Inequality of virtual water consumption and economic benefits embodied in trade: a case study of the Yellow River Basin, China

Abstract

Abstract The Yellow River Basin (YRB) is facing a serious water shortage. How to effectively alleviate the water crisis and achieve sustainable development in the YRB has become a widespread concern. By using the interregional input–output tables of China in 2002, 2007, 2012 and 2017, we analysed the transfer of virtual water and value-added and the inequality embodied in trade between the YRB and other regions. Results demonstrated that: (1) for the YRB, the pressure on water resources was alleviated through the net inflow of virtual water after 2007. However, the economic situation deteriorated due to the net outflow of value-added in interregional trade after 2012. (2) There existed a serious inequality in virtual water consumption and economic benefits embodied in trade between the YRB and Beijing, Shanghai, etc., with regional inequality (RI) index exceeding 1. Meanwhile, agriculture faced the most serious inequality among all sectors in the YRB. Accordingly, the YRB should aim to optimise its industrial structure and improve water use efficiency to achieve a win-win situation for both economic development and net virtual water inflow. In addition, policymakers should take measures to flexibly adjust the trade scale between the YRB and other regions based on the RI index.