This paper adopts the logarithmic mean Divisia index in the family of spatial index decomposition analysis to decompose the driving effect of spatial differences of water intensity in China into intensity effect and structure effect employing data spanning 2000–2017. The results show that water use efficiency of the eastern provinces was always higher than that of the central provinces and western provinces except for Jiangsu and Hainan, and in the central and western regions, only Shanxi, Henan, Chongqing, and Shaanxi had higher efficiency levels than the national average level. Over that 17-year time period, the gap in water intensity exhibits a decreasing trend between the provincial level and average level (except for Heilongjiang and Chongqing). For industry water intensity, those provinces with a lower than average level were mainly in the eastern region. Except for Shanghai, Jiangsu, and Guangdong, the primary industry water intensity of the eastern provinces was always lower than the average level. Except for Fujian, Shanghai, Jiangsu, and Hainan, the secondary industry water intensity of the eastern provinces was always lower than the average level. Except for Guangdong, Fujian, and Hainan, the tertiary industry water intensity of the eastern provinces was always lower than average level. The water intensity of the secondary and tertiary industries in Shanxi and Inner Mongolia in the central and western regions was always lower than the average level. Lastly, the provinces in which the provincial proportion of the primary industry was lower than the average level were mainly in the eastern region, while conversely the same proportion of the primary industry among central and western provinces was generally high. Therefore, provinces should formulate and implement water resource policies that are different and pertinent to their own actual conditions.