Great demand for water resources implies a large water market. China has more than 600 cities and 20,000 towns. Drinking-water demand will continue to increase at the degrees of 3% annually before 2010. The gap between water demanding and supplying should be filled up by establishing 800 to 900 new water treatment factories. The water market, due to its tremendous potential, has attracted more and more eyeballs from many big international corporations. Many international water companies have set up bases in China, for example, Veolia, Siemens and Thames have become the outsourcing enterprises for government.

In 2002, Shanghai Pudong Tap Water Company attempted to sale parts of its stock through international business inviting. The French General Water System, Thames Water System and Sino-French Water System all offered more than 1.5 billion RMB. At last, the subsidiary company of Veolia Water, which is on the Fortune Top 500 List, spent 2.45 billion dollars on a 50% stake in Pudong Tap Water Company. Siemens has also announced its strategic advance in China¡¯s water market in Shanghai, its newly-established technology department will provide a series of technology and service in China¡¯s industry, water supply and waste water disposal. It¡¯s a great evidence to show the potential of the economic profit in China¡¯s water market.

As to Chengdu districts, medium and small-sized towns have been listed in urban programming because of the principle of integrative construction in urban and suburban areas advocated by local government. However, the water supply pipe web and fund of Chengdu¡¯s Tap Water Factory is in the original five districts, and without complete water supply facility. The situation is more and more severe. Moreover, the development of the tap water factory in small cities has been blocked because of the inappropriate system. Thus, there is a necessity for reformation. All of that have provided Zhongxing with a good opportunity for its own consummation and improvement.