I. Why Hainan's Water Deserves Its Own Study

When we talk about Chinese manufacturing, Hainan comes to almost no one's mind first. The island has no heavy-chemical cluster and no equipment-manufacturing belt; its water production and supply industry looks more like an inconspicuous municipal utility, rarely studied as an "industry." Yet shift the lens to the water security of the free-trade port and the freshwater predicament of remote South China Sea reefs, and Hainan's water industry reveals a research value seldom seen elsewhere.

Hainan is a place of abundant rainfall yet seasonal water shortage, with many islands but scarce fresh water. Its water proposition is not simply "is there enough water," but splits into several non-overlapping problems of widely differing difficulty: the free-trade-port core cities must raise water supply from "drinkable" to "high-quality," remote southern islands must sustain daily life on freshwater-less reefs through seawater desalination, and the island's urban and rural areas are still closing the sewage-treatment gap. That a province of modest area must simultaneously solve a high-quality-supply problem, an island-desalination problem, and a sewage-gap problem is worth unpacking in itself.

This report does not aim to vaguely say "Hainan must save water," but to explain each block of this chain in turn: who runs the free-trade-port water services, what technology underpins island desalination, how far sewage treatment has been built, and what kind of customer opportunity this utility-rooted chain leaves for upstream equipment and material suppliers.

II. Free-Trade-Port Core Cities: From "Drinkable Water" to "High-Quality Water"

The most substantial and earliest-upgrading block of Hainan water is the urban water supply and drainage centered on Haikou and Sanya.

Haikou Water Group is the mainstay here. Its predecessor was the Haikou Tap Water Company founded in 1958; today it is a wholly state-owned enterprise overseen by Haikou's state-asset regulator, with a water-supply capacity of about 630,000 tons/day and a sewage-treatment capacity of about 587,500 tons/day, serving roughly 1 million people in the main urban area. On the Sanya side, tap-water supply and secondary water facilities are mainly handled by the water company under the Sanya Environmental Investment Group. These two cities form the most concentrated demand base for Hainan's urban water services.

More notable is the leap in water standards. In Haikou's Jiangdong New District, a high-quality water plant built on a "dual ultrafiltration membrane + ozone + activated carbon" deep-treatment process reached a single-day throughput of 200,000 tons at the end of September 2025 — billed as Asia's largest fully underground high-quality water plant, capable of meeting the demand of about 400,000 people in the near term and about 1.2 million in the long term. Upgrading from compliant tap water to high-quality water near direct-drinking standards means the whole process chain deepens — adding stages of membrane separation, ozone oxidation, and activated-carbon adsorption. This step is a direct result of the free-trade port demanding higher standards of urban utilities.

To understand this block, one must accept that it runs a municipal business whose standards are rising: demand is stable and led by state-owned water platforms, but the process is migrating from conventional to deep treatment, and the procurement structure for membranes, equipment, and chemicals shifts accordingly.

III. Remote Reefs: Making Water on Freshwater-Less Reefs

If the free-trade port is about rising standards, then the remote southern islands are about creating something from nothing.

Hainan administers a vast expanse of South China Sea reefs, which generally have no natural fresh water and long relied on water shipped from the mainland. Seawater desalination is therefore not a nicety but a lifeline for island life. The most representative case is the seawater-desalination water-supply project on Yongxing Island in the Xisha (Paracel) group: it uses electro-membrane (reverse osmosis) desalination, with the desalination portion investing about RMB 70 million and a design scale of about 1,000 tons/day; combined with rainwater purification, the overall water-supply project totaled about RMB 220 million in investment, was completed and put into operation in December 2016, with water quality meeting national standards. Its pre-treatment uses electrolytic flocculation and ultrafiltration, treating the seawater itself as an electrolyte and reducing the dosing of chemicals.

This block's trait is "small but critical." The capacity of a single project is modest, and the province's total desalination scale is only a little over 8,000 tons/day — unremarkable nationally. But it solves the hard constraint of remote reefs that are manned yet have no usable water, and its technical and reliability thresholds are far above ordinary municipal supply. In Hainan's plans, island desalination is still exploring directions of complementarity with new energy such as wind, solar, and ocean energy, aiming to make water-making on remote islands steadier and cheaper.

This block's moat lies precisely in its harshness: the high-salt, high-temperature, high-humidity, supply-difficult remote-sea environment demands durability and reliability of membrane modules, high-pressure pumps, and energy-recovery devices far beyond inland needs. Equipment and processes that can run stably under such conditions are themselves a threshold not easily crossed.

IV. Urban and Rural Sewage: The Gap Still Being Closed

Hainan water's third face is urban-and-rural sewage treatment, still in the process of closing its gap.

