There is but one wrinkle in the $4 billion plant: The desalted water costs twice as much to produce as it sells for. Nevertheless, the owner of the complex, a government-run conglomerate called S.D.I.C., is moving to quadruple the plant’s desalinating capacity, making it China’s largest.
“Someone has to lose money,” Guo Qigang, the plant’s general manager, said in a recent interview. “We’re a state-owned corporation, and it’s our social responsibility.”
In some places, this would be economic lunacy. In China, it is economic strategy.
As it did with solar panels and wind turbines, the government has set its mind on becoming a force in yet another budding environment-related industry: supplying the world with fresh water.
The Beijiang project, southeast of Beijing, will strengthen Chinese expertise in desalination, fine-tune the economics, help build an industrial base and, along the way, lessen a chronic water shortage in Tianjin. That money also leaks away like water — at least for now — is not a prime concern.
“The policy drivers are more important than the economic drivers,” said Olivia Jensen, an expert on Chinese water policy and a director at Infrastructure Economics, a Singapore-based consultancy. “If the central government says desalination is going to be a focus area and money should go into desalination technology, then it will.”
The government has, and it is. At the government’s order, China is rapidly becoming one of the world’s biggest growth markets for desalted water. The latest goal is to quadruple production by 2020, from the current 680,000 cubic meters, or 180 million gallons, a day to as many as three million cubic meters, about 800 million gallons, equivalent to nearly a dozen more 200,000-ton-a-day plants like the one being expanded in Beijiang.
China’s latest five-year plan for the sector is expected to order the establishment of a national desalination industry, according to Guo Yozhi, who heads the China Desalination Association. Institutes in at least six Chinese cities are researching developments in membranes, the technology at the core of the most sophisticated and cost-effective desalination techniques.
The National Development and Reform Commission, China’s top-level state planning agency, is drafting plans to give preferential treatment to domestic companies that build desalting equipment or patent desalting technologies. There is talk of tax breaks and low-interest loans to encourage domestic production.
In an interview, Mr. Guo called the government role in desalination “symbolic,” saying that direct government investment in seawater projects does not exceed 10 percent of their cost. By comparison, he said, big water ventures like the massive South-North Water Diversion Project, which will divert water from the Yangtze River in the south to the thirsty north, are completely government-financed.
Still, the government’s plans could mean an investment of as much as 200 billion renminbi, or about $31 billion, by state-owned companies, government agencies and private partners.
Beijiang’s desalination complex, built by S.D.I.C. at the behest of the Development and Reform Commission as a concept project, was almost wholly made in Israel, shipped to Tianjin and bolted together. Nationally, less than 60 percent of desalination equipment and technology is domestic.
China’s goal is to raise that to 90 percent by 2020, said Jennie Peng, an analyst and water industry specialist at the Beijing office of Frost Sullivan, a consulting company based in San Antonio.
There are plenty of reasons for China to want a homegrown desalination industry, not the least of which is homegrown fresh water. Demand for water here is expected to grow 63 percent by 2030 — gallon for gallon, more than anywhere else on earth, according to the Asia Water Project, a business information organization.
Northern China has long been short of water, and fast-expanding cities like Beijing and Tianjin already have turned to extensive recycling and conservation programs to meet the need.
Mia Li contributed research.
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