Virtual water in interprovincial trade with implications for China's water policy

With increased social wealth and economic development, provinces in China have also faced serious water shortages. In this paper, we implemented a multi-regional input-output framework to evaluate the pressures posed by human consumption of water resources, as well as the water displacement in the thirty provinces of China. The most recent available multi-regional I/O data has been applied in the study. We found that some water scarce provinces were still net virtual water exporters (such as Ningxia, Hebei and Xinjiang), while some water deficit and developed regions such as Beijing and Tianjin relied heavily on external water sources. Further detailed analysis revealed that huge disparities of water intensities, export constitutions and consumption patterns all contributed to the virtual water transfers among provinces. With economic growth and urbanization taking place all over the country, less developed provinces may be locked in water intensive economies due to consumption from developed provinces, and some arid provinces may hardly support a harmonious development between the economy and water resource protection. In addition to enhancing water efficiency and promoting a green consumption-production system, we suggest that market-based water pricing and a nationwide virtual water compensation scheme be adopted by China's government.