Virtual scarce water flows and economic benefits of the Belt and Road Initiative

Abstract

The Belt and Road Initiative, proposed by China in 2013, aims to promote the cooperation and development around the world. Existing studies evaluated the impacts of the Initiative on water resources, but overlooked the water scarcity issue. Based on a global multi-regional input-output model and the water stress index, this study assesses the water scarcity impacts and economic benefits of the Initiative on countries along the Belt and Road route. The results indicate that considering water scarcity reveals new insights into the virtual water trade of the Belt and Road Initiative. There are great differences between the top virtual water exporters (mainly in Southern and Southeastern Asia) and the top virtual scarce water exporters (mainly in Southern and Central Asia) to China. In addition, water scarcity changes the trade balance between China and certain countries. For example, Russia, Indonesia, New Zealand, Madagascar, and Serbia are net virtual water exporters, but net virtual scarce water importers. In the net virtual scarce water trade with China, Pakistan, India, and Turkmenistan are the top net exporters, while South Korea, Singapore, and Malaysia are the top net importers. Considering both the impacts of water scarcity and economic benefits, there is a significant difference in virtual scarce water use among countries to gain equal economic benefits from China. This study can facilitate policy decisions with regard to the Belt and Road Initiative for trade structure optimization and water scarcity mitigation when maximizing economic benefits from the global perspective.