Shijiazhuang, capital city of north China's Hebei Province adjacent Beijing, is trying to commercialize water supply to deal with water shortage.

A project called China's urban water management in the 21st century is being carried out in the city with aid from the United Nations Development Program (UNDP) and the Australian government. It has became the first city in China to seek ways to resolve its water shortage through organizational reform.

The project aims to regulate water management in urban China by reforming the administrative structure and price of water, according to Ying Ruozhi, the project coordinator.

There has been more than one department in charge of water supply in urban China. Taking Shijiazhuang as an example, nine governmental departments have been involved in water management. A medium-term and long demand and supply plan was difficult to be worked out because there was no central administrative power.

Shijiazhuang will have one single department of water management in the next 10 years", said Ying Ruozhi. "We have worked out a reform plan for government consultation."

Shijiazhuang is among 30 cities in China that suffers most from water shortage. The city's annual water consumption is 400 million cubic meters. In order to meet that demand, the city has to exploit 140 million cubic meters of water.

Shanghai and Shenzhen are also undertaking reform in this regard.