 billion m , or 92% of Beijing's total reservoir storage capacity (BMG, 2001). 3  The main water supply source is from the Guanting and Miyun reservoirs, and water is then transferred through the Jingmi and Yongding canals to the treatment works. The medium and small dams spread throughout Beijing form independent systems supplying water for agriculture. Groundwater  Groundwater supplies 50% to 70% of Beijing's water, and is unevenly distributed within the mountainous region. Although groundwater was once very plentiful, extraction from ground sources has increased greatly in the last three decades (Jiang, 1998, p233). As early as 1984, due to extraction from wells more than 100 times the 1949 rate, an over 1,000 km underground funnel was formed, with the water table dropping as much as 20m in its center and 4.3m on average (Smil, 1984). At present, 4,700 wells, 2,000 private boreholes for domestic and industrial use in the city centre, and 40,000 agricultural boreholes have caused aquifers to sink at disturbing rates. The water extraction rate is much higher than the replenishment rate (BMG, 2001). 2  18  Characteristics  Beijing is located at Hai River basin. There are five main rivers flowing from east to west across Beijing: the Jiyun, the Chaobai, the Beiyun, the Yongding, and the Da Qing. With the exception of the Beiyun River, all of the main rivers originate outside of Beijing, in the provinces of Hebei, Shanxi and Inner Mongolia. Rainfall is unevenly distributed. On average, 85% of the annual precipitation falls within the three months from June to September, called the 'flood period'. Beijing tends to follow a recurring cycle of several consecutive wet years followed by several consecutive dry years. During the dry years, the rainfall has typically been about 37% below the annual average, and during the wet years has been about 37% above average. 30% of the surface water comes from the plain areas and 70% comes from the mountainous regions (Li, 2000). The quantity of rainfall varies from mountainous areas to the plains. For instance, in 1990, the annual rainfall was 1,032.7 mm in the mountains and 348.5 mm in the plains (Li, 2000). The distribution of groundwater is uneven. Most of the high-yielding groundwater aquifers are in the northeast of Beijing, and the southwest yields are lower. Throughout Chinese history, agricultural water uses have far exceeded all other uses. However, due to population increase and intensified development in the main cities, domestic water use is now the first priority of China's water supply, with industrial use second and agricultural third. Due to a series of consecutive dry years beginning in the late 1990s, surface water supply has become constrained. Groundwater resources have been over-exploited, leading to a severe drop in the water table.  Chapter 4 Beijing Water Institutional Reflections 4.1 National water resource management  The focus of my thesis will now shift to the national water management system. A brief overview of several key water agencies will be presented, along with their developmental history. An explanation of the national water management structure and its development trends will help to build an understanding of institutional water issues in Beijing. In the Chinese political system, the centrally ruled cities vary enormously in macro water policy, bureaucratic structure of water authorities, inter-agency cooperation and reform initiatives. Beijing's water management structure and mechanisms, to a great extent, parallel the national level. In order to explore feasible solutions to water management issues in Beijing, a review of central bureaucratic features is essential and will provide an understanding of the broader framework of institutional reform in China. The national water management systems have evolved around the Ministry of Water Resources (MWR). Established in 1949, the MWR is one of the few ministries that has endured the many rounds of national bureaucratic restructuring. In 1949, the newly established Chinese regime was threatened by serious flooding problems from China's seven majorrivers.Meanwhile, irrigation systems were badly needed to produce crops  19  and other agricultural products. The MWR was established to address the needs of irrigation and flood-prevention. Until the 1970s, the water resource management system was limited to flood control, irrigation and the establishment of water pivot facilities. In the 1970s, China's flood problems greatly increased and many dams were constructed in order to control floods. This lead to the emergence of another water use responsibility: the construction and supervision of hydroelectric projects. This third task brought water resource management into close contact with energy extraction and lead to the amalgamation of the MWR and the Ministry of Electric Power in 1958 (Appendix, Interview 2). These two contending units were separated in 1978, re-joined in 1982, and separated once again in the national institutional reform of 1988. The decision to amalgamate or separate different ministries has always been a result of complex considerations, and no single reason can provide an adequate explanation. One contributing factor to the amalgamations of both 1958 and 1982 may have been the central government's idea that water resources should be exploited for hydroelectric development (Lieberthal and Oksenberg, 1988, p96). The first merger in 1958 came at a time when major hydropower projects were being planned on the Yangtze River, the Yellow River and the Han River. It was assumed that hydropower would, by 1972, generate more than half of China's power supply (Li, 1980). The underlying motivation for these projects was to integrate the planning processes for water resource management and hydroelectric development. The implementation of the merger, however, was riddled with problems arising from the competing and overlapping operational mandates of the two divisions. The water management unit and the hydroelectric development unit had different types of hierarchical dynamics, different financial profiles (Lieberthal and Oksenberg, 1988, p97), and different organizational features (Appendix, Interview 1). The result was that hydroelectric development objectives overshadowed water management issues, and internal tensions lead to the eventual division of the two operating units, which are a natural outgrowth of these fundamental collisions of different features. Until recently, water was not managed in an integrated manner. The MWR was responsible for flood control, irrigation, drainage, transportation and plan and design of hydroelectric project, but was not responsible for producing the hydropower. Two major agencies, the Ministry of Construction (MOC) and the State Environmental Protection Agency (SEPA), are important to mention. The SEPA has the shortest history among all national agencies. In 1973, the first form of the SEPA consisted of a single office called the 'Environmental Protection Steering Group' under the leadership of the State Council. At that time, the group's work was limited to the management of three types of waste: waste water, waste gas and waste cinder. In 1983, the temporary office was formally upgraded to a permanent bureau affiliated with the MOC. Because the primary task of the environmental protection bureau was to monitor the environmental impact of projects carried out by the MOC itself, the contradiction lead to the ultimate independence of the National Environmental Protection Agency (NEPA) in 1988. In terms of the bureaucratic hierarchy, however, the NEPA did not have ministerial rank and was under the direct control of the State Council until 1993, when the State Environmental Protection Agency (SEPA) was established (Appendix, Interview 2).  20  In the early 1970s, the North China Plains suffered consecutive draughts and some coastal cities experienced a serious shortage offreshwater. As early as 1978, the central government began drafting the "Water Act". In November 1984, in order to coordinate and regulate water-related administration, the State Council established a National Water Resources Coordination Group, composed of members from several water-related ministries and commissions, and the office was set up within the Ministry of Water Resources and Electric Power (MWREP). The minister of the MWREP was the head of the group. During the institutional reform of 1988, the National Water Resources Coordination Group merged with the National Conservation of Soil and Water Coordination Group. The new amalgamation is composed of members from eleven ministries and commissions, and the head is the Vice Minister of the State Council . The group's responsibilities include examination and approval of river basin planning issues; coordination and resolution of water conflicts among provinces; comprehensive water resource planning; and review and assessment of overall soil and water conservation issues . The new steering group, however, has had difficulties carrying out its mandate, and tensions and conflicts between regions and departments around issues of water management not only still exist, but have been exacerbated due to increased water shortages and problematic management systems. The steering group, therefore, does not function as intended, except for having a reputation and an office. 6  7  On July 1, 1988, after extensive investigations, negotiations and demonstrations, and following sixty significant amendments over a ten-year period of time, thefirstNational Water Act was passed and put into effect. The implementation of thefirstWater Act is a major milestone in the integration of water management into China's legal system . Although the newly developed Water Act has actively carried out its role in regulating water administration since late 1980s, its effect has been limited. Section 9 of the Water Act stipulates, "The water management system is organized and implemented based on combining unified management with hierarchical and departmental management" (Beijing Water Resources Bureau, 2000, p335). It was recognized soon after implementation that the new Act was farfrommature and, to some extents, controversial. The intersecting lines of authority make efficient coordination difficult, e.g., in the management of large dams. The construction of the dams and attached facilities is carried out by the Ministry of Water Resources; hydropower production is administered by the Ministry of Electric Power; the dam lock is the responsibility of the Ministry of Transportation; urban water supply and water-saving measures are managed by Ministry of Construction; thefreshwaterfishery is regulated by the Ministry of Agriculture and Fisheries . 8  9  The Water Act of 1988 has not been successful in resolving the problems stemming from China'sfragmentedresource management system, and integrated management has therefore been difficult to achieve. In the late 1980s, the planning processes and Strengthening Water Legal System, Realizing Water Integration Management, accessed 2002.10 [Chinese] Jia Qiang Shui Fa Zhi Jian She, Shi Xian Shui Z i Yuan Tong Y i Guan L i Ibid. Ibid. Ibid.  6  7  8  9  21  objectives among different departments were not integrated or coordinated; policy, technical criteria, quota systems and statistical data were all disconnected. Although coordinating groups existed, integrated planning could not be realized. After many years of lessons learned, Chinese officials and scholars have recognized that the current water management system has become one of the biggest barriers to the sustainable development of water resources in China . 10  In recent years, society as a whole has become gradually more aware of basic water management issues. Public awareness of the need to integrate management and planning, of water-saving measures and of the commercial value of water is, however, still relatively weak. During the national institutional reform of 1988, the State Council attempted to implement significant changes to the water management system, beginning with passing a motion giving the MWR control over the management of precipitation, surface water and ground water. Because the new management structure was not reinforced by legislation, however, the institutional problems of water management were not conclusively resolved. In Chinese history since 1979, four significant institutional reforms have been carried out, in 1988, 1993, 1998 and 2003 (ongoing). Looking back at the first three, the general objective of China's institutional reforms was to gradually transform China's political system to meet the needs of a market economy. The bureaucratic restructuring took place under the banner of organizational simplification and a link was made between restructuring and reform of the cadre system in order to remedy inefficiency, dysfunction, overstaffmg, degeneration, etc. (Burns, 1983, pp692-722). Four major characteristics of the institutional reforms are outlined below (Li, 1998 & Appendix, Interview 2). 1) China's institutional reform is based on catering to the needs of a market economy. According to the conventions of China's centralized political system, the basic structure of provincial and local government should mirror that of the centre. This implies that the central government should establish directly affiliated branches at the local level. 2) The Central Structure Reform Commission is responsible for institutional reform. It controls not only the reform of the central government, but also local reform. One of the most important functions of this commission is to grant restructuring quotas to local governments. It stipulates the number and type of directly affiliated branches and subordinate local government departments required to fulfill a given function. For instance, the local government may be required to establish agricultural, planning, security, water resource and environmental agencies, and also may have the right to establish a certain number of its own agencies based on local needs. The centrally required branches typically take 60% to 70% of the local total organs. The central restructuring thus has a direct impact on local government structure. 3) After the reforms, the number of local government branches decreased and several unnecessary central units were abolished. For example, in the reform of 1998, the Ministry of Coal and the Ministry of Chemical Industry were abolished. It was This comment was taken from interviews with various water-related officials and scholars in 2001.  