Virtual Water Accounting in Northeast China Based on Multi-Regional Input-Output Analysis ()
1. Introduction
Water resources are foundational and strategic for sustaining regional socio-economic development. Influenced by both natural endowments and human activities, a long-standing structural mismatch exists in China between the spatial distribution of water resources and productivity layout. As crucial commercial grain bases and traditional industrial hubs, the three provinces of Northeast China fulfill strategic responsibilities in safeguarding national food and energy security. However, they simultaneously face challenges such as heavy industrial structures, high agricultural irrigation intensities, and intensifying localized water stress. In this context, optimizing water resource allocation to reconcile regional development with resource conservation has become an urgent scientific priority.
In 1998, Allan [1] first introduced the concept of virtual water, defining it as the water embodied in products and services. Virtual water transfers implicitly through inter-regional trade. Hoekstra [2] further proposed the virtual water strategy, suggesting that water-intensive industries be exported via trade from water-abundant regions to water-scarce regions, thereby achieving optimal water resource allocation. Currently, input-output (IO) models are widely employed to quantify and assess virtual water flows [3] [4]. These models are classified into single-region input-output (SRIO) models and multi-regional input-output (MRIO) models. Compared to SRIO models, MRIO models offer a comprehensive framework for capturing trade-driven embodied water resources and their spatial transfers across sectors in different regions. Consequently, researchers globally have utilized MRIO models to investigate virtual water at various scales, primarily focusing on national [5]-[9], regional [10]-[14], and inter-provincial levels [15]-[20].
Significant heterogeneity exists among cities within Northeast China regarding resource endowments, industrial structures, and economic tiers. Examining virtual water transfers solely at the provincial scale often masks severe efficiency polarization at the prefecture-level city scale. To address this gap, this study uses an MRIO model to elucidate virtual water transfer patterns across 36 prefecture-level cities. This research deepens the understanding of implicit inter-city water allocation mechanisms in Northeast China and provides a quantitative foundation for collaborative water governance and differentiated policy-making.
2. Data Sources and Methodology
2.1. Data Sources and Processing
This study focuses on 36 prefecture-level cities in Northeast China for the year 2017, covering Liaoning, Jilin, and Heilongjiang provinces. Input-output data were obtained from the 2017 City-Level Multi-Regional Input-Output Table for China published by the China Carbon Emission Accounts and Datasets (CEADs). Built upon 42 unmerged sectors, this dataset provides an MRIO framework encompassing 1512 “city-sector” units, including intermediate input matrices, final demand matrices, value-added matrices, and total output vectors, establishing the foundational data support for city-scale virtual water accounting.
To balance water data availability with analytical interpretability, and in accordance with the Industrial Classification for National Economic Activities (GB/T 4754-2011), the 42 sectors were aggregated into 7 major categories: Agriculture, Mining, Manufacturing, Electricity and Water Supply, Construction, Transportation, and Services (Table 1). The MRIO table was consolidated accordingly.
Regarding water use data, agricultural water use was obtained directly from the water resources bulletins of each region. For each city, water use data were preferentially taken from the 2017 Water Resources Bulletin of the corresponding city. For cities without a separately published prefecture-level water resources bulletin, data were derived from the 2017 Water Resources Bulletins of Liaoning, Jilin, and Heilongjiang provinces and statistical yearbooks, and disaggregated in proportion to agricultural value added, gross industrial output, or water use. The water use variable in this study follows the “water use” definition in the Water Resources Bulletin, i.e., water withdrawal, including surface water, groundwater, other water sources, and self-supplied water, without deducting return flow. Therefore, the virtual water accounting in this study reflects virtual water flows under a water withdrawal perspective rather than a consumptive water use perspective; if comparison with consumptive water use is required, return flow should be further deducted.
For mining, manufacturing, electricity and water supply, construction, transportation, and services, water use was indirectly allocated using industrial water use and urban public water use, with reference to existing studies [21]. Specifically, industrial water use was allocated to mining, manufacturing, and electricity and water supply, while urban public water use was allocated to construction, transportation, and services. The allocation coefficients were determined by the proportion of intermediate inputs from the “production and supply of water” sector to the corresponding sectors in each city, and the specific formula is provided in reference [22]. If the intermediate input of a sector is zero or missing, allocation is based on the proportion of that sector’s total output or value added in the total output or value added of sectors in the same group; if allocation remains infeasible, the water use of that sector is set to zero. Agricultural water use was obtained directly from the water resources bulletins and was not involved in the above allocation. If the intermediate input of a sector is zero or missing, the allocation is based on the proportion of that sector’s total output or value added in the total output or value added of sectors in the same group; if allocation remains infeasible, the water use of that sector is set to zero.
