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While enjoying rapid economic development, China has been facing increasingly severe water scarcity. One objective of many local governments is to become a `water-saving city'. In order to achieve this objective, local governments in China require an efficient method to structurally analyze their water quantity and water quality problems. Based on the classical American policy analysis approach, we present an approach to building water-saving cities that is especially designed for Chinese local government water policy decisionmaking. We use a case study for the city of Harbin to demonstrate this approach.