The Yellow River is the second largest river of China, and the river basin is the birthplace of Chinese civilization. In the basin, the Hehuang Valley, Yinchuan Plain, Hubao Plain, Ordos Basin, Guanzhong Basin, Taiyuan Basin, etc. are important grain-producing areas as well as energy and chemical industrial bases, showing great potential for economic development. However, the Yellow River basin is situated in arid and semiarid regions of China, where water resources are not sufficient, economic environment is fragile, and droughts and fl oods occur frequently, all of which greatly constrain the sustainable development of social economy of the basin. From 1970s to the end of 1990s, drying up of the Yellow River occurred almost every year. The discharge of many tributaries decreased continuously. Groundwater was over-extracted in many cities. The areas where lowering of groundwater level occurs have expanded year after year, and quality of surface and groundwater has deteriorated. All these have seriously constrained the sustainable development of social economy of the basin area. In accordance wi th the Memorandum of Understanding between China Geological Survey (CGS) and National Institute of Advanced Industrial Science and Technology (AIST), Japan, the two institutions signed an agreement to jointly work on the project of “Collaboration on Modeling and Future Prediction of Balance, Circulation and Utilization of Groundwater” in March 2003. Through research on the balance, circulation and utilization of groundwater in the Yellow River basin, the project aimed to set up a numerical model of groundwater in the basin, to predict the trend of groundwater changes in the coming 10 to 20 years, so as to provide scientific support for the rational development and utilization of groundwater in the basin. During the development of the project in China, concern and support were shown by Ms. Shou Jiahua, former Vice Minister of Land and Resources and Mr. Wang Min, Vice Minister of Land and Resources and Director General of China Geological Survey, Mr. Yin Yueping, Director of the Department of Hydrogeology and Environmental Geology, China Geological Survey, Mr. Wu Xuanmin, Deputy Director of the same department, Mr. Shi Jiansheng, Director of the Institute of Hydrogeology and Environmental Geology, Chinese Academy of Geological Sciences. Other experts concerned have offered guidance to the framework of the project often, thereby providing important guarantee for the smooth implementation of the project. The target of the project was to carry out in-depth research on the changes of frozen soil in the source area of the Yellow River based on a systematic collection of relevant data, and on the groundwater dynamic features, isotope characteristics, and the circulation and balance of groundwater in the Yellow River basin to establish numerical model of groundwater in the basin, and to make prediction of future groundwater changes in the basin.