State-directed marketization: The local operation of hybrid water rights trading in China

Since the 1980s, water markets and water rights trading have been introduced to reallocate water within and across sectors for higher water efficiency and productivity. Critical scholars have contested this environmental neoliberalism paradigm and articulated the variety, hybridity, and unevenness of grounded neoliberalization processes and practices. While critical studies often challenge the neoliberal market rationale driven by capital accumulation and power consolidation, little is known about how the coevolving process of hybrid water marketization, which integrates both strong state interventions and selective market-based mechanisms, is produced and operated within specific political-economic conjunctures across geographical contexts. Drawing on a case study of agricultural-to-industrial water rights trading in T county, northern China, this paper makes two arguments. First, the hybrid water rights trading is not the result of deliberate neoliberal institutional design, but is adopted by the county government as an ad hoc, practical solution for industrial development under the central planning of water allocation. Second, the hybridity navigates the blurred boundaries of water as both an economic and public good, and reflects a flexible strategy to balance competing water demands for economic growth, agricultural production, and rural development. This paper contributes to a nuanced understanding of environmental neoliberalism by moving beyond the dichotomy of water commodity versus water commons, and by revealing alternative processes and dynamics of state-directed water marketization in China that blend the logic of the state and the logic of capital.