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Can virtual water trade save water resources?

Xi Liu1, Huibin Du2, Zengkai Zhang3

  • 1College of Management and Economics, Tianjin University, Tianjin, 300072, China; Appalachian Laboratory, University of Maryland Center for Environmental Science, Frostburg, MD 21532, United States.

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China

Keywords:
Embodied waterMultiregional input-output analysisNational water savingsValue chainVirtual water trade

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Area of Science:

  • Environmental Economics
  • Water Resource Management
  • Input-Output Analysis

Background:

  • China faces water shortages in certain regions.
  • Virtual water trade (VWT) is water embodied in traded goods.
  • Water-poor regions in China are paradoxically involved in VWT.

Purpose of the Study:

  • To analyze the practice of virtual water trade (VWT) within China.
  • To identify regions and trade types contributing to VWT.
  • To inform water resource allocation and conservation policies.

Main Methods:

  • Utilized China's multiregional input-output tables for two periods (2007-2012).
  • Traced three types of goods: local final, local intermediate, and interregionally/internationally shipped goods.
  • Quantified VWT in interregional trade.

Main Results:

  • Interregional trade in China embodied 30.4% of national water use in 2012.
  • Water use increased 2007-2012, driven by water-intensive product shipments and value chain trade.
  • Coastal areas received VWT from interior provinces, with varied reasons (final demand vs. value chains).

Conclusions:

  • Findings highlight the significant role of interregional trade in national water use.
  • Increased value chain trade is a major driver of water consumption.
  • Policy development for water allocation and conservation must consider trade types and regional water scarcity.