Runaway water tariffs and wastefulness north of the border make Guangdong Investment - which supplies water to Hong Kong, Shenzhen and Dongguan for a 30-year period - a promising addition to my portfolio.
On Friday, I disposed of 1,700 shares of Manulife in exchange for 233,000 shares of the company.
It is ironic that while China is so close to the ocean, it has a severe water shortage. In 2003, China had the fourth-largest water resource in world, but it had 2,200 cubic metres of water per capita, a quarter of the world average. And it is even more ironic that the coastal province of Guangdong, a close neighbour of Hong Kong, has only 2,100 cubic metres of water per capita, even less than the national average.
Guangdong has nobody else to blame but itself for the problem. Its 86 million habitants consume a wasteful 491 cubic metres per person, much higher than the national average of 412. Guangdong people reportedly waste 80 per cent of the water they use. In terms of recycling of sewage water, Guangdong scores a very backward 30 per cent, compared with 60 per cent for many mainland cities.
The reason for such waste is that the Guangdong people have a deep-rooted and dangerous misconception that Guangdong, being a coastal province with hundreds of rivers linking to the Pearl River, has a plentiful water supply.
By contrast, Shenzhen has a very proud record of being thrifty about water consumption. Being one of the seven Chinese cities with the most severe water shortage, Shenzhen has only 470 cubic metres of water per capita - a fraction of the national average - but it consumes only 181 cubic metres of water per capita. To be fair, industrial use is a major reason why the rest of Guangdong consumes so much more water than Shenzhen.