Huang He, deputy director of the Development Research Center of the Ministry of Water Resources, recently revealed to the China Securities Journal reporter that in order to implement the "water resource management system" proposed by the Central Water Conservancy Work Conference, the Ministry of Water Resources is studying and formulating a series of specific implementation plans, which will be announced this year.

The 2011 "Central No. 1 Document" defined "three red lines" for strengthening national water resource management: the national total water consumption control target, water use efficiency indicators, and the sewage capacity of water function zones. It proposed that by 2020, the national total annual water consumption should be controlled at 670 billion cubic meters; by 2015, the water consumption per 10,000 yuan of industrial added value should be reduced by more than 30% compared to the current situation, and the effective utilization coefficient of agricultural irrigation water should be increased from 0.5 to 0.53 or more; the water quality compliance rate of major water function zones nationwide should be increased to more than 60%.

Huang He stated that in order to implement these goals and requirements, the Ministry of Water Resources is working with relevant departments to study a series of implementation measures. In terms of water consumption control, under the overall control target of "controlling the national total annual water consumption at 670 billion cubic meters by 2020," the work of decomposing the water consumption quota by province and region has been basically completed.

　In terms of water use efficiency indicators, a differentiated water quota system will be implemented by region, industry, and product. Units and enterprises that exceed the upper limit of the water quota will be charged double fees. Some enterprises with serious water waste will also be subject to penalty water prices.

　In addition, the state will strengthen industry water standards. Previously published industry water standards involving 12 public service industries and 23 production and operation industries and related products will be upgraded to national standards and enforced. At the same time, water use standards for some emerging, high-water-consuming industries and products not covered in the standards will be added in a timely manner.

　Analysis suggests that the formulation and implementation of the water quota system will restrict the development speed of high-water-consuming industries such as batteries and coal chemical industry, and will encourage various industries to actively adopt water-saving measures, thereby driving the rapid development of industries such as urban water supply and water conservation, and agricultural irrigation. Therefore, listed companies engaged in the design and construction of water supply projects and the production of related products, such as Guozhong Water (600187) and Chongqing Water (601158), and listed companies engaged in agricultural water-saving irrigation projects and equipment business, such as Xinjiang Tianye (600075) and Dayu Water-saving (300021), will benefit first.