22  recognized that the original mandates of some units were market functions, and need not be categorized as government responsibilities. The remaining government responsibilities from the disassembled units were allocated to other government agencies, and other functions were designated to commissions or NGOs. 4) After the reforms, many responsibilities transformed or merged, in order to make governmental organization more efficient and simple. For example, as part of the bureaucratic reforms of 1988, three separate ministries - the Ministry of Coal Industry, the Ministry of Petroleum Industry, and the Ministry of Nuclear Industry - were merged to create the Ministry of Energy. Similarly, the State Planning Commission was created by merging the State Planning Commission and the State Economic Commission (Li, 1998). 4.2 Beijing Water Management System  Beijing's current water management system operates according to China's Water Act of 1988. The Water Act stipulates the water management mechanisms in China and combines the consolidated management system with the hierarchical management system (Beijing Water Resources Bureau, 2000). a) Consolidated management: Beijing Water Resources and Conservation of Soil and Water Steering Group was formed by the municipality in 1988 to centralize control over water resource administration, usage, protection and management. The head of the Steering Group is the mayor of Beijing. The Steering Group has members from the departments of water resources, planning, environment, mining, and construction. Its main responsibilities will be described later in this chapter. b) Division management: Because water resource management relates to diverse types of water, such as surface water, tap water and sewage, as well as to their pertinent works, such as water supply and water discharge, and water saving, the Beijing municipal government allocates specific water management authority to different agencies. According to the municipality of Beijing's governmental responsibility scheme, the Beijing Water Resources Bureau (BWRB) is the main agency responsible for overall water management throughout the city. In particular, the BWRB is responsible for managing surface water and groundwater for agricultural use. The Geography and Mining Bureau is responsible for ground water exploitation and assessment of reserves. The Urban Planning Bureau is responsible for exploitation, examination and approval municipal groundwater use. Beijing Public Utility Bureau is responsible for urban groundwater use and management, urban water saving and water supply management. The Beijing Environmental Protection Bureau is in charge of environmental water preservation throughout the city, and for monitoring water pollution and pollution prevention planning. Finally, the Beijing Urban Construction Bureau is responsible for urban sewage discharge and the management of treatment plants (Figure. 4.2).  23  >.  =3  5  CO 00  1)  C3  lur  .P  CD  *T3  ~ 5;  c  "5 £ 0  00  .a  60  a  i—s  ca  O  m  (-> oo  ;d 60 fl  3  C3  C  „  oo §  '5b  cu o  CJ  cj  Sf3  C3  s  S «  cj  CQ CQ  U  PH  </5  E  <*i >>  c cu  a  CU  6D fl  !-  cu  T3  §  '3  o o o «s  oo  o  co  s  ca <w i-  '%  pa  <L> C/3  c  IU  o  o  u  c  cn  o3  GJ  3 PH  00  .a '53  3 o  u u  co -4TH 60 ca > 3 sa a ft eg y  s  CJ  X>  C3  OX) fl  s  e  t  3  C3 CJ  3  o  C3  CJ -rt  O  5  CQ PQ  co So  £° cn  in  CJ  &0  CU  P  CQ PH 60  ca  CQ  00  I«1  i> oo O  2  00  3  M IT, ©\  £  T t  CU  u fl  ex 3  ca  "O  60  CD  O  O  CD  ^ s OJ  C3  C3  CJ  f>  3  cj  60  2o .3g CJ  \S  CJ la  ca  T3  U  O  oo -e  sl-g  * 3 S*2 5 o o S o ,  l  C  o  5 C3u g  01 6D ca  c  ca  §  ^ t H > J 5 l H ^ l ( H j H C / 5 X  ca  on  a  '3 03 fS CU  In  S  c) Hierarchical management: Each water resource bureau and its subordinate units in each district and county are responsible for their own water works within their boundary. 4.3 Existing Management Issues  The current water management system has had a positive impact on Beijing's socioeconomic development. It meets the basic requirement of urban and rural water use, even after several consecutive years of low precipitation and increased demand for water use. The underground water table level has, however, slowly been dropping. Along with Beijing's economic development, the attempt by several organizations to control one river has also seriously impeded progress towards optimized allocation of water resources. In addition, the current system also restricts the joint implementation of water saving measures and surface water return. 4.3.1 Shortage of consolidated management"  Although Beijing has established its water resource management system as an integration of consolidated management and hierarchy management, Beijing's water resources have been managed by different branches of government, and the macro-management of the whole city has been weak for many years. First, the management systems for surface water and groundwater are completely separate. For example, surface water management and water supply are the responsibility of Beijing Water Resources Bureau (BWRB), while ground water reconnaissance and evaluation are the responsibility of the Geology and Mining Bureau. Rural ground water exploitation, examination and approval, on the other hand, are controlled by the BWRB. Urban groundwater exploitation and approval are the responsibility of the Beijing Planning Bureau, and private urban wells are the responsibility of the water saving office of the Beijing Public Utility Bureau (BPUB). Second, urban and rural water use management is segmented. For example, urban tapwater supply facilities are built and managed by the city's Public Facility Bureau, and urban water use targets are approved and managed by the water saving office of BPUB. BPUB is also responsible for punishing over-consumption. Water use and water saving in rural areas, on the other hand, are overseen by the BWRB. Third, private wells and pipelines are managed separately. At present, one third of Beijing's urban water supply comes from private wells. Because pipeline development is relatively slow-paced, there is no way of connecting the private wells with pipelines. Water works in Beijing are the responsibility of the Beijing Waterworks Company, while extraction of water from private wells must be approved by the Beijing Planning Bureau and subsequent management of wells is the responsibility of the water saving office of the BPUB. Fourth, the water purification and sewage management processes are not integrated. Although water treatment is a separate function, it is still controlled by government. At "Ibid.  25  present, however, no single agency has taken a lead role in processing intermediary water after primary sewage treatment. For example, the Gaobeidian Sewage Treatment Plant can treat sewage up to half a million tons a day, and the water after treatment meets standards for type II water. The water is not re-used, however, and is discharged directly into the river, causing an immense amount of usable water to be wasted. While some communities and units have their own sewage treatment facilities, no single agency looks after water re-cycling. Separate management systems for surface water and groundwater, for urban and rural areas, and for pipeline and private wells have resulted in a segmentation Beijing's limited water resources. This has created problems for consolidated water planning, protection, and use, and it makes implementation of integrated policy difficult. Lack of policy coherence Because the authority for water resource management is allocated to different agencies, each agency makes policies, bylaws and plans based upon its own interests. This has resulted in a lack of holistic thinking and coordination. 12  First, there is a lack of consolidated planning. The city of Beijing has no holistic plans dealing with water resource exploitation, use and protection. There are many different plans made by separate agencies according to their own area of responsibility. Because of the significant lack of holistic planning, many problems have arisen relating to water resource exploitation. For example, based on a scientific argument, the number of wells scattered throughout Beijing should be no more than 6,000; however, the actual number is around 40,000. The densest areas have up to 20 wells every square kilometre. Groundwater has been overexploited and the water table has dropped dramatically. Second, there is a lack of holistic and feasible technology and economic policy. Along with the changes in water resource supply and demand during different periods, related strategic plans should be made to determine what should be developed, and how to develop it. The establishment of reasonable investment, taxation and pricing measures to address water resource management is important to help project smooth implementation. Due to the currently segmented management system, however, each organization has difficulty undertaking any detailed and comprehensive research on water issues. It is therefore difficult to make holistic and reasonable water resource policies. Third, there is a lack of a unified statute system. In the past few years, several bylaws and policies have been made to strengthen water resource management, and they have had some positive impacts. The bylaws are based upon each area's demand, however, and are not holistic. As a result, an integrated bylaw system cannot be formed. In particular, there is no one holistic water resource management "mother law". Each agency makes its own bylaws and policies based upon different data and resources, leading to unavoidable conflict during the process of implementation.  12  ibid.  26  Government function degradation In recent years, enterprises have slowly disengaged from governmental affiliation. Within the water resource management system, however, many problems still exist, caused by excessive responsibilities assigned to each governmental agency. 1,5  Government agencies use their administrative power to intervene in the business functions of their affiliated enterprises. Chinese agencies traditionally function with a mix of institutional behaviours, ranging from bureaucratic to entrepreneurial. Each agency directly controls its subordinated state-owned enterprises. On one hand, they cannot devote all their effort to bureaucratic work; on the other hand, they severely interrupt the market system. This kind of half-state, half-market system constricts the ability of stateowned enterprises to flourish. Meanwhile, government agencies are tasked with an overload of bureaucratic work which they can not handle properly, and their functions have degraded. Insufficient water pricing After its establishment in 1949, the People's Republic of China operated under a planned economic system for nearly thirty years. Natural resources like water were allocated to usersfreeof charge, based on a supply management system. In 1978, chairman Deng Xiaoping announced that China would abolish the planned economy and convert to a market economy. That year well water users were charged at a new fee of 0.02 yuan/m . In the early 1980s, prices were put on self-extracted surface water for the first time. Industrial water use was charged at 0.008 yuan/m , and agricultural water use was charged at 0.001 yuan/m (Sun, 2000). Water prices were initially set very low, which caused significant water waste, especially by factories using water inefficiently. . Water prices increased in the 1990, partly to help recover sewage treatment costs and partly due to an overall improvement in China's market economy. For example, the rates for domestic users increased from 0.12 yuan/m in 1983 to 1.00 yuan/m in 1998 (Yan and Stover, 1999). Despite these measures, however, prices still do not reflect the full cost of water treatment. This is partially because pricing increases are being outpaced by increases in production costs. For example: from 1985 to 1989, water production costs rose 107.8% while water prices increased by only 42.5% (Jiang, 1998). In summary, the transition to a market economy requires that Beijing adopt effective policy to regulate water prices so that full .costs are internalized,, On August 1, 2004, Beijing's household water prices were again raised, this timefrom2.9 yuan/ m to 3.7 yuan/ m (Interfax, 2004). The adjustment is expected to help conservation efforts in Beijing, a city threatened by declining water tables and encroaching desertification. 3  3  3  3  3  In China, natural resources are owned by the public and therefore managed by government officials. State enterprises are units which, on behalf of the government, manage natural resources to produce social benefits. This is an area in which private enterprises have never been involved and is therefore a national monopoly. It has been proven in China that monopolies are the cause of inefficiency and bureaucratic behaviour. The absence of market forces to maximize water benefits and reduce government responsibility leads to water management failures. Although awareness of  27  the issue has improved, there is a lack of policy to encourage private companies to get involved in water-related business. 4.4 Decentralized management model  The institutional arrangement for water management evolved from structured to nonstructured solutions over a number of years. Many countries have designed, redesigned, adopted, and eliminated their water management model over the years, through structural and/or policy changes in order to improve water management efficiency. A review of various management models which have been adopted in other countries is useful to an examination of Beijing's water management system. Given the complex features of water and its management, there is no absolutely centralized or absolutely decentralized model. These two models are modified and combined according to a country's specific political, geographic and cultural circumstances. However, having a clear understanding of these two basic models provides the basis for an in-depth analysis of the water situation in Beijing. 