Relationship Between Industrial Water Consumption and Economic Growth in China Based on Environmental Kuznets Curve

Abstract

China faces a critical situation because its water resources account for merely a quarter of the global average. Balancing the relationship between economic development and industrial water consumption is an important issue for China. In this study, a reduction model is established. The model adopts the per capita industrial water consumption and GDP of the eight economic zones from 2002–2014. Unit root and co-integration tests are employed to analyze the stationarity of data, and the triple reduction model is used for the fitting of variables. Results show that the eastern coastal and middle Yangtze River regions pass the turning point of their Environmental Kuznets Curve (EKC) during the period of statistics. By contrast, the northern coastal region is declining, which may be attributed to the short period of statistics. At the turning point of the EKC for per capita industrial water consumption in China, the per capita GDP ranges from 18,000–30,000 Yuan (at constant prices of 2000) and that of industrial water consumption is approximately 100–240 m3. The increasing industrial water consumption in China is consistent with the characteristics of the EKC; the relationship between per capita industrial water consumption and GDP exhibits an inverted U-shape. The varying economic development of each region cause different turning points for their per capita industrial water consumption that are attributable to factors such as technical innovation and industrial structure upgrading. This research on the EKC for industrial water consumption is crucial for studies on collaborative economic development and industrial water consumption. To reach the turning point of the EKC at the soonest possible time, industrial water consumption should be addressed by adjusting industrial structure, raising water use efficiency, and developing cutting-edge technology.