This study highlights how Chinese economic development detrimentally impacted water quality in recent decades and how this has been improved by enormous investment in environmental remediation funded by the Chinese government. To our knowledge, this study is the first to describe the variability of surface water quality in inland waters in China, the affecting drivers behind the changes, and how the government-financed conservation actions have impacted water quality. Water quality was found to be poorest in the North and the Northeast China Plain where there is greater coverage of developed land (cities + cropland), a higher gross domestic product (GDP), and higher population density. There are significant positive relationships between the concentration of the annual mean chemical oxygen demand (COD) and the percentage of developed land use (cities + cropland), GDP, and population density in the individual watersheds (p < 0.001). During the past decade, following Chinese government-financed investments in environmental restoration and reforestation, the water quality of Chinese inland waters has improved markedly, which is particularly evident from the significant and exponentially decreasing GDP-normalized COD and ammonium (NH4⁺-N) concentrations. Our results demonstrate that the increasing GDP in China over the past decade did not occur at the continued expense of its inland water ecosystems. This offers hope for the future, also for other industrializing countries, that with appropriate environmental investments a high GDP can be reached and maintained, while simultaneously preserving inland aquatic ecosystems, particularly through management of sewage discharge.