Relationship between Industrial Water Use and Economic Growth in China: Insights from an Environmental Kuznets Curve

Abstract

Global inequity and the unbalance of water resources has been a critical issue for many years; and the Chinese per capita water resources are only 1/4 of the global average. Meanwhile, as the Chinese economy is growing rapidly, the demand of Chinese industrial water use is also increasing. In this case, it is important to balance the relationship between economic growth and industrial water use. In this study, a reduction model is established for the northeastern, northern coastal, eastern coastal, southern coastal, middle Yellow River, middle Yangtze River, southwestern, and northwestern regions to verify the environmental Kuznets curve (EKC) for their respective industrial water use and provide theoretical support for decision making from an economic perspective. It adopts the per capita industrial water use and GDP of the eight economic zones from 2002 to 2014. The unit root test and co-integration test were adopted to analyze the stationarity of the data, and the triple reduction model was used for the fitting of variables. The relationship between per capita industrial water use and GDP showed an inverted U-shaped curve from 2002 to 2014 for China, as well as for the eastern coastal and middle Yangtze River regions, with the coordinates of the turning points being (9.8749, 4.6735), (10.3098, 5.4783), and (9.8184, 5.0622), respectively. The per capita GDP at the turning point of the inverted U-shaped curve is 18,000–30,000 Yuan (at constant prices from 2000). This study provides important thoughts and lessons for collaborative research into the relationship between industrial water consumption and economic development. The central government should focus on the central and western regions when creating policies for water resource management and technological development to improve their industrial water use efficiency.