A Chinese Energy and Water Balance Monitoring System (CEWBMS) has been run for more than two years in China National Satellite Meteorology Center (CNSMC), which uses geostationary satellite GMS-5/FY-2 S-VISSR image to generate a set of surface energy and water balance parameters including precipitation, global radiation, net radiation, actual evapotranspiration, potential evapotranspiration, relative evapotranspiration and climate and soil moisture index at al. in daily or decade base. The validations show good coincidence with ground measurements and demonstrated the CEWBMS products are meaningful and reliable. An investigation for the potential application of the relative evapotranspiration in drought monitory also has been done. It shows a good coincidence between the detected drought by CEWBMS relative evapotranspiration and the real drought situation and indicates the relative evapotranspiration of CEWBMS may have widely application in drought monitory.