In 2023, the province added 88,600 m³/day of urban sewage-treatment capacity, added and renovated about 494 kilometers of urban sewage pipe networks, achieved an urban (county-seat) domestic-sewage centralized-collection rate of about 62.3%, and a sewage-treatment-facility coverage of about 92% in designated towns. These figures show that Hainan's sewage treatment is still in the "catching-up" stage — coverage is rising fast, but collection rate and treatment depth still have considerable room to improve.

One way of closing the gap is to build sewage plants underground. Haikou's Binjiangxi Sewage Treatment Plant is billed as Hainan's largest fully underground sewage plant, with a total treatment scale of about 130,000 m³/day and a first phase of about 70,000 tons/day; the Jiangdong New District water-purification center is Hainan's first fully underground sewage plant, in operation since 2022. Burying the plant entirely underground and greening the surface is the typical choice for a region like Hainan — ecology-first and land-scarce — when closing the sewage gap: it expands capacity without occupying precious surface space.

This block's challenge is direct: treatment levels are uneven between urban and rural areas and among the island's cities, and some places still lack matching collection networks or sufficient treatment capacity. Hainan's response is to expand capacity, fill in pipe networks, and build new plants toward underground and high-standard forms — all at once.

V. Beyond the Three Blocks: A Utility-Rooted Water Chain

Put the free-trade-port water services, remote-reef desalination, and urban-rural sewage gap together, and the full picture of Hainan water becomes clear: a water industry chain that does not lead on scale but wins on the diversity of its scenarios.

Supporting these three blocks is the parallel advance of several backbone water-conservancy and supply projects. In the latest round of construction, major works such as the Maiwan water-control hub, the Hongling irrigation district, the Tianjiaotan water-control hub, and the northwestern-Hainan water-supply project have come online or are wrapping up, the island-wide drinking-water improvement program has been fully launched, and the planning targets are to add about 500 million cubic meters of annual water-supply capacity and reach a rural tap-water penetration of about 92%. These backbone projects are the shared water source and pipe-network base for urban supply, island desalination, and sewage treatment.

The value of Hainan water is often obscured by the impression that "this is merely a municipal utility." By scale, it falls far short of any single industrial category in a major manufacturing province; but by the completeness of its scenarios and the span of its standards, it holds on one island high-quality supply near direct-drinking grade, remote-reef seawater desalination, and fully underground sewage treatment, covering nearly all water scenarios from urban water services to island water-making. The wider the scenarios spread, the more dispersed the demand for upstream equipment and materials, and the easier it is for suppliers fixated on a single category to underestimate.

VI. The Upstream Supply Chain: Several Non-Overlapping Procurement Systems

Hainan water's diverse scenarios mean its upstream procurement demand also splits into several non-overlapping systems:

  • Membrane modules and membrane materials: the ultrafiltration membranes of high-quality supply and the reverse-osmosis membranes of seawater desalination are the hardest and most technically demanding category in Hainan water. Whether the dual-membrane plant in Jiangdong or remote-island reverse-osmosis desalination, both place continuous demands on membrane performance, lifespan, and fouling resistance
  • Pumps and energy-recovery devices: the high-pressure pumps and energy-recovery devices of desalination, and the conveyance and distribution pumps of water services, are core equipment shared by remote-island desalination and urban water supply. The high-salt, high-humidity remote-sea environment demands corrosion resistance and reliability far above inland needs
  • Water-treatment chemicals: flocculants, disinfectants, scale inhibitors, activated carbon, and the like are stable and dispersed buyers across supply, sewage, and desalination links. The spread of deep-treatment processes also drives demand for ozone equipment and activated carbon
  • Monitoring and control instruments: online water-quality monitoring, flow and pressure instruments, and automation-control systems grow heavier in demand year by year as supply standards rise and sewage regulation tightens
  • Pipe networks and pipe materials: the island-wide drinking-water improvement and urban sewage pipe-network construction bring large basic procurement of supply and drainage pipes, valves, and chambers — an easily underestimated but high-volume, wide-ranging demand
  • Structural and electromechanical support for underground plants: the construction of fully underground sewage plants and water-purification centers spawns procurement of underground structures, ventilation and deodorization, deep-well pumps, and supporting electromechanical equipment — a demand peculiar to ecology-first regions like Hainan

These kinds of demand correspond respectively to several different project bodies: free-trade-port high-quality supply, remote-reef desalination, and the urban-rural sewage gap. An upstream salesperson who views Hainan through the lens of a single category easily misses several of these blocks.

Sales teams supplying these Hainan water projects can filter for factory directories and decision-maker contacts by the two dimensions of region and industry — Hainan × water production and supply — on Tianxia Gongchang, turning door-to-door inquiry across Haikou, Sanya, and the remote reefs, and across membranes, pumps, chemicals, and instruments, into targeted development.

