China extends new water tax to encourage saving: Xinhua

China has extended a pilot taxation scheme to encourage water conservation to another nine provinces and regions, including the arid capital Beijing, Ningxia and Inner Mongolia in the desertified northwest, Xinhua news agency reported late on Thursday.

The pilot scheme, already tested in Hebei province, will impose punitive tax rates on businesses that exceed their water use quotas, and will use favourable rates to encourage the use of recycled water from sewage treatment plants.

The scheme, effective in the new regions from Friday, resulted in savings of 460 million tonnes a year in Hebei after the trial was launched in 2016, Xinhua said, with dozens of local steel mills and chemical plants forced to install conservation equipment and use more recycled wastewater.

China's per capita water resources are less than a third of the global average and the government is spending billions of yuan to improve its infrastructure and clean up polluted rivers and lakes in a bid to bring more supplies into play.

Total water consumption in China's 31 provinces and regions stood at 604 billion cubic metres (bcm) last year, down from 618 bcm in 2015, according to the Ministry of Water Resources.

China has previously estimated that total consumption will hit 670 bcm by 2020, and it is aiming to cap total use at 700 bcm by the end of 2030.