In this paper, we focus on the serious, deep, and never improved water pollution in China. To analyze the problem which economic development and water pollution grow in a positive correlated way, we adopt an institutional economics of environment approach. More specifically, we analyze Chinese governance structure on water pollution by using governments, markets, communities as reference points. This article is organized as follows. Introduction shows a recent situation of water pollution in China, preceding studies, and a way of approaching the problem. Section 1 considers the connection between water pollution and political structure, and between water pollution and administrative structure. Section 2 examines the relation between water pollution and economy, markets, and firms. Section 3 discusses the commitment of civil society and community for water pollution. Each section also evolves around economic growth and GDP. Finally, we sort out the problem of Chinese governance structure on water pollution, and show a direction for the solution of water pollution in China.