Analysis of virtual water consumption in China: using factor decomposition analysis based on a weighted average decomposition model

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 5.92x10(11)m(3) in 2002 to 5.17x10(11)m(3) in 2007, which is mainly because of the technological effect (-5.48x10(11)m(3)). The increase in net VW exports is mainly due to the economic structure effect (6.19x10(9)m(3)) and the fast growth of exports (3.49x10(10)m(3)).