4.4.1 Water system structural reform The Centralized management system  Centralization means that a special organization is set up by the government to implement the integrated management of water resources (Chen and Wang, 1996, ppl84190). Due to the natural attributes of water, there is no simple model of centralization where one agency has control over all issues at the national, provincial and municipal levels. The distinction between centralization and decentralization provides a measure of how water resource planning, development and management are distributed among agencies. Under a centralized model, water management is under the direct authority of the central government or its representatives at the provincial or municipal level. A system of delegated administrative authority is set out through acts, decrees or ordinances to control major water management issues within a country's geographical boundary. The degree of responsibility and authority granted to local agencies is limited. Implementation of such a system will be illustrated through an examination of a regional watershed development scenario and a municipal water management scenario. Because the river basin forms a single hydrological entity, it is the natural unit for water management and can assist more coherent water research, planning and development. Watershed or river basin management has been adopted as a general approach by many countries and regions located on or near a major river. Since geography and hydrology define an appropriate scale for planning and problem-solving, the use of "integrated" or "holistic" planning for watershed management can be wisely done in a centralized manner. Many countries have therefore adopted a centralized water management model in order to comprehensively manage the river basin in a more effective way, e.g., Tennessee Valley Authority in the United States, the Thames Water Authority in the United Kingdom and seven major river basin committees in China. In most of the countries, the authorities have been given a legislative mandate through the constitution. The river basin management institutions not only possess an administrative function, but also execute laws. Local and district offices implement projects and provide services  28  based on decisions made by the central river basin authority (Centre for Human Settlements, 2000). In the case of municipal water resource management, the centralized water management approach has been adopted by many municipalities in Asia. For example, the Water Affairs Bureau in Hong Kong is a municipal water affairs agency. It has various responsibilities such as water supply and demand management, water policy establishment, coordination of water issues, strategic water planning, etc. covering all issues related to water management. Although the centralized model has a very good reputation in terms of preventing the scrambling of water resources and ensuring that policies are equitable to water users at different levels and in different departments, it has been criticized because it results in bureaucratic inefficiency and monopoly behaviour (Winpenny, 1994, p25). First, centralization often intensify conflicts between organizations. Combining different objectives and interests in a single agencies tends to make people feel threatened. In an environment dominated by conflict, it is hard for people to implement management techniques that cater to different needs in a holistic way (Feldman, 1991, pi09). Second, in practice, central allocation and management of water results in rent-seeking behaviour on the part of its agents (Lovei and Whittington, 1991). Public facilities with control over water supply have the potential to generate monopoly rents, which may be diverted into the pockets of service providers. The Decentralized management model  Under a decentralized model, on the other hand, water management responsibilities are separated into different agencies with related functions. Alternatively, the central government hands over its water management authorities to local governments. Various local agencies are given responsibility for different water issues (Chen and Wang, 1996, pp 184-190). This model has been utilized in many countries, including China and Japan, as well as other Asian and North American countries. In this paper, Beijing's current institutionalframeworkfor water resource management will be addressed as an example of decentralization (refer to figure 4.2 for details). Beijing is a capital mega-city surrounded by rivers and has undergone rapid economic and population growth. Due to its important political status, Beijing has been given special status and the same bureaucratic rank as a provincial government. At the national level, the Ministry of Water Resources (MWR) is responsible for formulating and maintaining a national water master plan and for stipulating water macro policy and law. In addition, the MWR also cooperates with other ministries in charge of water issues. These include the Ministry of Construction (MOC), the National Environmental Protection Agency (NEPA), the Ministry of Land Resources (MLR), and the State Developmental Planning Commission (SDPC) . These ministries all have directly affiliated branches at the local level. In addition to the centrally-affiliated branches, the Beijing Municipal Government also has its own government departments and few specially established branches. 14  1 4  29  Beijing Municipal Government (BMG) has the responsibility of holistically managing water issues; however, it only controls water planning issues at the macro level. The Beijing Water Resources Bureau (BWRB), as a directly affiliated branch of the MWR, is responsible for planning water supply and demand, formulating strategies and policies, organizing and constructing hydroelectric facilities, managing floods and droughts and controlling agricultural groundwater use. Beijing Public Utility Bureau, a branch of Beijing Municipal Administration Commission (BMAC), is responsible for public administration of urban water supply, water saving, heat and gas supply, etc. The BMAC is a very important executive organ of the BMG. It is responsible for establishing, planning, controlling and implementing city infrastructure development strategies and policy, public utility administration and environmental concern. The BMAC works closely with the BWRB on water saving issues such as the creation of annual water use plans, the establishment of water saving criteria and the approval of urban and rural well exploitation and use. The BWRB is responsible for macro-control of water saving issues and the BMAC is responsible for carrying out dayto-day activities. As environmental issues become increasingly important in China, the significance of the role played by Beijing Environmental Protection Bureau (BEPB) has become recognized. In addition to the BEPB, some other Beijing government branches also act upon pollution and environmental issues. For example, Beijing Water Resources Bureau and BEPB both have the authority to monitor the environmental impacts of hydropower projects. As the local counterpart of the State Environmental Protection Agency (SEPA), BEPB is responsible for granting of sewage discharge permits, assessment of the environmental impacts of urban infrastructure projects, hydro logical environmental protection, and water quality monitoring and management. In addition to the above four major water resource management agencies, there are a few other parts of the water management team, such as the Beijing Planning Commission, which is in charge of allocating urban groundwater exploitation permits. The Beijing Water Group Company supplies most of the city tap water. The Beijing Municipal Construction Bureau is responsible for rainwater, as well as for the construction and management of sewage discharge pipelines. Part of the Beijing Geological and Mineral Bureau's mission is to exploit, evaluate, and monitor ground water. 4.4.2 Non- Structural reform Policy makers restructure or centralize natural resources agencies and rearrange their mandates in the hope of achieving water management efficiency. However, Feldman pointed out that reorganization of government structure would not assist in promoting an environmental ethic, which is the basic foundation for sound public water policy, and for ensuring the implementation of the policies (1991). Environmental ethical concerns incorporate equity, non-economic benefits and participation by the public in decisionmaking. So what is the basis for good public policy? One answer, brought forward by Kelman, contends, " the basis for good policies is the transcendence of self-interest. The  30  goal is facilitated best when alternative points of view are expressed in the policy process" (1987). The role of government should be to "serve as a forum for public discussion of the value of different ways of life" (Kelman, 1987, p211). The intention to pursue regulatory strategies towards water management should therefore emphasize nonstructural methods before addressing specific water issues, rather than structural ones, since the resolution of problems requires philosophical strategies. For example, it is important to acknowledge the premise that centralized or decentralized packaged policies are not easily adapted to the different needs and resources of different areas. Reorganization does not address values. However, the long-term goals of a water development and planning project must consider values as a symbolic and ritual confirmation of the possibility of meaningful individual and collective action (March and Olson, 1983). Each community must go through its own process of assessing needs, setting priorities, formulating solutions, and owning programs. In principle, this could be done by applying participatory planning into the water management system. 4.5 Beijing water management reform initiatives  The lessons learned from the management failures of the Beijing government suggest that integration offragmentedauthorities could solve many of the current issues. One of the first steps towards implementing integrated water resource management is to develop a more appropriate and direct approach to reducefragmentationand stimulate the closer integration of water quality and quantity management issues. Such an approach could involve structural or administrative changes. What can be considered the most suitable, integrated approach to Beijing's circumstances? To address this question, a further examination of measures adopted both within, and outside of, Beijing will be very helpful. The suggestion of a future integrated organizational structure for Beijing must be built upon recent experiences in many countries and regions. Four general integration models can be identified, and are detailed below (The Conservation Foundation, 1984). a. Impact assessment  Beginning in the 1980s, the American federal government and several other countries instituted impact assessment as one of the required processes when proposing major development. Impact assessment laws have created a historically significant departure from the pattern of compartmentalized decision-making by requiring agencies to comprehensively evaluate the effects of their proposed projects (The Conservation Foundation, 1984). However, it was soon found that impact assessment alone is not enough to influence or change agency decisions, especially in matters which cross jurisdictional lines or attempt to merge water quality and quantity objectives into one. The behaviour of the Tennessee Valley Authority (TVA) in promoting the completion of the Tellico Dam in Tennessee is a case in point. The impact assessment of the project advised that some losses of agricultural land and of fish and other habitat could result from the project. This was not an important consideration to TV A, however, since its statutory mission was limited to flood control, power generation and economic development (Liroff, 1980, ppl57-158). Therefore, assessing projects from a broader perspective only forces recognition of a wider spectrum of issues and will not guarantee more environmentally-sound corresponding actions.  31  b. Institutional coordination  If simple consideration of impacts does not do more than raise awareness of issues, then perhaps a structured liaison among agencies could be more effective. By making coordination among agencies a legal requirement, an interagency memorandum of understanding can help overcome boundary constraints. The agreement may be signed between agencies at the national or federal level, or at the state or provincial level. For example, a coordinating council called the Ground Water Protection Strategy Work Group has been established in Minnesota, comprising key staff from 13 major federal, state, and local agencies responsible for particular aspects of groundwater management in Minnesota. Although the council has no real authority of its own, and operates fairly informally, it services a moral or procedural function rather than a legal one, and encourages members to seek substantive management agreements to protect and improve the quality and supply of groundwater and to implement such agreements in their individual agencies (Environmental Law Institute, 1984, p24). Similar arrangements to coordinate the actions of diverse agencies have been used in many countries. China has taken this approach as its main reform initiative to solve water coordination problems from its central government down to local municipalities. Beijing started to utilize this approach in the early 1980s. In 1981, the BMG established the Beijing Water Resource Management Committee to coordinate Beijing's water resource management. During China's second cross-country institutional reform in 1988, the Beijing Water Resources Management Committee was abolished. Its responsibilities were transferred to the BWRB as a new department called the Department of Water Resources. In order to mirror the central restructuring, which combined unified management with hierarchical and departmental management, Beijing established its Water Resources and Conservation of Soil and Water Steering Group in December 1988 (Appendix, Interview 3). The Beijing Water Resources and Conservation of Soil and Water Steering Group is entrusted by the BMG to coordinate and approve comprehensive management issues of water resources, in terms of development, usage, protection and management. It comprises members from BWRB, Beijing Planning Bureau, Beijing Public Utility Bureau, Beijing Geographical and Mining Bureau and Beijing Construction Bureau, among others. Its general office was set