It is well known that water shortage seriously affects the social and economic development in China. The paper divided the water shortage development process in China into two stages. The first stage from 1949 to 1980 was characterized as the increasing water supply lagged the rapid increment of agriculture irrigation area. Water shortage in the second stage from 1980 to present was caused by large water need for the fast development of industralization and urbanization. In the 21st century, it was projected that water resource need would increase greatly. Water need in 2000, 2010, 2030 and 2050 of China would be 611.6 billion m 3, 682.6 billion m 3, 854.1 billion m 3 and 949.55 billion m 3 respectively. But water supply condition would not improve significantly and water supply quantity could increase slowly in the future. So water shortage in China would be very severe in 21st century, especially near 2030.The basic countermeasure to solve water shortage problem in China is to enlarge water supply quantity. In the next century, we should build large scale water transfer projects, as well as large reservoirs. Based on the first strategy, water saving is a very positive way to alleviate water shortage. At the same time, we should strengthen the water pollution treatment. At last, invest for water resource use should be guaranteed.