Analysis & Reviews

China's Hidden Water Flows

China’s Hidden Water Flows

Klaus Hubacek & Kuishuang Feng, two of the authors of  ”Virtual Scarce Water in China” share key findings from the paper, which analyses the flows of China’s virtual water. Unlike previous virtual water studies this study took into consideration water stress metrics.

The paper was published 12 June 2014. You can access the full paper (Feng, K., Hubacek, K., Pfister, S., Yu, Y., Sun, L., 2014. Virtual Scarce Water in China. Environmental Science & Technology 48, 7704-7713) here


China’s richest provinces have a substantial environmental impact on the country’s water-scarce regions. Highly developed but water-scarce regions in China, such as Shanghai, Beijing, and Tianjin, are contributing to water depletion in water-scarce regions of the country through imports of food, textiles, and other water intensive products. For example, purchasing cloth in Shanghai may not consume water directly, but the production of cloth requires cotton, which is water intensive to cultivate – indirectly contributing to the water scarcity in the less-developed cotton production regions. This dynamic also holds true for food and other products.

Tracing virtual scarce water flows across 30 sectors & 30 provinces

We used the concept of “virtual water” to track how water is used for the production of goods and services along their entire production chain and traded across regions.

~1,600 cum of water = 1 tonne of wheat

when a country imports a ton of wheat instead of producing it domestically, it saves most of that

When goods and services are exchanged, so is virtual water. For example, it takes about 1,600 cubic meters of actual water to produce one metric ton of wheat. When a country or region imports a ton of wheat instead of producing it domestically, it saves most of that. The same logic holds for other products such as computers, cars or toys. Whenever we buy these items we have also caused the use of thousands of liters of water in various places around the world where components of these items were produced. To account for these flows along global supply chains, we applied a multiregional input−output approach to assess virtual water flows across 30 sectors and 30 Chinese provinces connected via trade flows of goods and services.

our assessments account for water stress…

… this allows a better understanding of what is causing water scarcity & which regions are suffering from it

But while previous virtual water studies treated all water equally, we account for water stress to assess China’s hidden flows. The water stress index is calculated at the ∼50 km grid cells (0.5 arc minutes resolution) as a combination of water scarcity, which is commonly defined as the ratio of total annual freshwater withdrawals to hydrological availability, and impacts on ecosystem quality, which is depending on water resource availability, ecosystem type & climate conditions. The loss of ecosystem quality is quantified on the watershed level accounting for vulnerability of the total ecosystem regarding water loss.

Incorporating water scarcity into water consumption allows a better understanding of what is causing water scarcity & which regions are suffering from it.

This allows us to identify cases where importing water-intensive goods from other water-scarce regions may just shift the pressure to other regions. On the other hand we don’t need to worry about a large water footprint if the water is imported from water abundant areas. Previous studies often failed to account for this important difference.

~40% of China’s total water consumption traded across provinces… who used how much?

Our calculations show that in 2007 about 40% of total water consumption or 109 billion m3 of virtual water were traded across Chinese provinces. To account for the impacts that massive amount of water consumption creates in terms of areas of ecosystems affected we use the stress indicator to see how consumption in one part of China impacts ecosystems elsewhere.

The three mega cities, Tianjin, Shanghai, and Beijing are the top net importers (per capita and per unit of GDP of scarce water). For example figure 1 shows ecosystem impacts created by consumption in Shanghai. Only 20% of Shanghai’s scarce water footprint, or the amount of scarce water consumed, is from local watersheds while 80% is from water resources of other water-scarce regions, such as Xinjiang, Hebei, and Inner Mongolia. This disproportionate consumption of water by wealthier regions has environmental impacts and potential future impacts on water availability for the entire country.

“Tianjin, Shanghai & Beijing are the top net importers …

Only 20% of Shanghai’s scarce water footprint, or the amount of scarce water consumed, is from local watersheds while 80% is from water resources of other water-scarce regions”

Figure 1 - Distribution of ecosystem impacts of domestic consumption in Shanghai

When looking at the impacted provinces and where the water flows are going to, we get the following picture (see figure 2 for Xinjiang). The water scarce provinces, Xinjiang, Inner Mongolia, and Ningxia are the top three in terms of the net domestic exports of scarce water per capita, and per GDP. Of the top ten regions concerning scarce water footprints, eight are provinces in the water-scarce North, the other two, Jiangsu and Shanghai, are in the South but are also facing serious water scarcity.

