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Nansihu is the largest lake of Shandong Province in China. It has a strategic significance because of its locating on the East Route Project of South to North Water Diversion. In 2004, the supplying water was about 3.10 × 108m3 and the water demand was about 2.56 × 104m3. Although the supplying water can satisfy requirement, the situation was not optimistic. At the same time, the total water resources and the available water resources in Nansihu were about 27.56 × 108m3 and 11.14 × 108m3 respectively. The supplying water was less than a half of the available water resources. The tendency will continue in 2010, 2020, 2030. There are two reasons. Firstly, the average depth of Nansihu is less than 2m. It is so shallow that its regulating capacity is limited. Much water just pours into the lake and then drains at once. Secondly, the lake and related rivers are badly polluted, and most of them cannot meet the standards of industry, agriculture and daily life. To solve the conflict between supply and demand must prevent and cure water pollution while enhance the regulating capacity by building more reservoirs.