Promoting various business entities to enter competitive segments with economic benefits, such as water supply and power generation, can produce market-oriented investment and financing effects. The market-oriented reform of competitive water use segments can stimulate the vitality of private capital by deregulation of market access, achieve the market-and policy-driven investment and financing effect, and promote economic and social benefits through market-oriented pricing. However, the reform process is faced with challenges such as implicit access barriers, rent-seeking risks, and difficulties in effectively regulating the profit-seeking behavior of private capital, which may hinder market-oriented investment and financing effects. To ensure the effectiveness of the reform, positive incentive regulations should be implemented, guided by coordinated, balanced, and restrictive goals, and a balance between public interests, market efficiency, and private interests should be achieved through a combination of public law and private law. We should strengthen the positive incentives for granting economic rights to users of water resources, and strictly enforce legal responsibilities to create negative incentives for protecting water resources; given the interdependence between natural monopoly segments and competitive segments, the incentive guarantee system for market-oriented investment and financing effects must be refined to ensure the practical effectiveness of incentives.