Along with the rapid development of water market in China, it has been increasingly discussed for the water companies how to occupy as much market share in China water market. Following this idea, the first 2011 ChinaWater.Net-INTERAQUA Sino-Japan Water Forum has been held in Tokyo, Japan. The 1st Forum is to discuss on the topic of pursuing new water partnerships between China and Japan by means of keynote speech, discussion and business communication.
Dr. FU Tao, Director of Water Policy Research Center of Tsinghua University and Consultant Editor-in-Chief of ChinaWater.Net, has presented a speech to review the history and future for Sino-Japan cooperation on water issues, based on his long-term investigation on applied management model and technology system for water environment.
As the pioneer in water sector, Japanese water companies has endowed with great advantages on technologies and instruments. On the other hand, the sufficient capital flows and perfect talent maintain system represent additional advantages to stimulate the development of water companies. In other words, Japanese water companies has been witnessed an development in sectors like wastewater treatment, water supply and operation by centered on technology and backed on talents.
However, Dr. FU Tao pointed that, a coin has two sides, one side is advantages and the other side represents challenges. As known, water services is a comprehensive services package, therefore it is inevitable for all sectors to shrug from risks. Accordingly, the scientific way to manage water sector is that to consider water problems with a comprehensive perspective instead of separated one, or the water companies will always overestimate the market risks due to lack of integrated analysis on the industry, resulting that they hardly get enough confidence to enter China Water Market.
Otherwise, Dr. FU Tao stated, tracing the causes for this dilemma, the decentralized industrial structure will be responsible for this. We could see that each separated sector performs well in Japan, but fails to systematic works due to operation subjects free from market mechanism, leading to the difficulty to cultivate sound company competitions. Referring to engineering market, although the engineering companies each has state-of-art technologies, but on the other hand they lack effective response to diversified rules and management systems and will lead to inefficiency in decision-making. All mentioned above will handicap the Japanese companies involving into global water market.
After all, Dr. FU Tao, combining the comprehensive analysis on the situation in Japan and participants discussion, gave some suggestions: First, Establish strategic cooperation system. Through analyzing the multi-risk package likely existed in Japan water sector, Dr. FU Tao suggested that the companies from China and Japan should seek their oversea partners to reduce the risk, satisfying the need for a modern comprehensive water market, realizing mutual complementary at a industry level, as well as integrating advantages of companies of both sides to combat oncoming challenges. Second, The governments should extend efforts to assist water companies and expand cooperation margins of water industry. For recent years, Sino-Japan water cooperation projects have bring great benefits for both sides. In meanwhile, Japan governments is initiated to probe mechanisms for PPP projects, to be followed, association related to water industry development has been set up in Kitakyushu, and industrial investment agencies at central government level. However, these progresses have been still located at technology and financing scope but penetrated into commercial mechanism and policy makings. The governments, accordingly, suggested Dr. FU Tao, should establish special funds to provide financing to water companies, insert more efforts to conduct market research to give references to water companies, and further study water market in China to make a comprehensive understanding of China water market, finding the potentials and opportunities in the market and reduce risks. At last, open Japan home market to the world, providing much wider space for water companies to get increasing development.
After the tour to Japan, Dr. FU Tao pointed that “if a water company that could not provide good-quality services gets involved into a global competition, what does it mean? It means a completely strange environment to the company including both legislation and market rules, the company is hardly to reach the expected target, instead, will fail although bring with high-level represented technologies and brands.”, therefore, the Japanese companies should increasingly move on to improve themselves and operation market.
