Shui Hau Wan is a unique area comprising various coastal habitats, including marshes, mangroves and intertidal sandflat, boulder shores and rocky shores.  Due to its diverse habitat features, the entire ecological landscape of Shui Hau supports a relatively rich biodiversity with more than 600 species recorded, including the 'Living Fossil' horseshoe crab.

But Shui Hau has been facing high levels of disturbance and pressure from human activities such as clam digging. Unregulated clam digging is a serious problem that can lead to juvenile horseshoe crabs being trampled and may change the composition and density of the benthic community structure and the availability of prey. Large Asiatic hard clams here have all but disappeared due to this unsustainable activity.