A Global Value Chain Analysis of Chinas Virtual Water Footprint Through Agricultural Trade

Providing adequate food for the increasing population with higher incomes while ensuring the sustainability of agriculture had been a significant challenge for China. Due to heightened pressure on its domestic resources, China has started to import large quantities of food crops like soybean and maize in recent years. At the same time, China’s exports of processed food, textile, and some crops have increased at a rapid pace. We use global value chain analysis based on the GTAP database to get the embodied trade of VW for China in the major agricultural sectors and agro-based industries. We find that China is a net importer of blue and green VW through its trade in the primary and net exporter of blue and green VW in processed agricultural commodities. The GVC method reveals that China is partially responsible for the imports of blue water, while the rest of the imports are caused by other countries through their imports of blue VW from China. By moving green VW from humid regions to dry regions, China’s trade in agricultural commodities creates huge savings of green VW for the world. We conclude that the sustainability of global water resources can be achieved through the combination of reliance on domestic and foreign markets.