In many parts of Southeast Asia, farming, industry, commerce and urban communities compete for dwindling water supplies. Some countries have tried to deal with this problem and share water efficiently and fairly by using tradable water use quotas. Such systems have not, however, been easy to implement. This study from China has looked at the performance of the country’s first tradable water use rights (WUR) system in Zhangye City. It found that the system was encountering significant problems. One of the underlying issues is the financial insecurity of farmers. There are also problems with the system itself, which encourages a “use it or lose it” attitude to water consumption. The study concludes that water use quotas and trading in China must go hand in hand with social and administrative improvements if it is to succeed.