Table 1. Sector aggregation mapping for 36 cities in Northeast China (7 merged sectors).
Aggregated Sector
(7 Sectors) |
Original 42 Sectors in IO Table |
42-Sector Code |
Agriculture |
Agriculture, Forestry, Animal Husbandry, and Fishery Products and Services |
01 |
Mining |
Coal Mining and Washing Products |
02 |
Petroleum and Natural Gas Extraction Products |
03 |
Metal Ore Mining and Dressing Products |
04 |
Non-metallic Mineral and Other Ore Mining and Dressing Products |
05 |
Manufacturing |
Food and Tobacco |
06 |
Textiles |
07 |
Textile Garments, Shoes, Caps, Leather, Down, and Related Products |
08 |
Wood Processing Products and Furniture |
09 |
Paper Processing, Printing, and Educational and Sports Goods |
10 |
Petroleum, Coking, and Nuclear Fuel Processing Products |
11 |
Chemical Products |
12 |
Non-metallic Mineral Products |
13 |
Smelting and Pressing of Metals |
14 |
Metal Products |
15 |
General Purpose Equipment |
16 |
Special Purpose Equipment |
17 |
Transport Equipment |
18 |
Electrical Machinery and Equipment |
19 |
Communication Equipment, Computers, and Other Electronic Equipment |
20 |
Instrumentation |
21 |
Other Manufactured Products |
22 |
Waste and Scrap |
23 |
Metal Products, Machinery, and Equipment Repair Services |
24 |
Electricity and Water Supply |
Production and Supply of Electric Power and Heat |
25 |
Production and Supply of Gas |
26 |
Production and Supply of Water |
27 |
Construction Transportation Services |
Construction |
28 |
Transportation, Storage, and Postal Services |
29 |
Wholesale and Retail |
30 |
Accommodation and Catering |
31 |
Information Transmission, Software, and Information Technology Services |
32 |
Financial Services |
33 |
Real Estate |
34 |
Leasing and Business Services |
35 |
Scientific Research and Technical Services |
36 |
|
Water Conservancy, Environment, and Public Facilities Management |
37 |
Resident Services, Repair, and Other Services |
38 |
Education |
39 |
Healthcare and Social Work |
40 |
Culture, Sports, and Entertainment |
41 |
Public Administration, Social Security, and Social Organizations |
42 |
2.2. Methodology
Multi-Regional Input-Output Model
The multi-regional input-output (MRIO) model captures economic interdependencies across sectors in different regions, serving as a key tool for accounting inter-regional virtual water flows.
Assuming an input-output system containing
cities and
sectors, the total number of sectoral units in the system is
. The basic MRIO formulation is expressed as:
(1)
where
represents total output of sector
in region
;
denotes intermediate flow from sector
in region
to sector
in region
;
is final demand in region
for goods/services from sector
in region
; and
is exports from sector
in region
outside the economic system.
The direct input coefficient
measures direct input required from sector
in region
per unit of total output in sector
in region
:
(2)
where
represents total input (output) of sector
in region
.
Substituting Equation (2) into Equation (1) yields:
(3)
In matrix form:
(4)
where
,
,
, and
represent total output matrix, direct input coefficient matrix, final demand matrix, and export coefficient matrix, respectively.
Transforming Equation (4) into demand-driven form:
(5)
where
is the Leontief inverse matrix. The element
represents output generated in sector
of region
to satisfy one unit of final demand in sector
of region
.
Incorporating water consumption into the IO framework, direct water intensity
is defined as:
(6)
where
is direct water intensity of sector
in region
;
is direct water consumption of sector
in region
; and
is total output of sector
in region
.
Total water consumption coefficient
represents total (direct + indirect) water consumption induced in region
to satisfy one unit of final demand in sector
of region
:
(7)
Virtual water outflow from sector
in region
to final demand in region
is calculated as:
(8)
where
is virtual water flow from origin
to sector
in destination
;
is total water consumption coefficient; and
is final demand satisfied by region
for region
.
Similarly, virtual water flow from origin
to sector
in destination
(virtual water inflow to city
) is:
(9)
Net virtual water flow for city
(
) is:
(10)
where
.
denotes net virtual water outflow, while
represents net virtual water inflow.
