China's water resources are scarceand unevenly distributed. It has the sixth largest amount ofrenewable resources in the world, but a per capitaavailability that is only one-fourth the world average andamong the lowest for a major country. The country is underserious water stress, and its problems are made more severeby the fact that resources are unevenly distributed, bothspatially and temporally. Per capita water availability innorthern China is less than one-fourth that in southernChina, one eleventh of the world average, and less than thethreshold level that defines water scarcity. A monsoonalclimate also means that China is subject to frequentdroughts and floods, often simultaneously in differentregions, as precipitation varies greatly from year to yearand season to season. The complexity of water resourcemanagement in China requires a transition from a traditionalsystem with the government as the main decision makingentity toward a modern approach that relies on a sound legalframework, effective institutional arrangements, transparentdecision making and information disclosure, and activepublic participation. This will require that laws arestraightforward and not contradictory, with mechanisms andprocedures for enforcing them. It also should entail thecreation of a new multi-sectoral state agency tasked withoverseeing water management policy at the national level.