Rapid urbanization and industrial growth have led to water quantity and quality problems. Most current water allocation models focus solely on physical water and neglect the optimization of the water quantity and quality considering the water footprint. Therefore, this study aimed to establish an optimal water resource allocation model for industrial sectors based on the water footprint to identify the most effective strategies for determining the water quantity and quality distribution in river basins. First, we constructed an improved water footprint accounting system using input‒output tables to quantify the total water footprint, grey water footprint, and virtual water trade. Second, we constructed a multiobjective optimal water resource allocation model by considering the water footprint as a decision variable and combining regional economic development and productivity differences. Finally, we compared the water allocation results obtained for the Yellow River Basin, a typical “water-quantity water-scarce region” in China, with those of the Yangtze River Basin, a “water-quality water-scarce region.” The results indicate that the total water footprints of the Yellow and Yangtze River Basins were 211.37 and 317.83 billion m³, respectively, prior to optimization. After optimization, the footprints were 199.54 and 306.03 billion m³, respectively. Water resources have been reallocated through virtual water trade strategies to effectively alleviate both water quantity and quality problems. Virtual water trade strategies have emerged as policy tools capable of mitigating mismatches between industrial systems and regional water resource allocation and providing a solution to physical–virtual water system challenges within river basins.
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