With regard to the development stages of foreign direct investment(FDI)in China, foreign water enterprises have experienced three stages of FDI: initial stage, expansion and retreat stage, stagnation and infiltration stage. The main problems of foreign water enterprises induced to China's water market include safety of water industry, competition with China's water enterprises and protection of public interests. Finally, the feasible schemes are put forward to solve the above problems: (1)According to the characteristics of the water industry, the chain of water industry is divided into natural and non-natural monopoly parts. For the natural monopoly parts strict regulation should be implemented, for the non-natural monopoly parts modest competition should be introduced. (2)The competitive advantage of China's water enterprises should be improved by learning the advanced management and technology through the demonstration effects and talent flows of foreign enterprises. (3)The participation of the public and enterprises should be promoted, and the supervision of foreign water enterprises should be strengthened.