Chinese cities manage flooding with traditional drainage systems that lead water into rivers or the sea. Due to relatively low requirements for the amount of water those systems have to handle, increasing urbanisation and construction activity, and increased rainfall, flooding risk in Chinese cities has increased significantly. From 2008 to 2010, 137 cities were flooded more than three times a year, and 57 cities were flooded for more than 12 hours. At the same time, rainwater that gets discharged into rivers or the sea leaves the city and does not replenish the groundwater supply, leading to scarcity of water in the city—a problem that affects 30 out of 32 Chinese megacities.

The sponge cities program chose 16 pilot cities, later expanded to 30 cities, to design in a way that absorbs 70% of rainfall. This happens through low-intervention and low-cost infrastructure like permeating pavements that allow water to penetrate the ground and replenish groundwater supply, or rooftop gardens which absorb rainfall. At the same time, areas like Lingang in Shanghai used more extensive measures like creating artificial wetlands, which retain and purify stormwater naturally. Drainage systems are led into underwater storage tanks and tunnels rather than the rivers in order to retain stormwater and combat water shortages.

The newly created infrastructure is considered to improve flood protection from cities being able to withstand a one-in-ten year storm at most to being able to handle a one-in-30-year storm. This means that the risk of catastrophic flooding should be lowered by 66%. Most measures of the program are likely to remove at least half the suspended solids in the rainwater, and increase the run-off volume of rainwater. Finally, there are added benefits to the quality of life due to new greener areas acting as a natural climate moderator, improving air quality and providing a public recreation space. Involved cities also try to use those areas to encourage tourism.