This study further distinguishes “inter-city virtual water flows within Northeast China” from “virtual water exports outside Northeast China”. The total scale of bilateral inter-city virtual water flows within Northeast China is defined as:
(11)
where the summation excludes
, and both
and
refer to the 36 prefecture-level cities in Northeast China. This indicator only accounts for virtual water embodied in inter-city trade within Northeast China and excludes exports outside the system. Virtual water exports outside Northeast China are defined as:
(12)
where
, out denotes the virtual water embodied in final demand exports from sector
in city
to regions outside Northeast China. This part is not included in
Total actual regional water use is
(13)
In this study,
.
The total positive net inflow is defined as the sum of net inflows of all cities with
:
(14)
If only inter-city trade within Northeast China is considered, the sum of net flows across all cities is zero, i.e.,
(15)
The total positive net inflow equals the total negative net outflow in absolute value. If exports and imports outside Northeast China are included, the regional net output should be calculated separately.
3. Results and Discussion
3.1. Sectoral Water Intensity Accounting
Direct water consumption (DWC) coefficients and total water consumption (TWC) coefficients across the 7 aggregated sectors exhibit substantial polarization (Table 2). Agriculture has the highest direct water coefficient (0.051338 × 108 m3/108 yuan, i.e., 513.38 m3/104 yuan), approximately 24.5 and 76.8 times higher than Mining (0.002095 × 108 m3/108 yuan) and Manufacturing (0.000669 × 108 m3/108 yuan), respectively. reflecting agriculture’s extreme direct dependence on water resources.
Table 2. Sectoral direct water consumption coefficients and total water consumption coefficients.
Sector |
Direct Water Coefficient DWC (108 m3/108 yuan) |
Total Water Coefficient TWC (108 m3/108 yuan) |
Ratio (TWC/DWC) |
Agriculture |
0.051338 |
0.081305 |
1.58 |
Mining |
0.002095 |
0.002906 |
1.39 |
Manufacturing |
0.000669 |
0.019916 |
29.77 |
Electricity and Water Supply |
0.006223 |
0.015323 |
2.46 |
Construction |
0.000375 |
0.006597 |
17.59 |
Transportation |
0.000089 |
0.004620 |
51.91 |
Services |
0.000272 |
0.002841 |
10.44 |
Note: Coefficients are intensity indicators in 108 m3 per 108 yuan, i.e., water use per unit of monetary output; monetary output is in 2017 current prices; 1 unit = 104 m3 per 104 yuan.
However, evaluated by total water consumption coefficients, ratios of TWC to DWC for Manufacturing (0.01996 × 108 m3/108 yuan) and Construction (0.006597 × 108 m3/108 yuan) reach 29.77 and 17.59, respectively. This highlights secondary industry’s implicit water consumption profile: “low direct consumption, high upstream inducement”. Through complex intermediate supply chain networks, manufacturing and construction indirectly consume vast amounts of water embedded in upstream agricultural products (e.g., raw materials for food processing) and utility inputs. Although Transportation exhibits a high ratio (51.91), its small base value primarily reflects marginal inducement driven by indirect demand for energy and agricultural goods. These results demonstrate that evaluating sectoral water consumption solely based on direct water use overlooks hidden transfer risks along middle-stream supply chains.
3.2. Spatial Patterns of Net Inter-City Virtual Water Flows
Total volume and spatial distribution of inter-city virtual water flows characterize internal coupling between economic links and resource consumption across Northeast China (Figure 1). In 2017, total virtual water flows among the 36 cities reached 230 × 108 m3, accounting for 41.1% of total actual regional water use. This scale demonstrates that nearly 40% of water consumption undergoes transboundary implicit transfer via inter-city trade in goods and services, making virtual water allocation a crucial mechanism regulating regional water cycles. This total excludes virtual water exports outside Northeast China; such exports require separate accounting. The strategic role of Northeast China as a net supplier of primary industrial and agricultural resources nationwide remains notable.
At the urban scale, net virtual water flows exhibit a distinct “core-periphery” spatial polarization. Only 10 cities act as net virtual water importers, while 26 cities are net exporters. Net inflow regions are concentrated in top-tier central cities: Changchun, Harbin, and Dalian record net inflows of 10.14 × 108 m3, 9.56 × 108 m3, and 8.33 × 108 m3, respectively. Combined net inflows of these three hubs total 27.99 × 108 m3, accounting for 79.2% of the total positive net inflow (35.34 × 108 m3) in the region. The remaining seven net-importing cities, such as Shenyang and Jilin, exhibit relatively modest net inflow volumes. If only intra-Northeast China trade is considered, the sum of net flows across all cities is zero, and the total positive net inflow equals the total negative net outflow in absolute value. This concentration pattern indicates that high-tier urban centers serve as primary destination sinks for virtual water transfers, driven by large population scales, strong consumer demand, and clusters of high-value-added industries.
