In the face of ever more-challenging water issues, the Chinese government is making it clear that international investment in its water systems is welcome.

But according to government and industry officials at the China Water Congress in Beijing today, there are a more bewildering array of models than ever by which those partnerships could, or should, be structured—and despite acknowledgment of order being needed, few experts believed things would change soon.

Shen Yen, Deputy Director of the Economic Reference Development Research Center of the State Council, told two hundred delegates the Chinese government believes "trillions of RMB" is needed in water treatment, supply and wastewater infrastructure.

"Between 200 billion and 300 billion RMB will be government investment, all else will need to be private capital," he acknowledged.

"On one hand, we must innovate. On the other, we must introduce innovative technology, from overseas if necessary."

Dr. Zhou Jiang, head of the Strategic Research Division of China's Ministry of Housing and Urban-Rural Development, called international investment "a way out" for "a severe challenge."

"In 2006, our urbanization rate was 43.9 per cent, and it is growing one per cent a year," he said.

Speakers detailed the pros and cons of the confusing array of private/public partnership (PPP) models currently experimented with in the water industry in China, including build-own-transfer (BOT), build-own-operate (BOO), build-transfer-operate (BTO) and design-build-operate (DBO) for greenfield projects.

Other models include transfer-operate-transfer (TOT) for existing treatment facilities, and a structure called foreign invested venture capital enterprises (FIVCE) when local Chinese ownership was still desired. The more popular arrangement, however, was offshore holding so as to facilitate IPOs on international exchanges.

Companies navigating the Chinese water bureaucracy today include not only large multinationals like General Electric (NYSE: GE) and French water leader Veolia Environnement (NYSE: VE), but a host of smaller firms, like United Water of the U.S., are interested in getting in on the ground floor.

Things needn't be as complicated as they are, maintained Zhang Liao, General Manager of Shanghai-based Jumbo Consulting, a financial and management consultancy specialized on Chinese infrastructure.

Liao called for reform, including the elimination of "very alarming" redundancies in state-owned enterprises, guidelines on appropriate levels of staffing, an independent non-governmental supervisory agency for water facilities, more standardization of PPP arrangements and an increased, more strategic use of IT.

But few were optimistic there would be significant changes soon.

"I wouldn't bank on anything changing in the next three years," said Robert Drake, division director of Macquarie Bank, headquartered in Sydney, Australia, to the agreement of attendees.

The current arrangements tend to be "expensive and complicated, with a lot of legal documentation and consulting fees," acknowledged Peter Geldart, Senior Vice President & Head of Structured Finance of Asia Pacific for Bayerische Landesbank (BayernLB).

Speakers from other countries detailed best practices from their jurisdictions. Koh Boon Sian, CFO of Ranhill Utilities in Malaysia, lauded the Malaysian government's leadership in beginning to migrate its 60 water companies to a new standardized ownership model that accommodated international investment and ownership while protecting water customers.

Water issues in China are taking on urgency.

The Yellow River has been running dry part of the year in Shandong province, where one fifth of China's wheat and one-seventh of its corn is produced. Many of the country's major rivers no longer support fish life. And there are plans to route water from the already-stressed Yangtze River to Beijing.

The China Water Congress concludes today.