Patterns and driving factors of agricultural virtual water imports in China

Recent studies have raised a concern that the adverse impact of global virtual water trade on water depletion might pose potential risks to future food trade and water security. In this study, we investigate the patterns and drivers of agricultural virtual water imports in China to explore efficient measures to promote the sustainability of agricultural virtual water trade. The panel gravity model and the quantile regression are constructed in this research based on virtual water content and agricultural trade data of 245 categories of HS 6-bit encoded crop and animal products from 49 major exporters during 1998-2018. The main results are as follows: (1) Agricultural virtual water imports in China show a strong upward trend with an average annual growth rate of 13.09%, and oil products occupy the largest share. Both the number of import sources (extended margins) and the import volume from each county (intensive margins) show an increasing trend, but America makes the greatest contribution to virtual water imports of China. (2) Agricultural virtual water imports of China could well match the water resource endowment of exporters, and could also achieve net global water savings, which is beneficial to the sustainability of global water utilization. (3) Water and land resource endowments and economic scale of exporter as three essential supply factors have a positive impact on agricultural virtual water imports of China. Among demand factors, water demand of product and economic scale of China has a positive effect, while import price has a negative effect. Moreover, supply and demand factors have a stronger impact at higher quantiles. In addition, trade cost factors, including average tariff, bilateral exchange rate, and Free Trade Assignment (FTA) could also significantly affect agricultural virtual water imports. Data Availability: Data will be made available on request.