Water is an important natural resource in the socio-economic development of a region. Management and sustainable exploitation of water resources is crucial to a region's economic planning and development. This study focuses on applying system dynamics methodology to evaluate different development scenarios for Shandong province. System characteristics of local water resources and demand in Shandong are captured and modeled using system dynamics within VENSIM software. The dynamic model of Shandong's water system consists of 5 subsystems: agricultural development, population growth, industry and tertiary industry, water resources, and water pollution. Impacts of these subsystems on the water system are assessed through three growth scenarios: modest industrial growth, aggressive industrial growth, growth combined with wastewater recycles. Based on simulation results, the scenario that most likely can sustain economic growth without overstressing the water supply is one with modest growth combined with wastewater recycle, which is recommended to the policy-maker.
