The privatisation of China's public water supply system is already well under way. Multi-national companies from the UK, France and other countries are already signing contracts with local Chinese governments that will have a major effect on the water supply industry. Given the price hikes and quality problems that have sometimes accompanied this process elsewhere in the world, not to mention serious water shortages in China itself, the future of the public water supply system is facing a period of flux.

A recent labour dispute in north China provided a glimpse of how increased competition and the related industrial restructuring process will effect workers in the water industry. The Lanzhou City Tap Water Company is involved in a labour dispute with 21 former soldiers of the People's Liberation Army (PLA). Government policy in China dictates that demobilised soldiers should be given preferential treatment in job placements and that their housing, pay and benefits should match what they received in the army. However, the "iron will of the market" is rendering such regulations somewhat obsolete.

The former soldiers have filed a case with the Gansu Province Labour Disputes and Arbitration Committee (LDAC), claiming that although they had each paid a Rmb 10,000 training fee to the company up to three years ago, they are still without jobs, homes and related benefits. An official from the Lanzhou Civil Affairs Bureau agreed with the soldiers' claim, accusing the company of "ignoring the serious responsibility that has been placed on them by the government to protect the rights of our veterans."

However, Wei Lizhi, the tap water company's personnel chief pointed to the new realities in China. She claimed the company had already placed a number of demobilised soldiers and that their salaries were "based on how long they were in the army" minus fees for unemployment, housing and their pensions. Moreover, the company had been

"accepting demobilised soldiers for 40 years and we are very aware of the regulations. But we can't place people right away, and usually people have to wait for people to retire to fill a new vacancy…[I]f there's only a place for one person to work and one is enough, we can't help the demobilised soldiers by putting two in their place. That's bad business."

(HK: SCMP 08/09/2001)