up within the BWRB, and the mayor was nominated to lead the group. Its responsibilities are to ensure that the planning process for water development, use and protection addresses a comprehensive range of issues, including water conflicts among districts and problems among government branches, and to develop water and soil conservation strategies and policies (Appendix, Interview 3). In summary, the main responsibility of the steering group is to coordinate water administration and alleviate conflicts among relevant agencies. The creation of this high-ranking coordination group proves that the BMG has recognized the importance of collaboration issues stemmingfromoverlapping authorities. Although the setting up of a coordination committee has not been completely effective as a solution to alleviate all cross-jurisdictional conflict, an interview I conducted with relevant government officials revealed some value in having this kind of permanent coordination  32  commission. There have been several notable successes, including: 1) All the government agencies have reached a consensus that cooperative interagency work is significant. Setting up a system to fulfill the task therefore becomes the directly relevant and tangible product of the awareness and consensus; 2) A regular group of officials was formed to fulfill the task, thereby establishing a formal system of coordination; 3) Each relevant agency has the obligation to participate in interagency communication, rather than interagency communication being based on a random and voluntarily basis. To a great extent, this has improved the situation of poor information exchange between agencies; 4) A leading unit or individual was designated to distribute legally binding documents to member agencies, in order to collect comments in a formal, organized and efficient manner (Appendix, Interviews 2&3). Setting up a collaborative institutional group to reach consensus on decision-making and to help smooth the implementation process has become a common approach to solving interagency collaboration issues in China. In addition to the water group, there are other commissions working on various issues directly under the lead of the BMG. For example, the creation of the Environmental Protection Commission resulted from the reforms of 1988. Some officials, explaining the reason for having this kind of initiative, stated, "Setting up a permanent collaboration group is a relatively simpler and easier way to tackle the issues, compared to structuring a new administrative unit. First of all, the commission is not considered a new administration; therefore, no new human resources are added. Second, no additional funds are needed to operate the commission" (Appendix, Interview 2). Experiences in China demonstrate that this approach is effective because attempting to balance the tension between agencies by restructuring is always difficult and causes disputes and resistance. However, the history of public administration reform in China demonstrates that external collaboration is not likely to be effective unless it is reinforced with formal statutory authority. One sophisticated, high-ranking official who has been working in this area for many years made the astute observation that success "...simply relies on increasing the political commitment to coordination. Awareness of the complexity and significance of the issues is not enough force to change the heavy bureaucratic mechanism in China. Indepth political reform and restructuring, backed up with legislation, is the only solution to perfect water management" (Appendix, Interview 2) As mentioned earlier, the BMG has identified interagency collaboration as a corporate strategic priority. The Water Resources and Conservation of Soil and Water Steering Group has members from different agencies across the City. Although the team is set up as a coalition, the motivations of the agencies are not necessarily consistent with the intention of the group. The full potential for collaboration has yet to be fulfilled due to individual organizational interests overshadowing common interests. As mentioned in the second chapter, the organizational structure does not support the flow of information between agencies. Some of the officials acknowledge the difficulties, noting that "Although we bring all the units into the same room, the disparity in knowledge and understanding between groups is enormous. We cannot build a synergistic momentum towards our goals. Better organizational coordination is seriously lacking... Most of the  33  time, the organizational focus is overwhelming. We are struggling because we can predict the outcome before we get into the room" (Appendix, Interview 4) Policy coordination is a central problem in any bureaucratic system (Lieberthal and Lampton, 1992). Based upon interviews and the analysis in chapter two, it can be inferred that lack of bureaucratic coordination in Beijing may stemfromChina's political system and its associated political culture: 1) ignorance of the relevant trade-offs and complementarities between policy areas, due to functionally divided modes of information collection and communication (Lieberthal and Lampton, 1992); 2) fragmentation of authority among relevant actors who possess divergent goals (Lieberthal and Lampton, 1992); 3) lack of incentives to pursue collaboration using already inadequate resources; 4) a scarcity of open political debate around competitive interests and trade-offs, due to traditional socialist ideology which treats the expression of bureaucratic interests as contradictory to national or collective interest, resulting in blocks to horizontal communication and cooperation (Appendix, Interview 1); 5) the belief in hierarchical problem-solving, fears about conflicting authorities, and a desire to avoid the risks of personal responsibility in decision-making; and 6) the value of loyalty in political relationships and the difficulty of keeping stable relations among political contemporaries, leading tofragilityand tenuousness in alliances and coalitions among semi-autonomous power figures, therefore depressing any possibility of reshuffling; These factors all contribute to making the enthusiastic participation of subordinates in cross-organizational policy implementation difficult and relatively ineffective. Generally speaking, for any policy to be effective - whether or not it relates to integration - one-sided impacts should be avoided. Right now, the problem of scattered policy making is particularly acute. Integrated policy decisions must take into account conditions and impacts in many areas. The issue again proves that in a horizontally segmented agency, departments have little incentive to cooperate with decisions from other jurisdictions. Individual unit or sector interests have power stemming from expertise and information, and are reluctant to surrender this power to other interest groups. These issues of power are common dilemmas faced by Beijing trying to implement strategic, coordinated thinking. In response to a water shortage crisis in 2000, the BMG set up the Beijing Municipal Water Resources Commission, with the aim of enhancing the integration of water resource management and conservation. The Commission is led by Liu Qi, the previous mayor of Beijing, and comprises representatives of 17 government branches, including the Construction Commission, the Financial Commission, the Water Resources Bureau, the Planning Commission, the Municipal Administration Committee, the Agricultural Commission, the Pricing Bureau, etc. The newly established political authority is the highest authority on water planning issues in Beijing during Liu's administration. However, the old Beijing Water Resources and Conservation of Soil and Water Steering Group still exists. From documents and interviews, it appears that, in terms of  34  responsibility, the newly established commission has similar responsibilities to the old steering group. They even share the same group of people. During the interviews, a question was asked to several "insiders" regarding the functional difference between these two commissions. Surprisingly, no one could provide a clear answer. One of the officials speculated that the purpose of setting up this new commission was only to serve political purposes (Appendix, Interview 5). According to political tradition, a new leader or administration always has to set up new initiatives. The new Beijing Water Resources Commission may have been set up simply as a showcase. It is also common knowledge that repeated reshuffling is a Chinese institutional tradition (Li, 1998). By examining the government's institutional initiatives to solve water crises, it becomes apparent that the phenomenon of "formism" - bureaucracy for appearance's sake - still strongly prevails. Many Chinese scholars have articulated that formism is one of the biggest bureaucratic features extending throughout China's entire political system (Lin, 1998 & Zhang, 1999). It has severely impeded the implementation of government initiatives to support integrated management. c. Broader statutory mandates  Another alternative being used with increasing frequency is the broadening of agency mandates by law, whereby an agency is permitted to consider and act upon a wider range of objectives and concerns than their traditional mandate requires (The Conservation Foundation, 1984). One sort of stipulation adopted in several American states empowers organizations to act on the common sense proposition that it is efficient to match available water supply with users who need water of that quality. An issue that may arise from this sort of integration is overlapping responsibility, leading either to a scramble for water resources, where they are of value, or an evasion of responsibility, where problems arise. We can also look into an example in Beijing. In addition to setting up a collaborative commission, the BMG has expanded and revised the mandate of relevant water agencies. In particular, the BWRB is further recognized as the key agency tasked with coordinating the overall water planning system, and related issues. Its mandate has been expanded several times, which has led to an intersection of responsibilities with authorities in other jurisdictions. During the process of this study, many accounts were given of the history of unpleasant relations between the Beijing Water Resources Bureau and the Beijing Environmental Protection Bureau. The two agencies have rarely cooperated with one another on water management projects (Appendix, Interview 4). An analysis of the situation shows that the major reason for the hostility is that the mandates of each agency gives it the responsibility to monitor and oversee water quality issues, as well as the right to participate in water protection planning. The two agencies have the same bureaucratic rank, so there is no subordinate administrative relationship. One of the officials stated, "The competition for control over water interests creates resistance for them to implement one another's initiatives, and this negatively impacts the overall water planning process in the city." (Appendix, Interview 4) This experience illustrates why the existing Beijing municipal coordination commissions are ineffective in solving interagency conflict. The root is in relations between China's central and local  35  governments. There are three main factors which have resulted in a lack of incentive to develop stronger inter-governmental relations. First, as illustrated earlier, Beijing's government is composed of government departments and directly affiliated branches. Its constitution mirrors the "dual rule" system described in chapter 2. Government departments are set up and controlled by the BMG, the territorial administrative supervisor (and Communist Party representative), rather than by their ministerial superiors at higher levels. In contrast, the directly affiliated branches are responsible to their ministerial superior and only cooperate with their vertical territorial supervisor, in this case, the BMG. The relations among the directly affiliated branches and with government departments are weak due to the lack of human, financial and material interactions among horizontal agencies (Xie, 2000, pp26-34). For instance, the Beijing Municipal Local Taxation Bureau (BMTB) is directly affiliated with the National Taxation Bureau, so it has no administrative relations with the Beijing local government and its departments. BMTB has to carry out taxation-related tasks specified by the National Taxation Bureau. If local government asked for taxes to be reduced or waived, a conflict would arise between BMTB and other Beijing local departments. In this situation, the BMG has no authority to tackle the conflict due to the fact that local taxation rights are granted by central government (Xie, 2000, pp26-34). The local capacity has long been restricted, as the resolution of so many local issues has relied on higher-level authorities. This leads to a lack of motivation and incentives for local agencies to build up vertical networks and close relations with other agencies. Second, local government is segmented by tiaos and their self-governance, which make holistic action and development planning at the local level hard to achieve. Horizontal interagency relations are extremely rare. In cases requiring interagency cooperation, the local government is mainly engaged in two things: 1) coordinating intrinsic relations and 2) "running to Beijing" (Lin, 1998). Third, China's central government has control over most of the financial and productive resources in the country, whereas local governments have limited financial and productive resources. This leads to a lack of a material foundation for cooperation between local agencies. Meanwhile, the central government directly allocates social goods, such as material benefits, housing and vehicles. This causes competition and jealousy (Xie, 2000, pp26-34), making the BMG's coordination and integration work more difficult. The BMG and Beijing Water Resources and Conservation of Soil and Water Steering Group are subject to the difficulties illustrated above, which have reduced the effectiveness of their coordination efforts. d. Administrative consolidation  Administrative consolidation seems to be the last logical step toward integration. In the case of water resources, it would combine, in a single