China faces a major challenge in managing its scarce water resources to sustain economic growth in the years ahead. This report provides an overview of China's water scarcity situation, assesses the policy and institutional requirements for addressing it, and recommends key areas for strengthening and reform. The issues covered in the report are water governance, water rights, water pricing and affordability, watershed ecological compensation, water pollution control, and emergency prevention. The report's recommendations identify the key measures needed to effectively address these issues.