The Beijing News
December 16, 2009

Water prices may rise in Beijing in the coming year, depending on the outcome of a public hearing held this morning.

The potential price increase of 0.9 yuan per cubic meter, or about 24%, may be implemented according to one of two plans: a one-time increase, or 0.3 yuan per year over the course of three years.

The China Daily reported on December 11 that homeowners were overwhelmingly opposed to the price increase:

Not a single household in a survey of 250 from 21 communities in Haidian district agrees with a government proposal to immediately raise the price of water by 0.90 yuan to 4.60 yuan per cu m next year.
...
Zhu Yufeng, head of the Jinkou neighborhood committee in Haidian district, brought the results of her independent survey to a non-public hearing on water prices on Tuesday.

More than 50 percent of interviewees strongly disagreed with the municipal government's proposal to raise the household water price, with the remaining people saying they prefer it could be gradually raised over 3 years.

The survey also pointed out that public acceptance of a standardized raise was low.

"It is wrong to raise the water price like this," Zhu said Thursday. "Only families who use too much water should pay extra."

According to The Beijing News, 25 representatives, including a 10-member consumer delegation, were scheduled to attend the hearing. A Xinhua article published this morning led off with a description of the representatives present, noting in particular, "A resident who was on the representative list asked for a sick leave Wednesday, but she had submitted a written document to express her opinion."

The makeup of the consumer delegation is of particular concern following a scandal involving representatives who attended a hearing in Harbin under false presenses. The China Youth Daily described the controversy:

The thirteen consumer representatives listed on a copy of the Guide to the Hearing Concerning the Harbin Domestic Water Supply Price Adjustment seen by the China Youth Daily consisted of two laid-off workers, Gu Xiaofa and Yang Xiumei; two retirees, Liu Ruwen and Liu Tianxiao; two teachers, He Shuling and Zhou Furen; two community cadres, Ma Shuying and Li Guizhi; one office worker, Wang Juhui; one business employee, Gong Lijun; one office worker, Xiu Liwen; one lawyer, Li Min; and one medical professional, Liu Guobin.

Wang Wenbin, head of the General Office of the Harbin Municipal Price Bureau, told the China Youth Daily that the consumer representatives at the hearing were chosen by two methods. When public notices were issued, respondents were accepted until the quota was reached. Other representatives were recommended by the municipal consumer association. Wang said that the slate was put forward by the consumer association and that the Price Bureau took no part in the selection process.

According to Huo Enjie, head of the Pricing Department at the Price Bureau, unemployed representative Yang Xiumei could not attend the hearing and had been replaced by Sun Jing, a cadre from the Dayoufang neighborhood in Taiping District. The China Youth Daily learned that the other unemployed representative, Gu Xiaofa, was now seventy years old and had retired from the Harbin Office of Letters and Visits in 1994, which meant that he was not an unemployed worker.

Liu Ruwen, one of the retired representatives, told the China Youth Daily that he was CEO of the Modern Hotel Management Company and a member of the Heilongjiang chapter of the China Association for Promoting Democracy. He had not reached retirement age and was not a retired worker.

The lawyer, Li Min of Daoli District's Sizheng Legal Services, told China Youth Daily, "There's a national law that stipulates that water prices shall be adjusted every three years by 8%-10%." When asked for a citation in the law, or whether the price adjustment was an administrative rule, Li only said that the law existed. No Heilongjiang-based lawyer named Li Min was found in a search of the national lawyer website.

The consumer representatives basically fell into three camps. Some supported the increase because they felt the water supply was good quality but expensive to supply. Others were in favor of a smaller increase than the one proposed at the hearing. And a third opinion advocated postponing the increase or abandoning it entirely.

Liu Tianxiao, the retired teacher, was the only representative dead set against a price hike, but he was never given the opportunity to speak. He ended up throwing a water bottle at the moderators in frustration.

Liu told the China Youth Daily that the Harbin Water Supply and Drainage Group did not provide first-rate service, and its prices were not commensurate with the quality of the water. Many Harbin neighborhoods remain without water meters, "like the communities of Pinggang, Xuanxi, and Qingming in Nangang District, and Ansheng and Anhe in Daoli District."