VII. The Institute's View

Pulling Hainan water's blocks together, it presents an underrated industrial profile: it does not win on scale but stands on the completeness of its scenarios. The free-trade-port core cities push supply from compliant to high-quality, remote reefs make water through desalination on freshwater-less reefs, and urban-rural sewage both expands capacity and buries new plants underground. The three blocks each have their own logic and their own difficulty — one about rising standards, one about creating something from nothing, one about closing a gap — and they are not strongly correlated, which is precisely what makes Hainan water distinctive.

The variables for this structure going forward are distributed across the propositions of each block. The ceiling of free-trade-port high-quality supply depends on whether deep-treatment processes can keep spreading as the cities expand; the way out for remote-reef desalination lies in whether new-energy-complemented water-making can make remote-island water steadier and cheaper, and whether domestic membranes, high-pressure pumps, and energy-recovery devices can fill the key-equipment gaps that still exist; the key to closing the urban-rural sewage gap lies in whether collection networks can keep up with plant expansion, turning coverage truly into treatment rate.

The Institute's view is this: Hainan water's weight lies not in where it ranks nationally by scale, but in pushing forward simultaneously, on one island, three things of differing difficulty and differing logic — high-quality supply, island desalination, and closing the sewage gap: taking urban tap water toward direct-drinking standards, making stable desalinated supply on freshwater-less reefs, and burying sewage plants entirely underground. This complete, separately-thresholded structure leaves precisely a market — dispersed in demand yet far from low in technical content — for upstream suppliers of membranes, pumps, chemicals, and instruments. Recognizing that Hainan is not one large market but several small markets with differing standards and scenarios is the precondition for efficiently developing Hainan's water-factory customers.

Data Sources

  • Tianxia Gongchang (directory and industry data for Hainan water-production-and-supply factories)
  • Company Profile — official site of Haikou Water Group Co., Ltd. (predecessor was the Haikou Tap Water Company founded in 1958; water-supply capacity about 630,000 tons/day; sewage-treatment capacity about 587,500 tons/day; serving about 1 million people in the main urban area)
  • Asia's Largest Fully Underground High-Quality Water Plant Reaches 200,000 Tons in a Single Day — China News Service Hainan (Jiangdong New District high-quality plant uses dual ultrafiltration membrane + ozone + activated carbon deep treatment, 200,000 tons single-day at end of September 2025, near term about 400,000 people, long term about 1.2 million; Jiangdong water-purification center is Hainan's first fully underground sewage plant, operating since 2022, treatment scale about 15,000 tons/day)
  • Yongxing Island Electro-Membrane Thousand-Ton-Per-Day Desalination Water-Supply Project Officially Breaks Ground — China Membrane Industry Association; Case: Engineering Design of the Yongxing Island Desalination Plant in Sansha — related industry material (Yongxing Island desalination uses electro-membrane / reverse osmosis, design scale about 1,000 tons/day, desalination portion investment about RMB 70 million, overall water-supply project with rainwater purification totaling about RMB 220 million, put into operation December 2016, electrolytic flocculation and ultrafiltration pre-treatment)
  • 2023 Hainan Provincial National Economic and Social Development Statistical Bulletin — People's Government of Hainan Province (in 2023, 88,600 m3/day of new urban sewage-treatment capacity, about 494 km of new and renovated urban sewage pipe networks, urban [county-seat] domestic-sewage centralized-collection rate about 62.3%, designated-town sewage-facility coverage about 92%)
  • Hainan's Largest Fully Underground Sewage Treatment Plant Makes Major Progress — H2O-China (Haikou Binjiangxi Sewage Treatment Plant is Hainan's largest fully underground sewage plant, total treatment scale about 130,000 m3/day, first phase about 70,000 tons/day)
  • Profile of Hainan Water Conservancy Development Group Co., Ltd. — related public material (founded July 2016, registered capital about RMB 1.816 billion, total assets about RMB 4.3 billion, business spanning supply, sewage, reclaimed water, sludge, and water-environment remediation)
  • "High-Standard Construction of the Hainan Free Trade Port" Press Conference Series · Special Session on the 14th-Five-Year Reform Results of Hainan's Water Sector — People's Government of Hainan Province (Maiwan water-control hub, Hongling irrigation district, Tianjiaotan water-control hub, and northwestern-Hainan water-supply project online or wrapping up; island-wide drinking-water improvement program fully launched)
  • Hainan 14th-Five-Year Water-Resource Utilization and Protection Plan; Hainan Marine Economy Development 14th-Five-Year Plan — People's Government of Hainan Province and Hainan Department of Natural Resources and Planning (adding about 500 million cubic meters of annual water-supply capacity, rural tap-water penetration about 92%; R&D on new-energy-complemented island desalination; reverse-osmosis membranes, high-pressure pumps, and energy-recovery devices still have key-equipment gaps)