Financing Urban Water Infrastructure in a Changing World: Insights from China's Modernization Trajectories

Financing urban water infrastructure is a critical challenge worldwide, as both advanced and developing economies struggle with the fiscal pressures of infrastructure construction, operation, maintenance, and renewal. China presents a distinctive case: despite being far from fully modernized like OECD countries, Chinese cities have achieved near-universal access to freshwater supply and sewerage treatment services. However, the financing mechanisms behind this achievement remain underexplored. Drawing on the historical trajectory of Chinese modernization since the late 1970s, this paper examines how China has continuously reconfigured financing mechanisms for urban water infrastructure across four developmental stages: 1) socialist municipalization in the early reform era; 2) commodification and marketization with foreign and private investments; 3) re-municipalization supported by land-centered public finance; and 4) diversified municipal financial innovations after the mid-2010s. China's experience demonstrates an adaptive process through which urban water infrastructure financing is embedded within changing state-market relations, malleable ideologies, and shifting state power. A comprehensive understanding of China's modernization trajectory and financing strategies reveal that developing countries may diversify financing portfolios, capture urbanization-generated value, and navigate the tensions between initial capital accumulation and long-term public service obligations. It supports broader theoretical reflections on alternative configurations of state power, market mechanisms, and institutional arrangements, which may create locally grounded pathways for financing efficient, equitable, and resilient urban water infrastructure in a changing world.