[Chinese Mainland] The Second Review Draft of the Water Law (Revised Draft) Is Submitted for Deliberation: Accelerating the Construction of the National Water Network and Incorporating Non-Conventional Water Sources Such as Reclaimed Water into the Unifie

2026 年 8 月 25 日, The second review draft of the "Water Law of the People's Republic of China (Revised Draft)" was submitted to the 24th session of the Standing Committee of the 14th National People's Congress for deliberation, explicitly stating "accelerate the construction of the national water network", improving the rigid constraint system for water resources, establishing a list of water resource overloaded areas, and suspending new water withdrawal permits in overloaded areas; fully aligning with the "Ecological Environment Code" implemented on 8 月 15 日, provisions such as the water price formation mechanism and unified allocation of water resources directly affect the operating models of water supply enterprises and water service providers.

I. Legislative Process: Four Key Changes from First Review to Second Review

The "Water Law of the People's Republic of China" is the fundamental law in China's water sector. On 2026 年 4 月 27 日, the "Water Law (Revised Draft)" was submitted to the 22nd session of the Standing Committee of the 14th National People's Congress for initial deliberation; four months later, on 8 月 25 日, the second review draft of the revised draft was submitted to the 24th session for deliberation. From the first review to the second review, four key changes have emerged in the revised draft, with far-reaching impacts on the water industry landscape:

• Explicitly accelerate the construction of the national water network — focusing on improving the optimal allocation system for water resources, the river basin flood control and disaster reduction system, and the water ecological protection and governance system, coordinating existing and incremental resources, strengthening interconnection, and upgrading the "national water network" from a policy statement to a legal norm.
• Align well with the "Ecological Environment Code" — improving the rigid constraint system for water resources, building a modern industrial system compatible with water resource carrying capacity; simultaneously implementing provisions of the "Ecological Environment Code" on water pollution prevention and control, unconventional water utilization, and other matters.
• Implement burden reduction at the grassroots level — explicitly stating that county-level and above local governments shall formulate river basin plans "according to actual needs", giving local governments flexibility in river basin planning.
• Improve the water price formation mechanism — stipulating that unified water resource scheduling shall implement total volume control, cross-section flow control, tiered management, and tiered responsibility, with dynamic adjustments based on changes in water conditions.

II. Rigid Constraints on Water Resources: Overloaded Area List, Groundwater Reserve, Suspension of New Water Withdrawal

The revised draft introduces three rigid constraint systems for water resources:

• List of water resource overloaded areas — conducting water resource carrying capacity assessments, establishing a list of water resource overloaded areas, suspending new water withdrawal permits in overloaded areas, curbing unreasonable new water use from the source, and forcing the transformation and upgrading of high water-consuming industries.
• Groundwater reserve system — explicitly establishing a groundwater reserve system, elevating groundwater management from a mere "resource" to a "strategic reserve", creating institutional space for unconventional water utilization, seawater desalination, and reclaimed water reuse.
• Tiered formulation of river basin plans — implementing burden reduction at the grassroots level, explicitly stating that county-level and above local governments shall formulate river basin plans "according to actual needs", strengthening provincial-level coordination and city/county-level implementation, and avoiding plans that are "uniform from top to bottom".

III. Unconventional Water Incorporated into Unified Water Resource Allocation

In conjunction with the relevant provisions of the "Ecological Environment Code" implemented on 8 月 15 日, the revised draft explicitly incorporates unconventional water such as reclaimed water, harvested rainwater, desalinated seawater, mine (pit) water, and brackish water into unified water resource allocation. Wastewater treatment and reuse, reclaimed water pipeline network construction, and supporting facilities for unconventional water utilization will be upgraded from past "policy encouragement" to statutory obligations. This means:

• Local governments — must incorporate unconventional water utilization into water resource planning, with coordinated allocation indicators and annual plans;
• Industrial parks — newly built wastewater treatment facilities must be equipped with reclaimed water facilities simultaneously, and those already built without such facilities must be retrofitted within a specified time limit;
• Water service providers — the market window for reclaimed water pipeline networks, storage facilities, and smart scheduling platforms is accelerating.

IV. Water Price Mechanism: Directly Affecting the Profit Models of Water Supply and Water Service Enterprises

The revised draft makes principled provisions on the water price formation mechanism. Unified water resource scheduling shall implement total volume control, cross-section flow control, tiered management, and tiered responsibility, with dynamic adjustments based on changes in water conditions. The water price mechanism is one of the provisions of greatest concern to the water industry:

• For water supply enterprises — tiered water pricing, classified water pricing, and the progressive surcharge system for non-residential excess quota usage will be further implemented, and water-saving benefits can be quantified as cost dividends for enterprises;
• For reclaimed water operators — the "quality premium pricing" principle combined with water rights trading platforms means reclaimed water pricing is no longer constrained by a single government-guided price;
• For industrial users — excess quota surcharges and reclaimed water substitution incentives work in both directions, making proactive connection to reclaimed water pipeline networks a rational choice for reducing water costs.

V. Impact on TIANYI TECH's Wastewater Treatment and Reclaimed Water Reuse Business

TIANYI TECH has long been deeply engaged in the overseas expansion of wastewater treatment and reclaimed water reuse equipment. After the draft amendment to the Water Law entered its second reading, the company faces new compliance and market opportunities at three levels:

• Mandatory reclaimed water supporting facilities in industrial parks — In line with the code requirements and the Water Law amendment, both newly built and existing industrial park wastewater treatment facilities must be equipped with reclaimed water supporting facilities, creating stable orders for the company's "membrane pretreatment + RO/NF + disinfection" process packages;
• Unconventional water substitution in groundwater overexploited areas — Groundwater overexploited areas such as North China and Northwest China will more intensively launch reclaimed water, seawater desalination water, and mine water substitution projects. The company's quality-differentiated water supply and zero liquid discharge solutions have direct application capabilities in industrial parks, power, and chemical sectors;
• Water pricing mechanism reform driving O&M service upgrades — Water utility operations are entering an era of refined management. The company's SCADA platform, intelligent dosing systems, energy consumption optimization algorithms, and other digital O&M products will become key technical support for the implementation of water pricing reform.

Source: Xi'an Water Authority "Besides the Water Supply Regulations, What Other Water-Related New Rules Are Worth Attention" (2026-09-04), Announcement of the Standing Committee of the National People's Congress.

About TIANYI TECH Co., Ltd.

TIANYI TECH Co., Ltd. is an international water service provider specializing in the R&D, engineering, procurement, and construction (EPC), and O&M services of wastewater treatment and reclaimed water reuse equipment. Its business covers the full chain of scenarios including advanced industrial wastewater treatment and zero liquid discharge, centralized municipal and industrial park wastewater treatment, reclaimed water utilization, seawater desalination pretreatment, and sludge resource recovery. With "TIANYI LIMITED" as its unified brand identity, the company is deeply engaged in markets along the "Belt and Road" including Southeast Asia, the Middle East, and Africa, providing clients with full-cycle solutions from feasibility studies, design, equipment manufacturing, installation and commissioning, to operational trusteeship.