Research on deepening the reform of water conservancy investment and financing in China:evolutionary logic,practical dilemmas,and reform paths

WU Nongdi; LIU Dingxiang

doi:10.3969/j.issn.1000-1123.2026.01.007

Abstract：Investment and financing issues pose a critical bottleneck constraining water conservancy development.This paper systematically reviews the historical evolution of China's water conservancy investment and financing models,from early fiscal dominance to diversified and market-oriented explorations,revealing the inherent path dependency and current practical dilemmas.It conducts an in-depth analysis of the operational obstacles faced by various investment and financing instruments in the water sector and proposes a systematic reform path.The core lies in the following aspects:First,the selection of an investment and financing model for water conservancy projects must be based on a scientific assessment of key attributes,including their capacity to generate and structure cash flows,facilitate risk segmentation,and enable clear rights definition.This assessment forms a basis for accurately defining the government's role and functional boundaries.Second,the government's investment approach must undergo a strategic transformation from"direct funding"to"catalytic leverage",innovating in the use of fiscal funds through mechanisms such as performance-based subsidies to mobilize larger-scale private capital with limited public resources.Third,a lifecycle-based classified financing system should be established,matching differentiated financing models to various project types(such as purely public welfare,quasi-commercial,and commercial)and development stages(newly-built projects and existing assets).Finally,supporting reforms should be advanced concurrently in water pricing mechanisms,property rights systems for water assets,and green finance,thereby solidifying a solid foundation for a modern,efficient water investment and financing framework.