agency, the management of quality, quantity, supply and demand. Administrative consolidation is intended to overcome the drawbacks of the above three approaches to integration. The ideology of this approach  36  seems desirable in principle. Implementation, however, could generate both successes and failures. It seems clear that the idea of creating a unified national or federal department of natural resources is unlikely in countries with complex geographical and institutional conditions. Such consolidations have been tried extensively in municipal and provincial governance. In 1970, a major consolidation took place in Washington State, U.S.A., placing responsibility for the management of both water quality and water quantity functions within a single Department of Ecology. The newly shared responsibilities were taken so seriously that many staff members from the original agencies exchanged duties with one another (The Conservation Foundation, 1984, p53). By late 1983, however, the combined management system was failing, and responsibilities were once again separated. The experience of consolidation in Beijing has shown the benefits of integrating the management of water supply and discharge into the Beijing Municipal Administration Commission. The last restructuring of the Beijing government was completed in October, 1999, when the State Council decided that Beijing could only have 45 government branches. The original 67 government branches were restructured into 45 branches, including 25 local government branches , 19 directly affiliated branches and one municipal administration department (Zhang, 1999). During this reform, the BMG reshuffled responsibilities based on three main areas: urban planning, city management and transportation management. Water resource responsibilities were placed within the jurisdiction of city management. Beijing Public Utility Bureau was removed after the restructuring, and responsibilities for water supply, water saving, gas and heat supply were merged into the BMAC. The Beijing Planning Bureau and the Beijing Urban Construction Bureau were also removed. The pervious function of the Beijing Planning Bureau was merged into the Beijing Planning Commission. The previous responsibilities of the Urban Construction Bureau were merged into the BMAC. A new Land and Housing Bureau was set up, combining the original responsibilities of the Geography and Mining Bureau and of the Housing Bureau, which were also removed (Zhang, 1999). Figure 4.3 illustrates the new structure. 15  16  17  Government branches refer to municipal government administrative units. These units are responsible for various issues in order to make the city function. Local government branches are municipal agencies that are directly established by the municipality rather than the state. Directly affiliated branches are those agencies established by their central government counterpart. For example, the Ministry of Water Resources set up the Beijing Water Resource Bureau as their directly affiliated branch at the local level. 15  16  17  37  ao  .3> ca  "ca  Environmem ion Bureau  3  OS ON Os  S  ca 43  fi -o .2 fl  op  7  00  5  CU  E CU DA  CO  ox  £  OH  Ss  u  g  o U  T3  fi IPQ  oo  §  h  cu  £  cu ca  fl  O  00  !s  +H  C  S g  cu  .1 1 a, >»  C O  <u  o  o •C  w  u  rr  fi  t  fl  CU  -2  a eg  oo  CU  PQ  ft  o ca h cu u ^ cu oo oo rr> CH ca ca 3 o  •*-< sa  fl  o  sis  00  £  ©A  o  o  3  CU  +T>  Beij Prol  00  -e  o  In  _ o  O  fl  OH 3 CO  OO  -a  c  cu  PH OH  CU  o o  < =3  fl CU  as  a  CO  OS  cu - ao 2 co  b  *r  fl  0  ca -fl  0 ;z5  ,52  If •~ u M  a 9  ••-> u  '53 £  C3  PQ oo  pq p-i  3  M  o CO 3 O  X  OH  ap  .3  cu  T3  -a  Sc3 J  3 cu lH  3  _£9_ 3  ca  o  ^  eg  kH  « £  cu 13  N  OS OS OS  O  cu ca  a cu  co cu  cu  (H OH CO "O  > o  "3  ao  *cu >  cu  ca  00  .3 S  a  c  s 1 ea1 "O aca cuca>cu*cu Jrg X fl ^  c  fl o  u  £  3  acu  ao ca CU  c  C3  ao  .3 '53 «  ,5 03 3 OO  ao n • £7* CO CD <D  3  ap  From the table above, it can be observed that the city is trying to combine water supply, wastewater discharge, and water use management into one organization. The total number of major water management agencies is reducedfrom6 to 5. The assumption behind the reorganization is that implementation obstacles can be overcome through the integration of operations into one regulatory body. While the possible costs of restructuring, such as program disruption, must be recognized, a clearly delegated and well-designed consolidation should produce long-term improvements in water policies and program operations, thus compensating any short-term costs. Another serious drawback to integration is that trying to combine responsibilities for water quantity and water quality makes it harder to integrate water quality projects with air and solid waste regulations. Whereas integrated water, air and solid waste regulations prevent the transfer of pollutionfromone medium to another (The Conservation Foundation, 1984), putting water pollution responsibilities into an integrated water management ministry makes it difficult to enforce such regulations. Ending managementfragmentationin one area can thus cause it in another. Since the restructuring of 1999, it has been acknowledged that Beijing's water system has improved. It is, however, too early to tell whether this approach will allow Beijing to reach its objective of "further integrating responsibility to improve inefficiency". Some water-related experts are concerned that the situation of competition among agencies for control of water resources still exists (Appendix, Interview 3). As one hydraulic engineer noted, "Restructuring doesn't guarantee the improvement of administrative efficiency. Chinese bureaucracy is resilient" (Appendix, Interview 3). The present controversy over the authority for recycling treated water illustrates the problem. Guantao Wang, the mayor of Beijing, directly instructed that water recycling was the responsibility of the BMAC. The BWRB, however, also attempts to control water recycling, since it has the mandate for macro-scale control over water-related issues, as the principal water management agency. This case demonstrates that administrative consolidation has not resolved the issue of overlapping authority. The administrative consolidation approach is increasingly applied in the arena of natural resource management. The desirability of this approach depends on whether or not it is functionally practical, appropriate to local conditions and politically realistic, as well as on the scale of the geographic boundary. Without these considerations, consolidation is unlikely effective or worth its cost. Compared to other models, consolidation seems promising as a way to reduce fragmentation in water management. Less radical approaches, such as broadening statutory mandates, coordinating existing institution and increasing awareness of the issues by broadening traditional cost-benefit impact assessment, may not work well when tackling such individualized and institution-driven issues as water management in China.  Chapter 5 An Integrated approach  39  5.1 Concept of Integrated Management  The integrated management of water resources is not a new concept. However, the notion of "integration" is evolving. Traditional use of integrated models deals more with the complexities of the administrative adjustments evaluated in previous chapters. The integrated approach to water management builds upon these adjustments, but not exclusively. Using the analogy of a computer, the new approach places more emphasis on upgrading software, or the water planning system, than it does on upgrading hardware, which, in this case, is the physical administrative structure. It is easier to reorganize bureaucratic departments than it is to develop a truly integrated and principled water planning system, based on Beijing's specific institutional and physical conditions. Despite the challenges and uncertainty, a greater degree of integration remains desirable where it can be obtained. This paper intends to initiate critical dialogue to explore effective integrated water management strategies for Beijing, and the rationales that support these strategies. It represents an initial exploration of the topic and does not purport to present a definitive solution. The problem of regional water resource management is well known and has been addressed by many scholars. Evidence of severe water resource shortages across North and South China indicate an urgent need for a serious and effective handling of the situation. More recently, the concepts of ecosystem analysis and sustainability have been introduced to the literature (Caldwell, 1988). People's knowledge of the complex interconnections of land, water and air systems in urban-dominated watersheds has expanded significantly during the past decade. As a result, the way in which we manage water and surrounding ecosystems in different regions of the world has changed fundamentally. Management approaches have changed from supply management to a balanced strategy of managing both water supply and demand, accompanied by effective institutional reform. Too often the institutional arrangement (laws, policy and organization) of water resources and the planning of water use have been the greatest impediment to effectively managing water resources. They are generally complex, bureaucratic,fragmented,inadequate, unresponsive and poorly integrated, and they result in systems that have poor accountability, lack foresight and prevent open communication and robust debate between stakeholders (Marino, 2000). The traditional organization models that worked in the past, such as the regional watershed management model, the urban and rural decentralized water management model, the river basin collaboration model, and the urban water affair management model, have faced big challenges. The new models that will replace them are in the process of emerging and being defined. Given the complex and multidimensional (ecological, social, and economic) nature of water management and its integration, the emergence of an integrated approach to water resource management, backed by appropriate legislation, is one of the most promising features of many current initiatives to tackle the management problems. 5.1.2 Principle and components  An integrated approach to water management is critical. However, what exactly is meant by an "integrated approach"? There are no refined, unifying definitions existing in the literature. In general, however, it can be described by reviewing its development process. As alluded to earlier, it is not a new concept: "integration" was emphasized at the OECD  40  Council in 1989. It stemmed from the need to reform scattered institutional arrangements governing water management, including administrative and legal structures. "The administration of water resources is fragmented among many ministries, authorities and committees, and has contributed to mismanagement and inefficiencies in water distribution and use" (United Nations, 2001, pi8). At that time, the focus was essentially on the mechanism of government in water policy development and implementation (OECD, 1998). Therefore, "integration" referred to the integration of water quality and quantity management and holistic water resource management. The notion of "integration", however, is continually evolving. More weight is being given to full recognition of the water environment, methods of allocation and institutional reform. The OECD workshop on sustainable water consumption, held in Sydney, Australia in 1997, led to further progress in the development of the "integration" concept. Participants stressed that major steps must continually be taken towards the basic reform of creating an institutional framework in which water can be managed holistically. In addition, participants broadened the concept of integrated management, identifying priorities and placing emphasis on two in particular: 1. Full recognition of the environment as a water "user", and the ability to identify the minimum water requirements needed to support ecological systems, as critical factors in determining the optimal allocation of water resources (OECD, 1998); and 2. Greater involvement of water users, including the private sector and communities, as a fundamental element of successful strategies for sustainable management of water resources (OECD, 1998). 5.1.3 Mandate  The broad objective of integrated water resource management is to contribute to future sustainable water development by changing the patterns of planning and mechanisms of governance. The integrated approach attempts to respond to some of the key issues concerning water management. These questions include: • • •  What can we learnfromtraditional water management approach? What approaches to water resource management involving a very large and complex context are found to be effective? How can policy addressing water sustainability be implemented more effectively in coping with the severe water scarcity?  5.1.4 Components  In order to achieve the desired objectives, many arguments concerning the application of this approach are raised. Although any policy or action of any country should be shaped by its natural conditions and by its political and cultural environment, some important common components of an integrated approach are identified by the United Nations (United Nations, 2001):  41  1. Clearly separating planning and regulatory operations, on one hand, and physical operational tasks, on the other hand; 2. Defining the scope of government involvement in water management; 3. Overcoming the current fragmentation of institutional responsibilities, where numerous agencies are involved in planning and policy making that influence environmental protection and water management efficiency; 4. Specifying the responsibilities delegated to the different agencies involved in handling water resources; 5. Ensuring that the empowered authorities match their designed responsibility; 6. Designing the organizational structure related to data collection, analysis and dissemination as well as those related to human resources development; 7. Ensuring an adequate and appropriate process to allow for stakeholder involvement in the decision-making process. 