He explained that for several decades the water company had not given consumers itemized bills; water fees were calculated on a per-capita average, leading to a muddle in which moderate users subsidized heavy users.

The current Plan for Domestic Water Supply Price Adjustment reads, "an additional 0.1 yuan per cubic meter will be put toward a water meter improvement fund." Liu said that after the last round of price adjustments in 2001, the water company started putting 0.08 yuan per cubic meter toward a fund for metering equipment which would be used for installing, testing, and replacing water meters. Over the course of eight years, that fund would have accumulated an estimated 120 million yuan, but no water meters had been installed. What had become of that sizable sum, if the same fees needed to be collected again?

The China Youth Daily article goes on to raise a number of questions about the water company's motives for requesting a price hike. It claims to owe enormous interest payments on 4.5 billion yuan worth of loans, but as a nationally-registered public works project, the Mopanshan water supply, which went into operation in 2006, should have been funded with interest-free loans. The company once reported that the first stage of the project was completed at a cost 3.534 billion yuan, a different number from the 3.77 billion cited at the hearing.

And previous news articles reported rumors that corporate shareholders in the water company had only agreed to invest after receiving guarantees of a price hike before the end of the year.

The price hikes that usually result, despite general public opposition and specific objections identified by the news media, have made some observers fairly cynical about the significance of public hearings. Here's one take, from the blog of Teng Yun, a journalist who writes pithy op-ed pieces:

Such a second-rate China Youth Daily reporter. All that effort just to prove that the hearing on the price of water in Harbin was a sham. Look at the sincerity with which he says that the identity of certain consumers in attendance was at odds with their actual status.

Yet from a journalistic perspective I actually prefer a second report from the same hearing, about Liu [Tianxiao], the one consumer who wanted to speak but was prevented from speaking even as twelve fake consumer representatives sat silent beside him. He picked up a water bottle and dashed it on the ground.

News needs to be powerful in China. The news about Old Liu is powerful. Just like Four Winds from The Line (生死线) - sure, he may be a little unreasonable, but who's the one who's really being unreasonable, dammit?

From what I know of Harbin, a sham hearing is par for the course. The tricks officials use against the people are scaring them and cheating them. I've talked before about the subway business: how do you conduct a major action involving tens of thousands of people? It all boils down to scaring them and then cheating them.

But it is inappropriate to use this hearing as proof of the behavior of officials in Harbin, because a hearing, no matter where in China it is held, is little more than a scam. All hearings in China are demonstrations of an eternal paradox: the consumers who make up the majority will always pass a decision that harms their own interests.

And now Beijing will hold a hearing about the price of water before the end of the month. As a Beijing citizen, I naturally don't have much hope for it. I seek only to be amused from a technical standpoint, as a way to discuss this paradox. I see that 25 people will be attending the hearing, and sixteen of them will be consumers. From that ratio alone, normal logic dictates that the hearing need not be held at all: 9 vs. 16 means that the outcome can be deduced: Beijing's water price will not rise. People who pay for water will want to pay as little as possible.

Of course the actual outcome will turn that logic upside-down. Beijing's hearing on the price of water will most definitely result in a price hike. On this point, I would be willing to bet the mayor. If I win, it means that Beijing's consumers want to pay more money for their water: so enlightened, selfless, self-sacrificing, and conservationist are we. Truly an inspiration to all of China.

And as a demonstration of our enlightenment, the hearing ought to be canceled, because it damages the altruistic spirit that we pure, innocent citizens possess. We have every reason to shout: Don't insult us! Our enlightenment doesn't require a hearing!

So any which way you look at it, there is never a reason to hold a hearing in China. If you absolutely must do something, then I'd rather send up a petition. Sure, petitions are a sham, too — didn't we just hear about some western woman from Harvard who has been petitioning for seven months? Still, even if petitioning is a sham, what matters to me is that compared to a hearing, at least it's resistance instead of acquiescence.

Update (2009.12.17): The China Daily reports that 22 of the 25 delegates supported the price hikes — 21 in favor of spreading it over three years. Only three delegates rejected the increase.