China has about 7% of the world’s water resources, but about 20% of its population. Water shortages, water quality degradation, and flooding problems have resulted in serious ecological consequences in China, and those problems are increasingly recognized as one of the barriers for sustaining China’s future socioeconomic growth.  For example, surface water in north China plain around Beijing area has been almost exhausted.  The annual renewable per capita water supply in northern China has fallen 50% below the UN-defined danger threshold for minimum social and economic stability.  Frequency of large floods in southern China has increased. The causes behind this crisis are many, but perhaps the most important ones are overpopulation, groundwater overuse, low water use efficiency, pollution from soil erosion and industry development, poor watershed management practices, and global climate change. To combat the water crises, a few world-largest water projects have been implemented, including the much-debated Three Gorges Dam Project, the South-North Water Transfer Projects, and unprecedented soil and water conservation-orientated forest protection programs. The consequences of the impacts of those mega-projects on the environmental and ecosystems are largely unknown.  The objective of this paper is to review water resource management issues in China and explore how current water management practices affect ecosystem services at multiple scales. I review existing world-wide studies that address China's water resource issues with particular attention to the interactions between water shortages and ecosystem degradation and lessons learned from water management in China.

Results/Conclusions

This paper concludes that solving the emerging water crisis must follow the ecological principles in the long run and adopt an integrated approach that balances the needs of human and in-stream ecosystems. Although the emerging water crisis has alerted policy makers due to immediate human needs, the ecological impacts have not well studied.  Sound water management strategies should include protection of source water areas and balance upstream and drowstream relations, and a Payment for Ecosystem Services (PES) scheme can offer a more sustainable market-oriented approach for dealing with water resource challenges in China.