Conversely, the 26 net-exporting cities are widely dispersed geographically. Jiamusi ranks first in net outflow volume, reaching 10.38 × 108 m3; net outflows from Jixi, Qiqihaer, and Songyuan follow at 2.54 × 108 m3, 2.29 × 108 m3, and 1.86 × 108 m3, respectively. These cities are predominantly agricultural resource-based or resource-exhausted regions. Their substantial net virtual water exports reflect their socio-economic roles as key suppliers of primary agricultural commodities and raw materials within regional division of labor. Spatially, net virtual water inflow hubs cluster as distinct patches along key transit corridors (e.g., Harbin-Changchun and Harbin-Dalian railways), whereas net outflow regions spread across the Sanjiang Plain, Songnen Plain, and Western Liaoning, painting a spatial landscape of “core consumption driving peripheral resource support”.
If only intra-Northeast China trade is considered, the sum of net flows across all cities is zero, and the total positive net inflow equals the total negative net outflow in absolute value.
Figure 1. Net virtual water flows across Northeast China. Note: The base map is derived from the Fundamental Geographic Information Database; no alterations have been made to national administrative boundaries.
3.3. Sectoral Composition of Virtual Water Flows
Differences in virtual water inflow and outflow dynamics across cities are fundamentally shaped by sectoral trade structures. As illustrated in Figure 2 and Figure 3, trade in agricultural products serves as the primary driver of virtual water outflows due to agriculture’s significantly higher direct water intensity relative to other sectors. For example, Jiamusi’s massive net outflow (10.38 × 108 m3) stems mainly from agricultural exports. As a key commercial grain hub in Heilongjiang Province, Jiamusi exports water-intensive agricultural products to consumption hubs like Harbin and Changchun. Conversely, although Harbin possesses well-developed manufacturing and service sectors, agricultural virtual water continues to comprise the largest share of its net virtual water inflows. This underscores how large resident populations and high consumption levels in provincial capitals generate strong indirect resource dependence on agricultural water.
![]()
Figure 2. Inter-sectoral net virtual water outflows in Northeast China.
Figure 3. Sectoral composition of total virtual water inflows in Northeast China. Note: Figure 3 shows total virtual water inflows (from all source cities), whereas the net inflows reported in Section 3.2 refer to total inflows minus total outflows. Therefore, values in Figure 3 are larger than the net inflow values reported in Section 3.2.
Implicit water pull effects generated by manufacturing and construction are more pronounced in central cities. In Dalian, a coastal industrial center, local manufacturing water consumption primarily serves municipal output; however, through upstream supply-chain linkages, Dalian indirectly absorbs substantial virtual water embodied in mining and raw materials from surrounding cities. This demonstrates how secondary processing industries pull water resources from foundational sectors. Furthermore, manufacturing products with strong cross-regional marketability lead to dispersed virtual water destinations, primarily transferring to regions outside Northeast China and developed coastal areas. Virtual water flows associated with construction correlate strongly with fixed-asset investment and infrastructure scale, resulting in significantly higher net construction-related virtual water inflows in central cities compared to small- and medium-sized cities.
3.4. Inter-City Virtual Water Flow Networks
To isolate core backbone pathways within complex trade networks while filtering out noise from low-volume connections, the top 120 virtual water flow paths were selected to generate a chord diagram network. These 120 primary pathways account for over 85% of total inter-city virtual water flows, accurately representing the network’s key topology.
Network analysis indicates (Figure 4) that inter-city virtual water flows in Northeast China exhibit strong intra-provincial agglomeration and are constrained by administrative boundaries. Intra-provincial flows in Heilongjiang exhibit the highest intensity, forming a unipolar network anchored by Harbin and radiating outward. Cities such as Jiamusi, Qiqihaer, Daqing, and Suihua funnel virtual water to Harbin through thick flow chords. After absorbing regional agricultural and resource-based virtual water, Harbin utilizes a portion to meet municipal consumption and exports the remainder outside the province. Jilin Province exhibits a similar unipolar clustering pattern centered on Changchun, with substantial industrial and agricultural virtual water flowing in from neighboring cities like Jilin City and Siping. Liaoning Province exhibits a dual-core driving structure led by Shenyang and Dalian: Shenyang exerts strong radiative pull over the Central-South Liaoning urban agglomeration, while Dalian absorbs diversified inter-city inputs via its coastal location. Nevertheless, intra-provincial transfers remain dominant across Liaoning.