5.2 Water affairs bureau in China  Looking at other parts of China, there is a national initiative to ameliorate water management by establishing Water Affairs Bureaus. The first Water Affairs Bureau was established in Shenzhen, a city in South China, on July 1993. As of the end of 2001, the water affairs management model had been adopted by 28 provinces, autonomous regions and municipalities throughout China. A total of 633 water affairs bureaus have been established, among which are 3 provincial level bureaus, 61 local and 569 county level bureaus. In addition to setting up water affairs bureaus, some local or provincial governments have started to allocate the responsibility for comprehensive water planning to their local Water Resources Bureau. By 2001, 286 such cases had been initiated (Wu, 2002). Unlike previous systems, water affairs bureaus use a quasi-integrated management model to focus on both urban and rural water management. In general, excepting the peculiarities of each case, the initiative tries to gather responsibility from all related organizations into a new unit. In particular, water supply and demand management are integrated. Water supply management includes surface water, underground water, tap water and private well water supply. Water demand management includes household water, industrial water and environmental water demand. The integration is implemented through 10 approaches, including standardization of bylaws, policy, planning, allocation, monitoring, standards, pricing, provision of water permits, and charging water fees (Wu, 2002). The benefits of greatly increased levels of integration have already provided incentives to continue the initiative: 1) to some extent, it overcomes the drawbacks of overlapping responsibility, responsibility avoidance, and low administrative efficiency entrenched within the old system (Zhao, 2002); 2) it greatly alleviates the water supply shortage by optimizing resources allocation, water conservation, and comprehensive planning (Zhao, 2002); 3) the system is set up for separating physical operational tasks from planning. Those operational tasks not managed directly by the government are given to the market. For example, Shanghai and Shenzhen both set up affiliated water resource management  42  companies attached to their respective water affairs bureaus in order to manage nongovernmental water responsibility by using market forces (Wu, 2002). Many analysts recognize that the initiative is still in the preliminary stages, as there are issues yet to be resolved (Zhao, 2002): 1) Issues of Awareness. Some local officials believe that the establishment of a water affairs bureau simply represents another loop of responsibility reshuffling between agencies, rather than a consideration of the issues from a holistic perspective of optimizing allocation and comprehensive planning; 2) Issues of Implementation. Most water affairs bureaus still directly control water supply, wastewater discharge and sewage treatment from planning to implementation to management. This disregards the principle of separating planning from physical operations; 3) Issues of Policy Timing. In the process of reform, relevant policy often lags behind actual management. For example, criteria for the evaluation and monitoring of new systems is often incomplete when the such systems go into operation. 5.3 The integrated model for Beijing  How do these components - the UN concept for an integrated approach, the growing number of water affairs bureaus in China, and Beijing's current approach to water management - interact in regard to future water management practices in Beijing? Chinese water management reform in general is beginning to modernize. According to the aforementioned UN principles of integrated management, the establishment of water affairs bureaus in China is a significant step in therightdirection. China's national institutional reform helped begin water management restructuring and support for local initiatives continues to aid the development of new water management strategies. These efforts have begun to produce lessons that might guide future sustainable water development and initiatives in Beijing. From these experiences, it is possible to conclude that local governmental initiatives in facilitating comprehensive planning, supporting integration of authorities and separating government and non-government function are crucial to the successful management of water resources in Beijing. However, there are a number of factors preventing water management initiatives in Chinafromapproaching those suggested by the UN. Among these factors is the barrier imposed by the nature of the Chinese institutional environment. In China, when trying to initiate any changes in its bureaucratic system, it is critical to understand the institutional barriers that impede initiatives, and how these barriers are formed. These barriers were analyzed throughout this paper. In this chapter, we want to emphasize some ideas which were overlooked by China's current initiative. It is important for Beijing to consider these initiatives in order to further integrate its water management system. My paper supports the increased adoption of initiatives towards an integrated water management system in Beijing. The concept of integration should be broadened considering the need to alleviate bureaucratic barriers entrenched in the Chinese political system. Simply merging or abolishing units and redesignating responsibility do not deal adequately with the resiliency of Chinese bureaucracy; other complementary initiatives must be considered for Beijing's reform.  43  5.3.1 Readjusts central and local relations  For an integrated water management model to function well, water-related government authorities have to be reshuffled into one new established organization. It is necessary to point out that such a model doesn't imply that a single unit can exert full control over policy and implementation. While this new model avoids interagency negotiation to a great extent, its function still depends upon interagency cooperation and internal collaboration between sectors. My paper demonstrates that individual bureaucratic units have the ability to pursue strategies which reduce control by superiors and which enable them to survive and expand, despite the enormity of the task. It also illustrates that the special nature of Chinese political culture shapes organizational behaviours towards pursuing parochial personal or sectoral interests rather than long-term holistic interests. However, the failure of Beijing's many years of cooperation efforts vividly illustrates that structural fragmentation forms the fundamental impediment for interagency relations, and that the core issue is central-provincial relations that instruct interagency and intergovernmental relations. Improving water management efficiency calls for decentralization of administrative authority to local government. Many researchers have published studies on Chinese bureaucracy, and they observe that under the traditional system, the more centralized the institutional power^ the more difficult intergovernmental and interagency relations become (Lin, 1998). Chinese institutional reform has undergone cycles of centralization and decentralization throughout its period of economic transformation. Researchers explain that a primary cause of non-productivity in decentralized systems in China is the vertical chain of authority they employ. Decentralization in China, rather than transferring decisionmaking power to local authorities and local communities, directly transfers power down each vertical ministerial line (Lin, 1998). As a result, local authorities, such as the BMG, have not been given enough power to regulate vertical relations. This form of power decentralization will only lead to disorder (Lin, 1998). Susan Shirk argues that the founders of communist states create institutional structures designed to produce their preferred policy actions. Communist leaders are therefore more free to restructure institutions than are leaders in democratic regimes bound by constitutions (Shirk, 1993, pi07). According to this bureaucratic feature, Xie Qingkui argues that in order to ameliorate interagency relations and bring real authority to the local government, the centre must: 1) regulate any restructuring through a constitution rather than simply follow its leader's wishes; 2) reduce the number of directly affiliated vertical agencies; and 3) gradually decentralize power to local authority to realize local autonomy (Xie, 2000, pp26-34). The lesson is that in order to truly integrate water authority in Beijing, reform must comply with decentralized operating and planning systems. Real power must be brought closer to local communities and governments. 5.3.2 Greater Marketization  The introduction of China's planned economic system, and of state-owned enterprises in particular (presented earlier), provides a background for further discussion of the incorporation of market forces in managing the traditionally government-dominated water arena. The basic issue is that the government has been directly managing facility  44  construction, productive operation and management of their affiliated enterprises. This leads to serious operational inefficiency, excessive bureaucracy, and non-productive behaviours. For example, the Beijing Watergroup Company controls urban tap water supply. It is a state-owned enterprise affiliated with the Beijing Municipal Planning Administration Committee. When the Beijing Public Utility Bureau was dissolved during 1999's institutional reform, its party secretary-general and director were reassigned by the Beijing administration to the Beijing Watergroup Company as president and general manager respectively. The government regularly intervenes with the management of the tap water supply. For example, if the company cuts off the water supply to units or companies that have not paid their water utility bills, the government will intervene immediately and order the company to return services first, and negotiate later. Often, the overdue charges are never repaid, resulting in economic loss for the company (Appendix, Interview 6). This case illustrates the control exerted by the government on the enterprise's operation and management, as well as human resources. As China continues its economic reform, traditional models in which the government assumes complete responsibility for construction, investment, and operation of natural resources have been met with strong criticism. The issue is multi-faceted. On one extreme, the conventional Chinese perspective holds that public infrastructure services, such as water and electric power supply, petroleum and so on should be managed and controlled directly by the government. At the other extreme is the view that these services should are best managed by the free market. According to the public goods theory, quasi-public goods like water cannot be well managed without the government playing a key role in both leadership and monitoring (NEPA, 2002). This lesson was made apparent when developed countries began utilizing private capital and involving private companies in public infrastructure construction. In the early 20 century, governments in the U.S. and U.K., lacking financial resources, contracted out long-term public services to private enterprises; as a result, the majority of gas, water, transit, and freeway services were constructed and operated privately (NEPA, 2002). However, problems promptly arose, with inadequate facilities, escalating service charges, and political corruption typical. As a result, responsibility for public infrastructure construction and services returned largely to government hands. This in turn led to new problems. Heavy government financial burdens and inefficient construction and operation made a complete withdrawal of public servicesfromthe market problematic. In the 1980s, industrialized countries began forming public-private partnerships (PPP) to jointly manage public infrastructure. This approach employs private financing initiatives (PFI) in facility construction and operation. The government in turn has a constitutional responsibility to monitor related activities. th  China has been absorbing these lessonsfromwestern nations and is slowly paving its own path towards a market economy. There are presently four approaches to public facility management, which vary according to their degree of private involvement: government ownership with government management, government ownership with private management, private ownership with private management, and a household and  45  community self-management model (NEPA, 2002). To date, China has tried each of these approaches, with the exception of the private ownership-private management model. In the government ownership-government management model, the government invests in the construction of public infrastructure; utility operation is also the responsibility of the government, through state-owned enterprises , public facilities and collective enterprises , using market-based instruments. Beijing and Shanghai have implemented this model to improve their urban sewage and solid waste management system. At present, Beijing has completed the reform of its sewage treatment system. Previously, its sewage treatment plant was managed by a discharge company affiliated with the Beijing Municipal Administration Commission. In 2001, the original discharge company merged with four district level sewage treatment plants to form the Beijing Urban Water Discharge Limited Cooperation. The government granted the company the authority to control sewage discharge management, urban water discharge pipelines and pump house management as well as some other state owned propertyrights.It also required the company to manage the resources based on the principle of marketization. The company must be self-sustaining, and is responsible for any surplus or deficit, and adjusts sewage discharge fees and management mechanisms accordingly. Compared to the traditional management model of state-owned enterprises, the reform has reduced operational costs, increased efficiency and alleviated government financial responsibility by using private capital in operation and management. With regard to building infrastructure, however, this kind of reform does little to alleviate pressure to spend public funds. The initial investment and construction responsibilities remain in government hands. Only the operation and management responsibility are allocated to market forces. 