Abstract: Underground pipelines constitute the “invisible capillaries” of modern cities,yet their role in sustaining urban agglomeration has long been underestimated.This study shows that pipeline systems reduce energy,environmental,and health externalities and thus form a critical but overlooked foundation of urban development.Using panel data on water-supply leakage rates in Chinese cities,we find that neither natural conditions nor socio-economic factors—on both the demand and supply sides—can explain the substantial spatial variation in pipeline quality,revealing a key empirical puzzle.To address this puzzle,the paper develops a political economy framework highlighting three structural constraints:the invisibility of pipeline performance,spatial bias in infrastructure provision,and the intertemporal mismatch between long-lived assets and short political cycles.These mechanisms jointly produce chronic underinvestment and uneven pipeline quality.Finally,the paper argues that climate change magnifies existing vulnerabilities,underscoring the urgency of advancing pipeline renewal and smart-pipeline technologies.Strengthening the governance of underground infrastructure is essential for building resilient cities and improving long-term urban governance capacity in China.