In the last four decades since beginning of Reform and Opening Up，Shanghai Municipal Government has paid great efforts to promote recycling or safe disposal facilities for different wastes，and even has paid great attention to establishing and optimizing economic incentives to encourage waste sorting. Especially since 2011，Shanghai has witnessed great success in household waste sorting thanks to economic incentives and community governance mechanisms；“Green Account” is a famous economic incentive policy and is successful to some extent in the first phase. In the future，Shanghai needs to introduce more effective economic incentive policy（i.e. differentiated waste charge），to coordinate waste sorting modes in the hands of the residents and the follow-up waste treatment facilities of different types，and to enhance institutional capacity building via community governance.