Assessing the Changes of China’s Virtual Water Exports in 2002 and 2007

Abstract

An increase in virtual water export (VWE) could exacerbate the shortage of water resources in a water-stressed country. An analysis of VWE changes through time could be important for international trading strategies in water-stressed countries. China has been experiencing increased water shortages concurrent with astonishing economic growth. In this study, the VWE changes in China between 2002 and 2007 were quantitatively assessed. An input-output model was adopted to analyze the changes in VWEs including the contribution of each economic sector to such changes. The model indicated that the total VWE increased by 2.96 × 10^10 m^3 in 2007 compared with export levels in 2002. Agriculture was the sector making the highest contribution (3.33 × 10^10 m^3) to this increase. Instead of the previously published decomposition analysis method for VWE changes, a weighted average decomposition (WAD) method was introduced to further quantify the contributions of the three major driving factors to VWE. These driving factors included technological upgrade, structural adjustment, and variations in export volume. The results of WAD were also compared with a previous method in decomposition analysis of VWE changes, revealing that accuracy of results could be improved through the adoption of WAD. Moreover, the results showed that the change in export volume and structural change led to increases in the VWE of 1.41 × 10^11 m^3 and 3.11 × 10^10 m^3, respectively. Comparatively, technological change reduced the VWE by 1.43 × 10^11 m^3.

Keywords: factor decomposition analysis, input-output analysis, virtual water export, water resource, weighted average decomposition