The ability of a region to provide clean water relates to many aspects of the physical and economic elements. We use natural and social indicators to evaluate this feature. To measure the ability of a region to provide clean water to meet the needs of its population, water demand and supply index (WDSI) is defined as the ratio of the amount of water demand and water supply. Obviously, if the index >1, the region is suffering from water scarcity. Water demand includes industrial water, agricultural water and domestic water. Water supply consists of surface water, groundwater and other clean water. To evaluate this model, we select six countries spreading in five Water stress indicator interval in the UN water scarcity map and calculate their WSDI from 1988 to 2002. Then we apply the cluster analysis to divide the countries into five classes. The test result fits water stress indicator interval showed by the UN water scarcity map perfectly. We choose Beijing for our further investigation where water is heavily overloaded. Considering the dynamic nature of the factors, we adopt the supply and demand balance theory and GM (1,1) to predict the development trend of water supply and demand separately. According to the forecast, water shortage in Beijing will be more serious in the next 15 years. Industrial water will increase gradually. Sewage reuse, rainwater harvesting project and water desalination projects will make great progress, which will provide a large proportion of the water supply in the future.