Shanghai is located on the world's third largest river (by volume). Yet it faces the risk of shortages of drinking water. Many decisions and environmental characteristics have contributed to this threat. First, Shanghai has become dependent on water brought into the municipality by rivers. Second, it has become increasingly reliant on water from the Changjiang (Yangzi River), principally in order to control the levels of pollution in the water that enters its treatment plants. Third, for reasons associated with inter-provincial administrative arrangements, the city's water intakes are located within the municipality, within the estuary zone and subject to tidal intrusions of salt water. Fourth, at high tide and when the Changjiang's discharge is low, salt intrudes far into the estuary, beyond the current water intakes. If sea levels rise, these intrusions will become more pronounced. Fifth, large-scale central government infrastructure projects (such as dams and the South-North Transfer) are altering the hydrological characteristics of the river. Such projects raise the probability of salt water intrusions into the water intake zone. The Shanghai and central governments have thus made a series of decisions that, taken together, have led the municipality to rely on a source of drinking water that is increasingly unreliable and subject to the risk of shortages due to salt water intrusions. Why these decisions have been made – independently – is an important problem for those who would understand the provision of water for cities and the practical efficacy of Chinese governance systems.