8  19  20  The government ownership-private management model brings the reform closer to free market principles. Under this scenario, the government retains ownership, but allocates operational and fund-raising responsibilities to private hands; thus, facility operation, investment, management, profit generation andriskmanagement all belong to private enterprises. There are two basic application models in China: the Building-OperationTransfer (BOT) model and the Transfer-Operation-Transfer (TOT) model. In BOT, the government enters a contract with a private investor, who assumes responsibility for fund-raising and construction of public facilities. During the contract period, the investor owns, operates and maintains the public facility, earning profits through service fees. At the conclusion of the contract period, the facility is turned over to the government free of charge. According to online literature, approximately ten BOT projects have been implemented in smaller cities across China (NEPA, 2002). TOT development is identical to BOT, except that instead of building the infrastructure, the private investor purchases an existing public facility based on assessed property State-owned enterprises refer to state-affiliated factories or enterprises which produce economic goods. Public facilities refer to state-affiliated educational, cultural and hygiene units. They have no productive income and are totally financially dependent on government. Collective enterprises refer to enterprises under common ownership or control of a society or a community to produce basic productive and welfare resources. 18  19  2 0  46  value. To date, this strategy has only been implemented once, in the case Shenzhen's sewage treatment facility. Compared to the BOT and TOT models, the government ownership-government management model is relatively stable and low risk. BOT and TOT involve greater risk due to a lack of supplementary policy and bylaws supporting the initiative. In China there is a political slogan that "stability surpasses everything", which reflects an ideology deeply embedded in the minds of politicians and citizens alike. Beijing, owing to its special political status as the capital of China, is relatively conservative and thus has less opportunity to implement more radical models than many other cities. Change requires a complete breakfromthe old system. For China's policy environment to favour market development, it must adequately deal with relations between market and government. 5.3.3 Greater public involvement  An integrated water management system will generate better and more comprehensive policy decisions by incorporating a wider range of stakeholders and methods. The old cost-benefit analysis and top-down approach will be gradually replaced by a multistakeholder model incorporating multiple perspectives. This new paradigm requires a restructuring of existing institutions. A better decision-making process will require some degree of regulation to establish the rules by which the system will operate. According to the arguments made by Fu and Ding, however, China's tradition of noninstitutionalization makes the decision-making process more subject to individual and organizational biases. Decisions are largely dependent on the judgement of the unit head (Ding, 1994), rather than on stakeholder input. China has been practicing top-down decision-making processes throughout its history. This has led to a system of centralized authority unable to meet local needs. The communist party makes national laws and policy that can only represent citizens' interests in the broadest, most basic sense. Moreover, key authorities are not publicly elected. Public agencies are responsible only to their higher-ranking agencies, and do not protect public interests. Public participation is virtually non-existent. Despite this, there are some advantages to a top-down approach. Top-down decision-making processes may be less time-consuming and more efficient. Compared to the merits, the drawbacks are more obvious. Because procedures and rules stem lessfromscientific analysis than from biased decisions, the public self-interest is not always well-served (Zhang, 1994, pp6068). The barriers to public input make the legislation process irrelevant to most people. Laws are imposed upon citizens as a state mechanism to control people's behaviours and personal lives. As a result, the effective implementation of policy and law is always in question. The current, unstructured decision-making mechanisms are unlikely to succeed in the difficult task of balancing efficiency, equity and environmental quality. Simply inviting experts to participate in discussion is not enough. Under the heavy pressure of China's strong bureaucracy, some experts and technicians forego their professional responsibility and follow the wishes of unit heads (Appendix, Interview 7). Some scholars suggest that  47  the new decision-making model will be an essentially regulatory administrative process, which includes a multi-stakeholder approach (The Conservation Foundation, 1984). There are a growing number of cases where water management is changing from a narrow, top-down, decision-making process to a broader, bottom-up decision-making process incorporating a wider range of perspectives. While some may interpret this as identical to the conventional processes of public consultation described in chapter 2, the concept has broadened into a multi-stakeholder decision-making process. "Involving water end users in the development and implementation of water management policies, including setting objectives and choosing appropriate implementation tools, was considered to be key to making wide-reaching reforms in the way water resources are drawn upon and used" (OECD, 1998, p29). In many countries, the roles of various usergroups (multiple stakeholders) are being effectively promoted. For example, in Korea and Japan, farmers have organized themselves into user groups to get involved with irrigation water management. In these cases, the farmers associate informally. In other cases, groups are more formalized. For example, in France and Australia, user groups are a driving force spurring the reform of water use and management (The Conservation Foundation, 1984). NGOs have often been very active in facilitating multi-stakeholder processes, which ensure that all interests are well represented and are the best tool to help achieve the agreed objectives. Many experiences have shown that the multi-stakeholder approach helps to build ownership of the issues among stakeholders and create a broader spread of responsibility and manoeuvrability in finding solutions to the problems. Another advantage of this approach in water management is that it can stimulate and monitor regulated government behaviours, and discourage the phenomenon of "following unit heads". 5.3.4 NGOs development  According to modern political theory, the expression of direct public opinion and the involvement of the public in policy decision-making are fundamental features of a democratic society (Fu, 1999, p55). In particular, public involvement in developing legislation and regulations is essential. In this regard, NGOs in the western world can and do play a very active role. In many cases, their ability to represent the public's best interest is enhanced by their independencefromthe government, which allows them to express contrary views. NGOs in China, however, because they lack this independence, have never had the same degree of influence. Chinese NGOs are normally research, social or cultural affiliates of higher-level government organizations. They are not only registered with the government, but also directly associated with the state bureaucracy. The majority of funding they receive is from the government, as are a large number of officials serving within them (Schwartz, 2004). It is well-known that Chinese Governmental NGOs (GNGOs) are units to house retired and transferred government officials. Their autonomy, therefore, is limited. This directly constrains their ability to take critical positions with regard to government policy on civil issues. Instead, they tend to take on the roles in education, awareness-building and propaganda dissemination for the government (Schwartz, 2004).  48  International experience indicates that the development of China's NGOs may offer an external institutional approach to facilitating and strengthening the sustainable development of Beijing's water resources. Institutional theory suggests that "the practices and structures that modern organizations have adopted are well entrenched and may be more difficult to change than the values and beliefs of individuals themselves" (Devereaux, Zandbergen and Clark, 1999, pp54-64). According to this theory, external forces, particularly large-scale forces, can drive changes in institutional behaviours more effectively than small-scale, internal activities done by individuals. It is accepted today that cumulative action can be a very effective external driving force. Additionally, if stakeholders come from diverse backgrounds, the changes affected can be massive. The effectiveness of external forces on policy, social and institutional changes can be limited if there is a dependence on the gathering of voluntary information from communities, such as mail-in surveys or complaint letters and phone calls. Only a rational and organized group within society can become politically conscious and mobilize against an authoritarian ruler or system. Establishing a structure for external forces can, therefore, be one way of stimulating and directing change in institutional behaviour (Devereaux, Zandbergen and Clark, 1999, pp 54-64). The integrated water management model might be used as a decision aid - a guide for open discussion process among stakeholders, includes officials, experts and citizens. NGOs gather participants in groups not only to observe and to listen, but to fully participate in organized discussion. The integrated model can be of great help in enhancing communication even amongst participants who speak different languages. The debates are focused and well-generated, which offers legitimacy and acceptance of the development policy decisions. In recent years, there have been two significant changes relating to government controls over GNGO development in China. First, the financial resources of GNGOs are changing from relying entirely on government subsidies to relying more on society and community funds. Each year, the government cuts off more of itsfinancialsupport to GNGOs, leading the GNGOs to turn to society for financial support. Second, the government's control over the activities of GNGOs is changingfromguidance on "what you must do" to direction on "what you can not do." This significant policy change gives GNOGs more authority and flexibility to carry out community-based action (Appendix, Interview 1). The positive development of environmental NGOs in China over the past few years offers hope. Compared to environmental NGOs, the development of water-related NGOs has been very limited. Through interviews conducted for this paper, it has been revealed that several factors have impeded the development of water-related NGOs. The first impeding factor is that politicians' and citizens' awareness of water issues was, until recent years, very limited. Water issues were not a part of Beijing's priority agenda until the late 1990s. Citizens were not aware of the water crisis until 1999, when Beijing was forced to draw upon its water reserve for thefirsttime. Comparatively, entering the 21 century, the worldwide environmental protection movement has stimulated China to reflect on the tradeoffs of its development. Beijing has been under international surveillance since early 1990s and the daily air quality forecast at the end of the news illustrates that environmental issues have been given a significant amount of attention st  49  from the government. Environmental NGOs have therefore been given increased opportunities for development. The second factor is that the central government has less control over environmental issues than it does over water issues. Water management has been in the hands of government since 1949. All kinds of party hierarchies, government bureaucracies, and systems of power intersect and collide in the arena of water management, making the effort to rationalize its management extremely complicated and difficult. This prevents water-related NGOs from developing. Compared to water management issues, environmental issues are relatively new and distant from China's battlefields of power and interests. In the case of environmental issues, it was possible for counter-elite groups to manipulate relatively simple state institutions. The third factor is the technology and knowledge barrier, which keeps people away from engaging in water-related issues. People hear more about global warming, greenhouse gas emissions and other environmental issues than they do about technical problems relating to water quality. People still regard water as a "technical" issue that they cannot or need not understand, mainly because the severity of the issues has not surfaced until recently. This shuts the individual offfromengaging in challenges relating to solving water problems. As a result, NGOs lack sufficient numbers of well-trained members; as a result, their capacity to evaluate or influence water politics is limited. The fourth factor is a combination of human resources and financial issues. The majority of emerging environmental NGOs in China have been established and managed by Chinese students who have studied overseas and returned to China after Deng's reforms. They bring back not only human resources, but also funding. Due to the policy orientation, however, few Chinese scholars have been sent overseas to study waterrelated issues. High quality and open-minded water resource technicians are seriously lacking. Although the old generation of high-level water experts who received advanced domestic education are competent enough to push forward China's NGOs development, they have problems generating the necessary funds. All these barriers impede the development of water-related NGOs in China. There is a lack of awareness of the significant impact that NGOs can have in pushing the sustainable water development agenda forward. Since state institutional reform might include separating government unitsfromtheir affiliated research duties, China's waterrelated NGOs may have a chance to fulfill these responsibilities. 