Changxinng Island, is an estuary sand island of the Yangtze River, is located in the suburb of Shanghai. It will play a very important role in the economic development of Shanghai metropolis and New Pudong Area. The systematic survey and analysis of the water resource and water environment show that abundant amount and high quality of water lay a sound foundation for the development of the island. The trend of water quality and water resource from 1992 to 2000 is forecasted by a systematic dynamics model, which consists of 9 blocks of important factors such as economics, environment, population, etc. Study points out that the exploitation of Changxing Island should rely on the environmental protection principle and an overall developmental plan of Pudong and Shanghai city. Changxing Island should be exploited as a new drinking water source island of Shanghai, a convalescent and tourist center in eastern Shanghai, as well as a base to produce and process the high-quality and no-polluted farmland sideline products.