Economic Development in Water Deficient Regions in China: the Perspective of Virtual Water Trade

Virtual water trade, which advocates water deficient regions to purchase water-intensive production from water rich nation or area and export water-saving production, is a strategic arrangement to alleviate the pressure of water deficient regions. The paper puts forward the view that regional selection of industrial development can't take only limited-factor of production into consideration but should consider the correlation effect of industrial system that is, promoting role of a certain industry to the whole regional economic system, to compare comprehensively measure coefficient of industrial relationship and content coefficient of virtual water. Then the industry can be divided into eight types according to the abovementioned comparison and strategy for industrial development selection will be put forward. Finally, we form input-output table based on data from Ningxia and calculate influence coefficient, sensitivity coefficient and total water input coefficient to make industrial style division and industrial development selection under water deficient condition.