5.3.5 Enhancing capacity building  Looking back to the three major bureaucratic restructurings (and to the fourth, which is ongoing) during the twenty years of China's economic reform, one sees a cycle of contraction-expansion-contraction. This has been described by one commentator as a "beard shaving reform" (Zhang, 1999). The comments reflect the shallow and disorderly nature of Chinese bureaucratic reform. According to Weber's organization theory, organizational staffing, structure, and operations affect the distribution of political power and strongly influence the formation of public policy on a wide rang of issues (Li, 1998).  50  The integrated water management model aims to simplify organizational structure, reduce the number of staff, and to improve operational efficiency. In order to avoid repeating the same mistakes of the past and bring water management to a new level, however, the analysis of lessons learned from previous administrative restructuring can contribute to the effectiveness of the a model. Four main weaknesses in past bureaucratic reforms are discussed below. 1) Lack of resolution and courage. Market mechanisms change the approach whereby government is the main body to allocate resources. There are significant changes to function, power relations and management approach. The government's administrative responsibilities must be readjusted accordingly, as well as its system, structure and staffing. However, the past restructurings have unfortunately been based on simple merging or removing, under the premises of maintaining the old power pattern and traditional management model. The power relations between government, enterprises and society have not been modified in order to meet the needs of a market economy. Reform is expedited under the pressure of bureaucracy and financial crisis. One explanation for this is that the party may lack the type of resolution and courage that would enable thorough redistribution of power and interests. Although the top leaders have adopted a series of policies to introduce market mechanisms, they have strongly resisted attempts to alter the property rights of state enterprises (Hua, Zhang, and Luo, 1988). 2) Lack of a sound social environment. Government-run enterprises and GNGOs are the two main types of organizations which employ laid-off government officials. Due to the decrease in the productivity of enterprises and the inefficiency of internal management, however, they cannot continually accommodate more laid-off employees. First, the requirement to provide adequate social security coverage, especially for pensions and for the restructuring of medical and unemployment insurance, makes the laying off of large numbers of workers subject to enormous risks and social pressure. Second, the ideology of the entrenched traditional bureaucracy is another important social barrier to the implementation of change. Bureaucracy and departmental interests influence the political environment far more than does public opinion. Third, the current structure of the personnel system in the Chinese bureaucracy demonstrates that the selection criteria used in recruitment and promotion is unambiguous. Selection for a particular position is sometimes based on political loyalty rather than on competence or qualifications. Government positions are often a reward to bureaucrats granted by high-level leaders (Appendix, Interview 8). The almost lifetime tenure of positions make the personnel rearrangement even more difficult. These factors form an enormous impediment to reshuffling personnel during administrative reform. 3) Lack of theoretical research and scientific testimony. A review of Chinese literature in search of Chinese scholars' opinions on how to improve Beijing's water management system reveals that, although many officials or researchers support the integrated management model as the most desirable model for Beijing to adopt, the grounding theories to support their argument are hard to find. Instead, top leaders'  51  speeches or slogans are often quoted as the scientific foundation to support arguments. In fact, some officials who themselves are dissatisfied with the current situation, have commented that that in China, not enough effort has been made to formulate tightly organized and testable theories relating to Chinese public administration (Mills and Nagel, 1993, ppl3-14). Research departments are more focussed on planning and granting work permits than on carrying out rigorous research. Public administration theories are limited to the micro-level and most of them are borrowedfromthe west. Theoretical research aims to develop a better understanding of administrative phenomena. Theory-building is therefore essential to develop a better understanding of certain issues. Past experiences show that the process of reforming the Chinese bureaucracy will fail without serious scientific analysis. Solutions to problematic issues must be based on a solid theoretical foundation. 4) Lack of legislation to govern bureaucratic organization. Many scholars and officials state that poor laws are the basic cause of bureaucratic problems and believe that the development of public administration law will increase government efficiency and mitigate bureaucratic problems (Mills and Nagel, 1993, ppl3-14). The government, however, is not able to use legislation to enhance the outcome of its reform. "Transform responsibility - adjust organization - set up legislation" is a valuable formula that has been generated after many years of lessons learned. In the process of reform, however, the last step is always ignored. Due to a lack of legislation, the outcome of a reform is hard to sustain.  52  Chapter 6 Conclusion The analysis and observations in this paper deal with assessing the effectiveness of water resource management systems in helping to move Beijing towards sustainability. The following is a summary of findings. This paper has explored the impact of initiatives, which have been developed in conjunction with a new management model proposed by the United Nations' (the integrated management model), on the creation of new approaches to advance water management in Beijing. The study has showed that there are great advantages to utilizing this new model to overcome bureaucratic impediments in improving management issues. Structural integration is key to the proposed model. Our analysis draws from the information gathered through interviews and evaluation, as well as from a wide review of documents and literature. The paper began with a discussion of the significance of China's institutional environment in impeding progress towards effective water management. It was noted that the water crisis in Beijing is not a result of technical inadequacies or physical limitations alone, but rather is caused by unwise and mislead human choices. Such choices typically are shaped by reckless government policies, unwise regulations, inappropriate legal constraints and ineffective organizational arrangements. This paper has highlighted the importance of analyzing three contextual factors - economic, political, and cultural - that influence the formation of strong government initiatives to improve management. After analyzing these contextual factors, the paper discussed empirical findings to determine whether the integrated model can contribute to changing any of these negative practices and enable improvement. There is a need for an analytical framework that can ultimately help define the conditions under which various types of models may be implemented to improve efficiency, and the conditions under which the models may encounter difficulties. Once these conditions are recognized, it will be possible to identify methods and services that meet the conditions. A thoughtful assessment of the existing water management system in China in general, and in Beijing in particular, provides a reference against which new initiatives can be built. The framework will facilitate the examination of various models with different organizational arrangements. This will assist in evaluating the effectiveness of applying an integrated approach to water resource management. The analysis of empirical findings from literature reviews and interviews reveals that an integrated system can help to create a holistic model which encourages and sustains cooperation between staff and organizations. Comparing different models suggests that the integrated model can help advance water management issues to a new level. The proposed model: 1) consolidates water resource development, supply, demand, discharge and sewage treatment authorities into one organization, reducing the chances of conflicts between authorities; 2) will help officials and the public recognize the underlying, interconnected features of water resources that require a more holistic system of planning; 3) complies with the principles of China's institutional reform (organizational simplification, cadre system simplification and separation of government responsibility  53  from physical operation) and is therefore feasible and reasonable; 4) will help to reduce the chance of unnecessary interagency coordination by legitimizing administrative consolidation through legal mandate, and will therefore reduce parochial bureaucracy; and 5) will, to a great extent, enable the unification of policy and bylaw, thereby alleviating the situation of policy diversification. Based on the findings in Beijing and other cities identifying behavioural and institutional impediments to change, it is apparent that, without broader institutional change, creating a single agency cannot eliminate all of the negative behaviours and perceptions. Integrated management includes more than simply piecing together authorities. Although it is beyond the scope of this paper to deal with each and every factor, several key factors have been identified. One of the comments raised during the research interviews prompted a reconsideration of the impacts that establishing a single organization can have on institutional behavioural change. An official stated that "Deng Xiaoping's theory of 'socialism with Chinese characteristics' covers China's bureaucracy and its unregulated society with a beautiful veil." Institutional change is a very complex issue subject to a variety of political, social, cultural, economic circumstances. 21  The integrated model, which focuses on greater democracy and marketization, targets the institutional capacity for change. It seeks to: (1) increase knowledge and awareness of how personal values, habits and perceptions can impact the problem and how social and institutional environments relate with the problem; (2) improve the institutional environment by promoting readjustment of central and local relations, strengthen and maintain local governance and reduce central control; (3) support the development of NGOs in order to create new pressure for political change and openness; (4) stimulate greater marketization to reflect full cost and to improve the management of public goods; (5) increase public involvement in decision-making to create legitimacy and acceptance of the development policy, as well as to replace the party as the third eye monitoring government behaviour; and (6) enhance capacity building through strengthening theoretical research, improving to legislation to govern bureaucratic organization and building a sound social environment. The essential utility of this model is that it enhances people's capacity to alter their behaviour and surrounding environment to enable gradual change. The United Nations clearly identified existing institutions and organizational arrangements as key factors in determining whether or not objectives and strategies can be achieved in practice. The findings suggest that the model of reform needed in Beijing's existing institutions in general, and in its organizational structure in particular, must meet evolving water demands, in terms of both quantity and quality. The site investigation and interviews discovered that there is a discrepancy between the focus of government initiatives and citizens' perception of what the focus should be. The study therefore urges Beijing to start addressing water sustainability by considering ways in which the city can foster a stronger relationship with local community members. The integrated format can be designed as a participatory planning framework to help bring in  2 1  The identity of the interviewee has been kept anonymous to protect their privacy.  54  new ideas and perspectives, which may help the city re-evaluate its current management practices. The creation of a new institutional framework that reflects the special values and diverse characteristics of water, with the goal of balancing competitive users, is a major challenge to water sustainability in Beijing. The application of an integrated approach to water resource management will be an effective method to deal with the problems arising from structural impediments.  55  References Asian Development Bank 1993. Managing Water Resources to Meet Megacity Needs, Proceedings of Regional Consultation, Asian Development Bank, August  Bamett Doak and Vogel Ezra 1967. Cadres, Bureaucracy, and Political Power in Communist China. 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Tianjin People's Press, Tianjin, China [Chinese] Xiandai zhongguo zhengfu guocheng  61  Appendix: List of Interviews Interview Position # 1 Civil Servant  Unit  Type  Date  Place  Ministry of Post and Telecommunication in 2001  Interview  2001. 7 2001. 8  Beijing  State Environmental Protection Agency  Interview  2002. 7  Seattle  2  Director  3  Senior Beijing Municipal Institute Engineer of Hydraulic Engineering Planning, Design and Research  Interview Personal Email  2001. 8 2002.12  Beijing Vancouver  4  Director  Chinese Environmental Science Association  Interview  2001.6  Beijing  5  Civil Servant  Ministry of Water Resources in 2002.  Email Interview  2002.12  Vancouver  6  Engineer Beijing Watergroup Company  Interview  2001.8  Beijing  7  Chief China Water Supply and Engineer Drainage Association  Interview  2001.8  Beijing  8  Civil Servant  Interview  2001.7  Beijing  Ministry of Communist Party Organization  62  


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