China Water

China Water: In what could be a boost to China’s wastewater treatment (WWT) companies, China Business News reported that the State Council, is considering a Rmb2t (US$321b) action plan to tackle the problems of water pollution in China. The ambitious plan involves ensuring the availability of safe drinkable water as well as improving China’s water quality and maintaining the entire water eco-system. When implemented, the policy will be another major boost for China in curbing environment pollution, following the rollout of China’s Air Pollution Prevention and Control Law in 2013. According to the Ministry of Environment Protection, up to 10% of China’s surface water is severly contaminated, making it unsuitable for agriculture use. With rapid urbanization and industrialtion, discharge of wastewater in China has surged by 58.2% to 68.5b tons from 2001 to 2012. China’s water plan bodes well for its WWT companies, especially state-owned enterprises (SOE), due to their stronger bargaining power in their negotiation of projects and the ability to secure lower financing costs. Overall, Maybank-KE views that China’s water sector is poised for a golden era in the next three years, with rising water tariffs, strong government policy support and industry consolidation fuelling rapid growth. Notable SGX listed WWT companies with operations in China would include HanKore, SIIC Environment and United Envirotech.