A water diversion conflict in the Danjiangkou area, China, is systematically studied in order to obtain an understanding of its strategic impacts. To address the large population and uneven distribution of water storage in China, the South-North Water Distribution Project (SNWDP) is being constructed to transfer water from the Yangtze River Basin to the North China Plain where there is a severe water shortage. The implementation of this project may not only affect water usage in the Danjiangkou area, which is the largest headwater region in the central route of SNWDP, but also have environmental impacts, resulting in conflict between local communities and the government which initiated this project. To formally investigate this conflict, the methodology of the Graph Model for Conflict Resolution (GMCR) is utilized. The equilibrium determined from a stability analysis indicates that the strategy used by the government benefits the residents, but neglects the environmental impacts. To understand these discrepancies, changes are made in the government's preferences to obtain an equilibrium which reflects the government's desire to achieve both economic equality and environmental sustainability.
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