Inter-Industry Transfer of Intermediate Virtual Water Scarcity Risk: The Case of China

Xin’er Ning, Yanjun Zhang (), Hongbo Xu, Wenxun Dong, Yuanxin Song and Liping Zhang
Additional contact information
Xin’er Ning: State Key Laboratory of Water Resources and Hydropower Engineering Science, Wuhan University, Wuhan 430072, China
Yanjun Zhang: State Key Laboratory of Water Resources and Hydropower Engineering Science, Wuhan University, Wuhan 430072, China
Hongbo Xu: State Key Laboratory of Water Resources and Hydropower Engineering Science, Wuhan University, Wuhan 430072, China
Wenxun Dong: State Key Laboratory of Water Resources and Hydropower Engineering Science, Wuhan University, Wuhan 430072, China
Yuanxin Song: State Key Laboratory of Water Resources and Hydropower Engineering Science, Wuhan University, Wuhan 430072, China
Liping Zhang: State Key Laboratory of Water Resources and Hydropower Engineering Science, Wuhan University, Wuhan 430072, China

Sustainability, 2023, vol. 15, issue 3, 1-19

Abstract: Multiple factors need to be considered when allocating water resources, among which water scarcity risk is often ignored. However, the unmet water demand of upstream sectors with high water dependency will exacerbate water scarcity, and lead to potential economic risk to the industrial chain. To solve it, we propose a method to quantify the intermediate virtual water scarcity risk transfer via the intermediate use matrix and Leontief inverse matrix, and apply it to virtual water trade in China in 2018. Meaningful conclusions are drawn as follows: (i) Although the water-use efficiency of all sectors in China increased steadily from 2007 to 2018, the overall input concentration of virtual water scarcity risk showed a rising trend, reflecting the gradual increase in the vulnerability of the industrial chain to water shortage. (ii) The virtual water scarcity risk in China mainly transferred through the secondary industry. The secondary industry accounted for 51.8% of the output and 71.8% of the input in the intermediate virtual water transfer, while 77.0% and 74.7%, respectively, in intermediate virtual water scarcity risk output and input. (iii) From 2007 to 2018, agriculture, chemical industry, metallurgy, electricity and heat supply always ranked as the top four of intermediate virtual water scarcity risk output sectors. As their downstream sectors, the construction industry, metallurgy, and other services are stable within the top four input sectors. (iv) The virtual water scarcity risk upstream transmitted is significantly dispersed after the intermediate inputs process, indicating that abundant import relationships are conducive to reduce the risk taken in. From the perspective of intermediate input, this paper argues that it is necessary to both ensure the water supply of the upstream source sectors and disperse the downstream import sources. Moreover, enriching industrial structures and closing production linkages between sectors is also beneficial for promoting sustainable economic development.

Keywords: virtual water; virtual water scarcity risk; water resources security; water resources allocation (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2071-1050/15/3/2658/pdf (application/pdf)
https://www.mdpi.com/2071-1050/15/3/2658/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:15:y:2023:i:3:p:2658-:d:1054616

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().