Memorandum of Understanding with the Chinese Ministry of Water Resources

The updated Memorandum of Understanding (MOU) between the Chinese Ministry of Water Resources (MWR) and the then Australian Department of Sustainability, Environment, Water, Population and Communities on water cooperation was signed by Minister Chen Lei and Minister Tony Burke on 24 September 2012 in Zhengzhou, China. It builds on the previous MOU, which was signed by the then Chinese Ambassador to Australia and the then Minister for Agriculture, Fisheries and Forestry on 24 October 2003.

The MOU provides a vehicle for regular exchange of information and cooperation between the two agencies on matters of common interest regarding water resource management.

The MOU will be implemented through a jointly agreed work program, including sharing information on:

  • National water policy
  • Whole of basin planning
  • River health and environmental flows
  • Innovation in irrigation technologies
  • Preparing and managing for droughts and floods

Water Entitlements and Trading Project

An important outcome of the MOU has been the Water Entitlements and Trading (WET) project. The WET project is a joint initiative of the Deparment of the Environment (the Department) and MWR, with funding provided by the Australian Agency for International Development ('AusAID'). The then Queensland Department of Natural Resources and Water also provided significant assistance to the project.

The project is designed to use Australian experience to assist MWR develop a regime of water entitlements and trading suitable for adoption across China. The implementation of a water rights allocation and transfer system has been set as a high-level policy goal by the Chinese Government under its 11th Five-Year Plan.

Phase 1 of the project was completed in 2006. This work developed its water management and trading framework for China, based on a comprehensive review of existing arrangements. The framework is designed to provide an integrated system for clearly defining rights to water, and for the allocation and trading of water in an ecologically sustainable manner.

  • Details of WET Phase 1 including the final report (in English and Chinese)

Phase 2 of the project was completed in early 2008. It involved detailed work on the policy and technical requirements for implementation of a WET framework, including aspects of water resources allocation planning, environmental flows management and the management of water resources within irrigation districts. This was supported by work in two pilot sites, one on the Yellow River and another on the Jiao River. The project has also involved a number of capacity building activities to strengthen the human resources available to implement WET in China.

  • Details of WET Phase 2 including the final report (in English and Chinese)

The Department is currently working with MWR and AusAID on the third and final Phase of the WET project, which will involve further refining, documenting and disseminating the work undertaken already, as well as additional capacity building activities.