(Yicai Global) July 3 -- China plans to charge urban and agricultural users more for their water as part of efforts to deter wastage of the vital natural resource.

Urban dwellers will see their bills gradually rise to no less than the cost price, while charges for non-residential water users will be adjusted to allow reasonable profit for suppliers after subsidies, Zhou Banxue, deputy director of the National Development and Reform Commission's pricing division, said at a press conference.

Urban and agricultural water charges are still generally low, and prices most often fall below cost, Zhou said, adding that this does not support sensible usage habits and makes it difficult to promote water conservation.

The government will also further widen the price gap between water supplied to special industries, meaning hotels, swimming pools, public baths and car washes, and that for ordinary residents. In areas where water is scarce, charges will not fall below a ratio of three to one in principle to encourage better supply quality and promote conservation, Zhou added.

Prices of agricultural water in pilot areas will increase in one go or step by step to a level that covers costs, said Niu Yubin, deputy director of the NDRC's pricing division. At the same time, the government will introduce a progressive pricing mechanism for over-quota water use as well as a subsidy and water-saving incentive scheme.

The cities of Beijing, Shanghai, Jiangsu, and Zhejiang will take the lead in agricultural water price reforms, thereby driving change in farm water charges across the country, Niu added.

Authorities will also impose higher water price standards for high energy consumption, high pollution, and overcapacity-stricken industries to accelerate the elimination of outdated production capacity and promote the transformation and upgrade of the industrial structure. Zhou said that the government would set a favorable price policy for the use of recycled water.

Editor: William Clegg