In contrast, inter-provincial virtual water flows remain small in scale and weak in connectivity, appearing sparsely as agricultural virtual water transfers from Heilongjiang to Liaoning and intermediate manufacturing flows from Jilin to Liaoning. Total intra-provincial flows within Heilongjiang reach 36.13 × 108 m3, vastly outstripping cross-provincial flows. This network topology reveals underlying mechanisms governing water constraints and industrial coordination in Northeast China: bound by existing administrative divisions and localized industrial chain architectures, individual provinces prioritize completing production-consumption cycles of water-intensive products internally. Consequently, spatial market-based allocation of water elements remains constrained by provincial administrative barriers.
Figure 4. Chord diagram of inter-city virtual water flows in Northeast China.
4. Conclusions and Policy Implications
Based on the 2017 city-scale MRIO table for 36 prefecture-level cities in Northeast China, this study systematically quantified inter-city virtual water flow patterns. The main conclusions are as follows:
1) Heterogeneity in sectoral water intensity fundamentally drives virtual water transfers. Agriculture exhibits the highest direct water coefficient (0.0513 × 108 m3/108 yuan, i.e., 513.38 m3/104 yuan), approximately 76.8 times that of manufacturing, confirming its dominant position in direct water consumption. The ratios of total to direct water coefficients for manufacturing and construction are 29.77 and 17.59, respectively, demonstrating strong upstream supply-chain water pull effects and serving as critical intermediaries for implicit virtual water flows.
2) Inter-city virtual water flows are substantial, illustrating Northeast China’s clear identity as a net resource exporter. Total inter-city virtual water flows within Northeast China reach 230 × 108 m3, representing 41.1% of actual regional water use. This total excludes exports outside Northeast China; such exports require separate accounting, indicating that while Northeast China secures national food and energy security, it bears substantial implicit costs associated with trans-boundary water transfers.
3) Inter-city virtual water transfers display a polarized “core-periphery” spatial pattern. The three hub cities—Changchun, Harbin, and Dalian—have combined net inflows of 27.99 × 108 m3, accounting for 79.2% of the total positive net inflow. Conversely, 26 agricultural and resource-based cities (e.g., Jiamusi, Jixi, Qiqihaer) serve as primary net exporters, reflecting how urban hierarchy and spatial division of labor shape virtual water directionality.
4) Virtual water flow networks exhibit marked intra-provincial self-containment and unipolar/bipolar clustering. Heilongjiang, Jilin, and Liaoning are dominated by intra-provincial flows, with inter-provincial flow intensity remaining weak. Trade in water-intensive products relies heavily on intra-provincial supply chains, creating implicit administrative barriers to regional water allocation optimization.
Based on these findings, the following policy recommendations are proposed to promote coordinated regional water development across Northeast China:
1) Implement differentiated, sector-specific water conservation strategies. Given agriculture’s high direct water reliance and industry’s high indirect inducement, traditional end-of-pipe agricultural water conservation must be integrated with green supply-chain management in manufacturing. Major agricultural cities such as Jiamusi and Qiqihaer should accelerate high-efficiency water-saving irrigation and modern irrigation infrastructure upgrades. In industrial hubs like Changchun, Harbin, and Dalian, water-saving standards should be established across full product lifecycles to reduce secondary manufacturing reliance on water-intensive upstream inputs.
2) Establish a trans-boundary virtual water ecological compensation mechanism. High virtual water demand from core cities on peripheral agricultural and resource-based regions represents structural resource support provided by peripheries to sustain core development. A “Virtual Water Ecological Compensation Fund” should be explored, funded by net virtual water importers (Changchun, Harbin, Dalian) to compensate net exporters (Jiamusi, Jixi). Through fiscal transfer payments, joint industrial development, or technical assistance, ecological and water resource pressures in resource-exporting regions can be effectively alleviated.
3) Dismantle administrative barriers to build an integrated regional water governance system. To address weak inter-provincial flows and provincial self-containment, industrial layout and water allocation across the three provinces should be holistically planned under the Comprehensive Revitalization Strategy of Northeast China. Inter-provincial supply chain integration should be encouraged to facilitate the scientific gradient transfer of water-intensive industries based on regional water carrying capacities, driving a paradigm shift from “intra-provincial self-circulation” to “regionally optimal allocation”.
Acknowledgements
The author thanks the China Carbon Emission Accounts and Datasets (CEADs) for providing the city-level multi-regional input-output data, and the relevant water resources bulletins for providing water use data. In addition, the author appreciates the academic support provided by Liaoning Normal University. Special thanks are given to all individuals and institutions that contributed to data collection and processing for this study.