Abstract: Water right is the simple form of the system of water property rights, which is the foundation to establish the market system of water rights. At present, China is faced with water shortages and water pollution crisis, which urgently requires establishing an effective system of water rights and a market system of water rights, so as to protect and efficiently allocate water resources. To this end, legal experts and economists have made some interpretation on water right from both the perspectives of real rights and property rights. However, the existing researches on water rights are too abstract; it is difficult to clarify the boundary between profit and loss of the economic entities in their water consuming behaviors. This paper believes that on the basis of the competitiveness and exclusiveness of water quality changes and water consuming methods, to specifically divide the water resources into resource water and product water can define and grasp the concept of water rights more reasonably. In addition, it is helpful to construct the water rights system and the water rights market. Thus, it can further help to define the behavior boundary of economic entities from the micro perspective and clarify the functional boundary between Government and the market from the macro perspective, so as to provide a theoretical basis for the realization of the rational allocation and sustainable development of water resources，and the related legislation as well.

Key words: water rights; resource water; product water; water rights system