Sector-Level Inter-Provincial Virtual Water Trade in China: Implications for Regional Water Stress

Abstract

China faces severe water resource shortages due to the uneven distribution of water resources and ever-increasing water demand driven by rapid industrialization and urbanization. The virtual water trade (VWT) is a potential solution to conserve water resources by transferring water from water-abundant/water-productive regions to water-scarce/less water-productive regions. Based on the inter-provincial input-output model, the provincial VWT of China was estimated at the sectoral level. The relationship of VWT with water resources in 30 provinces was analyzed in relation to the water stress index (WSI). It was found that (1) total inter-provincial VW trade showed a downward trend during the study period, with 363.91 km3 in 2002, 283.72 km3 in 2007, and 285.23 km3 in 2012. Overall, the primary industry dominated the VWT for most provinces. (2) China’s virtual water flowed from the relatively underdeveloped central and western regions to the east with a relatively developed economy from the inter-provincial level. This trend became increasingly prominent. (3) In many instances, VW was transferred from water-poor to water-rich areas. These results imply that China needs to improve its water use efficiency and optimize its regional industrial structure. Additionally, establishing an ecological compensation mechanism is considered a valuable measure for China to alleviate regional water resource pressure.