Abstract

The availability of and demand for water in China is an extreme case of uneven distribution in time and space. In response, the South to North Water Diversion project, the largest inter-basin water transfer scheme in the world, channels large amounts of fresh water from the Yangtze River in southern China to the more arid and industrialised north. In order to keep the SNWD project running smoothly, a comprehensive governance system has been implemented and innovative institutional arrangements have been created to facilitate the transfer of water itself. By taking the SNWD project’s Middle Route as one case study and drawing on primary and secondary data, this article examines the project’s emerging institutional arrangements. The article outlines the establishment of new institutions for the SNWD project with high administrative rankings at both central and local levels, the encouragement of inter-department cooperation, the adoption of a market mechanism and the integration of market functions into administrative functions. We argue that these institutional arrangements have to some extent overcome common challenges in water governance in China, including an engineering-heavy approach and what Chinese commentators have traditionally called the problem of water being managed by multiple government ministries and municipal authorities as the common metaphor of ‘nine dragons managing the water’. Our findings have significant implications for understanding the continuing evolution of water governance in China.