CHANGES IN WATER POLICY IN THE PEOPLE'S REPUBLIC OF CHINA1

ABSTRACT: Ideology has predisposed the People's Republic of China against the use of prices to allocate water. Prolonged drought in north China has made the Chinese more aware of their unfavorable water resource inventory and the expense of expanding supply. Therefore, as part of the economic liberalization commenced since the death of Mao Zedong, China has started to make more active use of pricing to regulate demand and reduce the need for supply expansion.