China has a water balance between water supply and water consumption according to whole country. but there are serious water shortages in some areas, especially in urban areas in the northern China. In general, the cities in the northern China are short of water resource and have less treated waste water. and the cities in southern China are rich in water resource but have water pollution. The paper indicated that the reasons of China’s crisis in water resources in urban areas are undeveloped industrial techniques. large population in the cities and natural conditions. But the irrational distributions and the scales of the cities are the most important causes. For example, there are about 200 cities in the arid. semi-arid. sub-humid areas of China on the north side of Yellow river,which amounts to 47% of total number of the cities in China. But the water resource in this area is only 17. 4 percent of the country’s total water resource. So the water shortage in the North China is mainly caused by natural conditions.Under the rapid social-economic development in recent years. China has a quick urbanization now. More and more towns want to became new cities. In the past decades. the population. socioeconomy. and urban construction were considered when a town was discussed for becoming a new city. The above factors indicate only urban space scale and socio-economical abilities. But whether a new city can develop successfully is determined by its natural conditions and its location. According to the past experience. water resources and water pollution are limiting factors of the cities’ development. So the water resource of the new urban area and where it can be used are very important.In order to avoid the water problems of the new cities, it is necessary for decisionmaking departments of the Government to control the population scales and the developments of the cities by setting up a criteria of water resources supply ability.Then the authors proposed some new issues that should be studied which are presented as following1 The smalles amount (water resource index) of water resources should be taken into account for new cities’ establishment in different regions and for different types. As a whole country. how to plan the cities in China according to the difference among river basins is an urgent research work to be finished. This work is to study the bearing capacity of each river basin’s water resource without water transfer from other river basins. and the largest possible scale of the new cities. The aims of this study are to get the coordinate relationship between river basins’ water resources and its cities, to reduce the limitation of water resources to cities’ development.2 There are many kinds of cities in China according to their functions. They can be divided into industrial and mining, traffic center, tourism, harbor, trade center and multiple-functions cities.The different kinds of cities have different water consumption because of their different industrial structure and inhabitants’ customs. Now the large cities have a lower water consumption per ten thousand RMB of output value because of their advanced techniques. The cities located along large rivers have a higher domestic water consumption. So when we drawn up the water resource indexes for new cities. the characteristics of the new cities should be considered and the different criteria should be given out.3 China has a large territory and a complex natural environment. The available water resources in different regions are different. The theory and methods for water resource assessment are different for different areas. And in the past years. the water conservancy departments emphasized on water quantity assessment. but the environmental protection departments paid much attention on water quality assessment. There is no a united water resource assessment that assesses both water quantity and water quality. The time and spatial distribution and changing law of water resource were rarely considered. So a satisfied assessment of water resource is a united