Analysis of virtual water consumption in China: using factor decomposition analysis based on a weighted average decomposition model. (21st November 2013) - Zhi, Yuan
Abstract Exploring the cause‐and‐effect relationship between economic sectors and water resources is important to China. This study implemented a factor decomposition analysis by weighted average decomposition (WAD) model on the changes of Chinese virtual water (VW) consumption between 2002 and 2007, which includes both direct water consumption (consumed to produce final products) and indirect water consumption (consumed to produce intermediate products). The change in VW consumption is decomposed into three determinant factors: technological effect, economic structural effect and the products' scale effect. The results show that the volume of VW consumption in China has decreased from 5.92 × 1011 m3 in 2002 to 5.17 × 1011 m3 in 2007, which is mainly because of the technological effect (−5.48 × 1011 m3). The increase in net VW exports is mainly due to the economic structure effect (6.19 × 109 m3) and the fast growth of exports (3.49 × 1010 m3).