Xinjiang, Inner Mongolia & Ningxia are the top three net exporters of water …

Figure 2 - Virtual scare water flows from Xinjiang

Ecosystem pressures in the North amplified through foreign export

The pressure on ecosystems in the northern provinces is further amplified through water withdrawal for export production leaving the country via the coastal provinces. For example, international export in Guangdong (see figure 3), which is located in the far south, results in significant ecosystem impacts in the northern provinces but to a lesser extent in the surrounding provinces. However, in terms of value added triggered by its international exports, Guangdong received 72% of the total value added, but Xinjiang and Inner Mongolia received less than 1% of the total.

pressure on ecosystems in the northern provinces is further amplified through water withdrawal for export production leaving the country via the coastal provinces”

Figure 3 - Distribution of ecosystem impacts of international exports by Guandong Shanghai

Provincial ecosystem quality tax may help relocate profits from rich to poor areas

We showed that consumption in highly developed coastal provinces is largely relying on water resources in the water-scarce northern provinces, such as Xinjiang, Hebei, and Inner Mongolia, thus significantly contributing to the water scarcity in these regions.

“importing water-intensive goods from other water-scarce regions may just shift the pressure to other regions, but the overall water problems may still remain”

Several studies have highlighted that water-scarce regions could decrease their production of water intensive food commodities to alleviate their water scarcity problems by producing instead goods and services with higher value added per unit of water consumed.

But many highly developed but water scarce regions, such as Shanghai, Beijing, and Tianjin, are already large importers of net virtual water at the expense of water resource depletion in other water scarce provinces. Thus, increasingly importing water-intensive goods from other water-scarce regions may just shift the pressure to other regions, but the overall water problems may still remain.

The rich coastal provinces gain economic profits from international exports at the expense of ecosystem quality in the less developed regions. Without local awareness and forceful policy support from China’s central government, the ecosystem quality in the water scarce regions would be further degraded, and this would result in problems to human health and potentially to social stability.

A uniform environment tax on the impacts of ecosystem quality may help relocate profits to poor regions for local environment protection

A uniform environmental tax across Chinese provinces on the impacts of ecosystem quality, and giving special consideration to ensuing social equity issues, may help because it relocates profits from rich regions to the poor regions for local environmental protection. In this way, the cost of mitigating ecosystem degradation would be shared by affluent consumers in coastal China who would pay more for goods and services imported from less-developed regions and consequently pay for part of the external costs.


Further Reading

Virtual Water

  • How Much Water Do You Use - Happy World Water Day! Coffee or Juice? Beer or Wine? Chicken or Cheese? Find out how much water you can save by making the right choices
  • 8 Things You Should Know: Rice & Water - How much of water & farmlands are used to grow rice in China? What about exposure to Cadmium, Mercury, Lead & Arsenic? Can China ensure rice security? Here are 8 things you should know about rice & water in China
  • Follow the UK: Import Water - China & the UK have similar per capita water resources. Find out how the UK has managed economic growth by “importing water” through trade. Should China follow suit? Debra Tan muses
  • Big Picture – Virtual Water

Water Scarcity & Demands

  • Can Cities Meet Increasing Water Demands - Nitin Dani and Georgina Glanfield from Green Initiatives Shanghai share their thoughts on how Chinese cities can ensure water security. Can the public play a role?
  • Bridging Gaps to Water Innovation - Water scarcity & pollution will drive innovation in partnerships and technology but the road to commercialisation remains long. Will Sarni, Partner at Deloittes discusses the barriers to innovation in the water sector
  • Water Resilience, Disclosure & Mismatch - Wai-Shin Chan, Director of Climate Change at HSBC on why water is more important than oil in an increasingly thirsty world and how water risk assessment, disclosure & cohesive policies are key to ensure growth
  • Big Picture – Who’s Running Dry?

Water Rights in China

  • Water Rights in China - Professor Jia Shaofeng, Deputy Director of the Center for Water Resources Research of CAS,  shares his in-depth insights on water rights in China – what they are, who owns them, how can they be “traded” & why a market trading system should be the way forward
  • Water Permits: How to Get Water in China - How are water total water quotas set? How can you access water in China? China Water Risk gives an overview on these and the risks associated when China’s water permit system is reformed
Klaus Hubacek

About Klaus Hubacek

Professor Klaus Hubacek is an ecological economist with a research focus on coupled natural and human systems. He has worked extensively with stakeholders in participatory research projects and has led large interdisciplinary research teams. He has published about 200 scientific articles on topics such as climate-change adaptation and mitigation, participatory modeling, ecosystems services, and land-use governance. He has conducted studies for a number of national agencies in Austria, China, Japan, the UK, and the United States.

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Kuishuang Feng

About Kuishuang Feng

Dr. Kuishuang Feng is a Research Assistant Professor at University of Maryland College Park. His research focuses on energy, carbon, water, and land accounting at different spatial scales (local, national, and global). His expertise is in spatial ecological-economic modeling with regards to sustainable production and consumption, sustainable supply chain, and scenarios analysis. Dr. Feng also studies energy-water nexus for different electricity generation technologies, such as coal, gas, nuclear, wind, and other renewables by applying hybrid life-cycle analysis approach.

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