Although cities like Beijing, Lanzhou and Linfen usually grab the headlines when it comes to China's most polluted cities, Shanghai has its own issues with water and air pollution. The government are in the midst of an effort to move Shanghai's more prolific polluters to inland provinces (which is to Shanghai's benefit but not so much for those newly-industrialised areas), and the city's position next to the sea also helps to alleviate air pollution. However, there is still a visible smog 'halo' around the city, and air quality and clarity varies from day to day.
Subreddit regular and environment monitoring expert /u/sberder ran an extremely in-depth and helpful AMA on /r/shanghai, in which he answers many questions about Shanghai's AQI, PM2.5, and air pollution in general. Click here to check it out.
Air pollution in ShanghaiIn 2012 the US Embassy in Shanghai started, somewhat controversially, monitoring and reporting the local air quality around the embassy building on Huaihai Lu. The Twitter feed can be found here (note that a VPN is required to view Twitter in China). This came after the official Chinese air pollution index figures in Beijing were considered less accurate because the scale they use measures different pollutants - thus "slightly polluted" levels on the Chinese scale could be rendered "dangerous" on the scale used by the US Embassy, leading to many people believing that the government were understating the severity of the pollution.
This in turn led to the Chinese government saying that only China has the right to monitor China's air pollution, and complaining that the US Embassy's figures were inaccurate due to the fact that they were measuring only one point of data.China vs US bickering aside, the air pollution in Shanghai has worsened considerably in the past few years, forcing the Chinese government to set up a website that keeps track of Shanghai's AQI (Air Quality Index), complete with a cutesy cartoon mascot who becomes increasingly upset the worse the air quality becomes. If you are one to worry about air pollution levels - particularly those with asthma, young children, or those who spend a lot of time outside - this is definitely a site worth bookmarking.
Drinking water in Shanghai
The source of Shanghai's tap water is the Huangpu river, the same place where most of the city's sewage is dumped. While Shanghai's tap water is heavily chlorinated and has improved in quality greatly over the last 5 or so years, the water is generally still considered not safe to drink. Even boiling tap water before using it will not remove the heavy metal content present in the water.
Most apartments will have a water dispenser/cooler in them - if you don't have one, it's definitely a worthwhile (and cheap) purchase. You can get big bottles of water delivered to your place for around 18 RMB, or buy bottles at your local shop. You can also refill the large jugs, as you will find water dispenser machines outside many apartment complexes: place the jug in the bottom part and insert money, and it will refill with drinking water.
The water is generally considered OK for cooking, brushing your teeth and showering, but it's recommended that you always have a source of bottled water handy. Nongfu Springs water is available in almost every convenience store in the city, and is perfectly fine.