The development of China's water treatment industry is closely related to water shortage, environmental pollution and policy drivers. As one of the countries with the most scarce water resources per capita in the world, China's total water resources are insufficient and unevenly distributed. Coupled with the rapid advancement of industrialization and urbanization, the problem of water pollution is becoming increasingly serious.

In this context, the government has strengthened environmental protection through policies such as the “14th Five-Year Plan for Urban Sewage Treatment and Resource Utilization Development”, which clearly requires that by 2025, the new sewage treatment capacity will be 20 million cubic meters per day, and the utilization rate of recycled water will exceed 25%. At the same time, sewage treatment technology has been upgraded from traditional physical and chemical treatment to biotechnology, membrane separation and intelligent management, promoting the industry to enter a stage of high-quality development. Water treatment has not only become the core field of the environmental protection industry, but has also been included in the layout of the country's strategic emerging industries.

Development Status of Water Treatment Industry

1. Market size and structure

China's water treatment industry has formed a complete industrial chain covering municipal, industrial, agricultural and other fields, with a market size exceeding one trillion yuan. The manufacturing of sewage treatment equipment occupies the core position of the industrial chain, and the market size will exceed 200 billion yuan in 2020, of which biological treatment technology accounts for 45%, and the application of membrane technology is rapidly expanding. The number of companies in the industry has surged, but small and medium-sized enterprises account for more than 80%, the market concentration is low, and the trend of mergers and acquisitions is significant.

2. Policy and technology-driven

At the policy level, regulations such as the "Law on the Prevention and Control of Water Pollution" and the "Implementation Plan for the Tough Fight against Urban Black and Smelly Water Bodies" have continued to increase, forcing enterprises to upgrade their technologies. On the technical side, MBR (membrane bioreactor), reverse osmosis, and intelligent monitoring systems are widely used, increasing processing efficiency by more than 30% and reducing energy consumption by 20%.

3. Regional and field differences

Municipal sewage treatment is still the main market, with investment accounting for more than 60% in 2023, but the rural and industrial sectors are growing rapidly. The rural sewage treatment rate is less than 30%, and it has become a new growth point with the support of policies. The industrial field focuses on difficult wastewater treatment (such as chemical industry and pharmaceutical industry), and there is a strong demand for customized solutions.

In terms of regional distribution, the eastern coastal areas dominate due to their developed economies and strict environmental protection standards, while the central and western regions benefit from the accelerated catch-up of ecological compensation policies.

Water Treatment Market Prospects

1. Demand drivers

Rigid demand for urbanization and environmental protection: The urbanization rate is expected to reach 70% in 2030, and the new population will drive an average annual growth of 8% in sewage treatment demand. Under the ”dual-carbon" goal, the demand for industrial water-saving and zero-emission technologies (such as electrodialysis and evaporative crystallization) has surged.

Unlocking the potential of the rural market: The policy is clear that the rural sewage treatment rate will reach 40% in 2025, and the market size of decentralized treatment equipment is expected to exceed 50 billion yuan.

Circular economy of water resources: The target of the reuse rate of recycled water has been increased to 35%, and the market space for membrane technology and advanced oxidation technology is broad. It is expected that the value of recycled aquatic products will exceed 300 billion yuan in 2030.

2. Direction of technological innovation

Intelligence and digitization: AI algorithms optimize treatment processes, the Internet of Things monitors water quality in real time, and digital twin technology reduces operation and maintenance costs. It is expected that the smart water market will reach 150 billion yuan in 2025.

Breakthroughs in low-carbon technologies: the popularization of low-carbon processes such as anaerobic ammonia oxidation and photovoltaic-driven sewage treatment have helped the industry reduce carbon by more than 30%.

Material and process innovation: cutting-edge technologies such as nanomaterial adsorption and bioelectrochemistry systems have entered commercial use to improve the treatment efficiency of difficult-to-degrade pollutants.

3. Investment and competition trends

Industrial chain collaboration: In-depth cooperation between equipment manufacturers and water operators. For example, a membrane technology company and a local government jointly built a “plant-network integration” project to reduce comprehensive costs by 20%.

Internationalization layout: Emerging markets such as Southeast Asia and Africa have become hotspots for going overseas, and the proportion of Chinese companies undertaking projects along the “Belt and Road” has increased to 25%.

Risks and challenges: fluctuations in policy standards, fluctuations in raw material prices (such as 30% price increase of PVDF membrane materials) and technological substitution risks need to be dealt with in advance.

China's water treatment industry is in a critical period of scale expansion and quality upgrading in parallel. Driven by strong policies, the municipal and industrial sectors have continued to grow, and the rural and recycled water markets have become a new blue ocean. Technological innovation extends from membrane technology and biological treatment to intelligence and low carbonization, promoting industry efficiency improvement and cost optimization.

In the future, the industry will accelerate its integration, and the leading companies will dominate the market through technology output and model innovation, and the ecological system of “smart water + resource recycling” will become the core competitiveness. With the deepening of environmental awareness and the strengthening of global cooperation, China's water treatment industry is expected to change from a “runner” to a “leader”, providing Chinese solutions for the sustainable management of global water resources.