Research On China's Virtual Water Trade Strategy

Water is a fundamental natural resource, and also a determinant factor for environment construction. It has multiform values in ecologic, economic and social fields, and possesses multi-attributes of these different fields. Along with the rapid population growth and economics development, the conflict between water's supply and demand is becoming more and more obvious which has already attracted global attention. China is one of the 13 most water-deficient countries facing a challenging water safety problem. Therefore, how to solve water resources scarcity is a common issue for all countries around the world including China.The production of goods and services invariably involves water consumption. Water that is used in the process of creating an agricultural or industrial product is referred to as the"Virtual Water"contained in the product. Through international trade, water-scarce countries could purchase water-intensive products--especially foods, from water-rich countries to balance their water deficits and achieve water parity. Applying"Virtual water"and"Virtual water trade"-- a new series of concepts, this paper aims to shift attention from the traditional environmental protection domain to international trade field and explore a novel approach to solving China's water resources scarcity through systematic macro-regulation through analyses of trade structure.Based on a comprehensive literature review, this paper summarizes the theories and methods of the previous research of virtual water, and then collects abundant data to calculate virtual water contents of China's 36 kinds of crops and 70 kinds of livestock products. Adding the approximate virtual water trade relating industrial products, this paper receives China's total virtual water exports and imports in year 2000-2005, and concludes as follows:1. China remained a net virtual water importer in year 2000-2005. The net import of about 20 billion m3/yr has effectively alleviated some area's water scarcity.2. The structure of China's virtual water trade has been quite stable, but simplistic. Industrial products account for the biggest part of China's virtual water imports and exports. While in the primary products, the distribution is also centralized.3. Trade in crops accounts for the biggest part for China's virtual water net imports, while virtual water trade relating industrial products appears to be virtual water outflows, that is, virtual water trade surplus—and this surplus is relatively high in year 2000-2005.4. The government should consult the different virtual water content in products when adjusting its trade structure. For crops, this would result in the increased importation of corns and cash crops rather than vegetables and fruits. While for livestock products, we could expand the exports of milk products, swine and its related products.Finally, this paper evaluates virtual water strategy to be an effective and efficient measure to solve China's water resources crisis, which has broadened our perspective. The quantification of China's virtual water trade will further clarify multiple dimensions of water resources utilization, and guide the government to better implementation of virtual water strategy. For water-scarce areas, virtual water trade could serve as an alternative way to provide water resources without causing environmental problems. Therefore, extensive further research of virtual water and virtual water trade is imperatively needed and highly recommended.