With the ‘one house, one meter’ policy receiving more and more attention in China’s water sector, the country’s water meter industry has been growing steadily. Now many water meter manufacturers are also seeking more important roles in the global market, but for most of them it will be a rocky road and a number of industry improvements must be made.
China’s current annual production of water meters is up to one-third of the world total. Approximately 20% are exported, with a trade value just over 10% of the global water meter shipment. However, this level of production will not increase the profitability of Chinese water meter companies, because most of them are regarded as technologically poor and labour intensive enterprises.
In recent years, smart water meters have been introduced by many traditional meter manufacturers, and on a technology scale they are potentially able to achieve much greater returns than before. But is this the case? And is this the only way to optimise benefits in this market? To answer these questions, it is necessary to understand the whole market.
First of all, China’s water meter market is deeply affected by current government policies, regulations and directives. Thanks to the fast development of China’s economy, the demand for water has grown considerably in the last ten years, but demand cannot keep up with supply. China deregulated its water industry several years ago, and the free market is expected to improve water consumption efficiency and thereby save water resources.
The state has issued a series of policies and regulations to supervise the market; the most influential are the People’s Republic of China Water Law and the Measures on City Water Tariff Administration. These regulations define the legal requirements for using a water meter, and they attempt to set up a more reasonable water tariff mechanism. Against this background, the ‘one house, one meter’ programme was implemented widely, and as a result the Chinese water meter market has significantly expanded over the past five years.
While the goal of this programme has not yet been achieved, the explosive demand for efficient water metering services means that China’s water meter market prospects are bright, especially for automatic meter reading systems.
However, Chinese water utilities are facing problems in deploying water meters. Many water utilities are fearful that metering to households will reduce their profits because of losses due to leakage. In addition the increasing number of water meters means additional meter reading and management efficiency costs, as well as huge reconstruction costs. This is the main reason why the ‘one house one meter’ programme has not been completed; it underlines the monopoly position of water utilities and suggests that government supervision of water supply needs to be improved.
Experts have proposed that local governments should pay more attention to supervising the service qualities of the utility companies. But water utilities are seeking high quality water meters and advanced meter reading technologies to enhance their operational efficiencies and improve their services. This requires water utility companies to split their own water meter assembly houses and introduce competition, to enhance technology development. In addition, the intercommunication between different utilities on meter project deployments needs to be intensified. Experts also advise that water utilities still need to learn more about smart meters if they want to use them efficiently, and should develop a long term strategy for their smart meter deployment. As long as they are able to describe their specifications, the water meter manufacturers can be relied upon to supply them.
In mainland China there are more than 300 water meter companies and if the water meter-related AMR system suppliers are taken into account, the total number is 500. However, it is difficult for these suppliers to build up their product brands in the chaos of market competition. According to a survey conducted by GSL, most traditional water meter manufacturers have introduced ‘smart’ products in recent years, but almost 80% of them have little experience in electronic system design and development. Hence AMR system and related electronic component suppliers have emerged in the water meter sector.
However, most electronic suppliers are concentrating on meter data transmission only and there has been no significant improvement in the accuracy and the sensitivity of the basic water meters. Advisors from a major global water meter company suggested that Chinese manufacturers should try to strengthen their basic water meter research or introduce new flow measurement technologies, and that the combination of high quality basic meters and mature data transmission systems is the only route for future smart water meter applications.
If this is done the smart water meter deployment will grow very fast, as long as the traditional meter manufacturers co-operate with electronic system suppliers to promote the market. Local manufacturers are also encouraged to participate in the international market, to learn about the more advanced technologies and to gain business management experience. MI By Li Wendong An overview of China’s water meter market