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

The use of the global value chain (GVC) method has been gaining traction in recent research on resource use for production and trade. China has become one of the largest centers for forward- and backward-linkages for trade in inputs for agricultural and food products. Traditional methods of virtual water (VW) trade show the overestimation of China’s use of foreign VW. Here, 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 VW through its trade in primary and net exporter of blue VW through the processed agricultural commodities. It is a net importer of green VW through primary and 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. We conclude that the sustainability of global water resources can be achieved through better estimates on VW trade and sharing the responsibility by the end-users.