Water Utilities Market "Scarce Resources, Many Competitors" E20 Xue Tao: The era of water utilities development dominated by "fighting for territory" has ended

People’s Daily Economy News Beijing, March 26 (Reporter Li Biao) On March 26, at the “2026 (the 24th) Water Industry Strategy Forum” hosted by the E20 Environmental Platform, discussions on the evolution of the water affairs industry and future growth pathways were carried out within the sector. The “scale expansion” development model appears to be collectively being abandoned by water utilities companies.

Zhang Lizhen, Deputy Director of the National Center for Technology Management and Assessment in Environmental Protection Engineering, said that 2026 is a year of special significance. We stand at the historic intersection of the closing of the “14th Five-Year Plan” and the opening of the “15th Five-Year Plan,” and we are also in a critical period of profound reshaping of China’s water industry. The complex and ever-changing external environment, along with in-depth adjustments to internal structures, is driving the industry to shift from the past scale-expansion approach toward value-focused development centered on “empowering intelligence and industry transformation.” Low-carbon transition, improving quality and efficiency, systems-based governance, and the fusion of digital and intelligent technologies are redefining the underlying logic and development path of the water industry.

In this regard, Ma Yuntong, Senior Vice President of Beijing Enterprises Water Group Co., Ltd., said that the whole industry has already entered a deep-water zone dominated by existing inventory. In particular, the speed of releasing incremental scale has fallen off a cliff. Compared with the “13th Five-Year Plan” period, during the “14th Five-Year Plan” period, for all business segments—whether pipeline networks, wastewater, or sludge—the proportion by which the speed of incremental releases declines may exceed 50%. Therefore, the traditional heavy-asset scale-expansion model, it should be said, is already hard to sustain.

Meanwhile, at the forum site, Xue Tao, Executive Partner and Executive Dean of the E20 Environmental Platform’s Research Institute, pointed out that the era of water-industry development led by large-scale construction or “race to acquire land” has ended. In recent years, the overall municipal wastewater marketization rate has remained stable, but perceptions may differ across regions.

Xue Tao further stated that local governments in first- and second-tier cities are gradually reclaiming concession rights, while in third- and fourth-tier cities, due to fiscal pressure, concession rights are still being released; some cities are in a middle state. Although their fiscal conditions are still acceptable, they choose to extend concession rights in light of debt-reduction considerations. Therefore, the current municipal wastewater marketization rate is actually the result of multiple forces interwoven and balanced above, and the municipal wastewater marketization rate basically remains within a stable, normal range.

“Over the past few years, the number of concession projects newly released in the water market has indeed decreased, and the number of companies seeking projects in the market has accordingly also declined. Overall, the water market still shows a ‘congee for fewer monks’ situation—this is the situation reflected by our data. More troublesome is that in recent years, the local areas that are willing to release water concession projects mostly have poorer location conditions, and even if they are put out, not necessarily anyone will take them on,” Xue Tao said.

So where is the way out for the industry? In response, Xue Tao told reporters from the Daily Economic News that regarding scale expansion, most water utilities companies have been quite cautious. Now, companies in the water industry are exploring some development paths. There are some cases of transformation and development, but it is still hard to compare them with the previous conventional models.

2026 (24th) Water Industry Strategy Forum site Every reporter Li Biao Photo