Abstract: Taihu lake basin is one of the most developed districts in China. In the past 20 years the economy developed very fast. The annual growth rate of GDP reached 11.6%, the rate of urbanization increased by 31% and the gross output value of industry increased 13 times. However, the area for crops and irrigated land decreased constantly. Industrialization, urbanization and agriculture affected the quality of water environment profoundly. In the 90s of 20th century, the length of the river with the quality exceeding the standard raised 23%, and the quality of Taihu lake declined by two grades. In the future, the economic growth rate will stay at about 10%, and the water requirement will increase also the water environment will further deteriorate in near future.