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Paper short abstract:

This paper moves beyond the dichotomy of water commodity and water commons, and examines the coevolving process and local dynamics of hybrid water governance with an integration of state interventions and market-based mechanisms under China’s centralized political and institutional context.

Paper long abstract:

Amidst a global trend toward neoliberal water governance since 1980s, water markets and water rights trading have been widely introduced to reallocate water for higher-value uses within and across sectors as a response to water-related development challenges. Critical scholars have contested this market environmentalism paradigm, articulating the complexity and contention of variegated neoliberalization processes on the ground. However, most studies are limited to the debate on water commodity and water commons, often framed in a traditional and binary view of state versus market. Little is known about the processes and mechanisms of hybrid water governance with an integration of state interventions and market-based mechanisms. Drawing on a case study of agricultural-to-industrial water rights trading in T county, northern China, this paper moves beyond the dichotomy and examines the coevolving process of “state-directed water marketization” within China’s centralized political and institutional context. Through a nuanced analysis of local political, socioeconomic, and environmental dynamics, this paper makes two arguments. First, the hybrid water rights trading is not the result of deliberate institutional design but is shaped by and contingent upon specific political-economic conjunctures, in which the water market is adopted by the county government as an ad hoc, practical solution to accommodate water abstraction permits for the industrial sector within the cap of total water use quotas. Second, it reflects a state-centric utilitarian strategy to address and balance competing water demands for both economic growth, agricultural and rural development, navigating the blurred boundaries of water as an economic, public, and common good.