Government water officials said Tuesday the price increases will take place gradually over the next five years to encourage water-saving efforts.

"A considerable fluctuation in water prices is coming because they are too low to cover the cost of government-funded water supply projects," said Zhang Jiyao, vice-minister of water resources.

Experts say the announcement means the days of unlimited water use by industries, including the chemical, iron and steel sectors, is over.

A year ago, 1,000 tons of water taken from the Yellow River cost the same as a bottle of mineral water, a price structure that has led to unrestrained water use, particularly in farming irrigation.

Such irrigation accounts for more than 70 percent of China's total water use today, official statistics show.

To build a water-saving society and economy in China, different prices of water will be set for different users and trades based on the source of the water, its quality and amount, said Chen Lei, director of the ministry's Department of Planning and Programming.

Some major water-saving measures, including planned water use, water rationing and charges for excess consumption are to be put into effect as part of the 10th Five-Year Plan (2001-05).

China faces the world's worst scarcity of water and, as a result, a series of consequent issues including floods, droughts and pollution, Chen disclosed Tuesday in his report.

The new market-oriented pricing mechanism released by Water Resources Minister Wang Shucheng will dictate that new water prices must take into consideration the cost of water delivery, infrastructure and environmental protection.

The nation has recently suffered through a series of water disasters, starting with devastating floods in east and south China in 1998 and 1999 and continuing with the worst drought in a century last year.

The flooding of major rivers claimed some 4,000 lives of people in 1998-99 and wreaked havoc on regional economies. The drought then caused heavy crop damage, with some 300 million kilograms in grains lost.

Amid these crises, the central government spent a record 407 billion yuan (US$ 49.2 billion) on construction of more than 1,800 water-control projects during the ninth Five-Year Plan (1996-2000) period.

Even more will be spent in the 10th Five-Year Plan. During the period, water infrastructure spending is expected to account for 6 percent of China's total investment in capital construction, up from 3.8 percent in past periods, planning experts said.

(China Daily 02/21/2001)