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Municipal public utilities can be defined as the industry that provides necessary and universal services or goods for residents and production in urban areas. Municipal public utilities, compared with other industries, possess the following distinctive characteristics: being monopolistic by nature, having public interest, being network, regional, fundamental and external. According to the traditional theory, municipal public utilities should be monopolistically operated by one or just a few enterprises or governmental monopoly through state-owned enterprises. In reality, almost all countries had or have adopted the proposed governance model of municipal public utilities and corresponding innovation or reform.China had adopted the direct governmental monopolistic operation and management in the area of municipal public utilities since 1949. Government controlled the entire process involving investment, production, operation and management through state-owned enterprises. However, with the development of social economy and the gradual establishment of the market economic system, the defects of the governmental monopolistic operation become more and more obvious. The defects mainly include low productive efficiency, monotonous goods or services and lack of option, poor service awareness, comparatively lower prices that severely deviate from its original costs and the corresponding heavy financial subsidy, etc. In order to resolve the above problems, China has implemented municipal public utilities reform since Reform and Opening-up. After 30 years of reform and development, China has made significant achievements in the area of municipal public utilities. However, overall, reform goals of improving supply efficiency, of resolving problems of supply neck bottles and of the reconstruction of institutional mechanisms for municipal utilities have not completely fulfilled. Moreover, there still exists some obstacles and problems in the reform process and the perception of reform. Therefore, municipal public utilities reform, currently, is a hot and difficult issue in the area of public governance。 In response to the hot and difficult issue and for the aim of theory construction and knowledge acquisition, in this paper, the development and reform process of municipal public utilities and the corresponding theories, with combining research methods of empirical analysis, normative analysis, comparative analysis, and systematic analysis, are systematically and thoroughly reviewed in depth from the mixing angle of the supply of public services, public governance, economics and political science. To this end, this paper first provides a review of development course of municipal public utilities in China since 1949. Secondly, it emphatically analyzes the traditional management model of municipal public utilities and the marketization model of municipal public utilities, which chiefly includes the analysis of characteristics, theoretical foundation and practicing performance of the two models. It is argued any simple idea of state-owned model or market-based model are difficult to achieve the primary aim of providing reasonable price, good quality and sufficient quantity of municipal public utilities product or service in sustained, stable and safe way because of complex, diverse and dynamic characteristics of the area of municipal public utilities.The author then proposes the new development model of municipal public utilities--cooperation governance model of municipal public utilities by introducing the theory of governance and corporatism. Finally, the connotation, characteristics and operation mechanism of cooperation governance model of municipal public utilities are expounded. It is argued that the enhancement of municipal public utilities product and service not only requires the participation of diverse subjects of governance but also depend on the construction of operational mechanism which is composed of diverse participation mechanism, mechanism of integration of interests, orderly competition mechanism, and regulation mechanism in order to adjust mutual relations among diverse subjects and to ensure the cooperation between diverse subjects.
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