Assessment of regional trade and virtual water flows in China

The success of China's economic development has left deep marks on resource availability and quality. Some regions in China are relatively poor with regards to water resources. This problem is exacerbated by economic growth. Flourishing trade activities on both domestic and international levels have resulted in significant amounts of water withdrawal and water pollution. Hence the goal of this paper is to evaluate the current inter-regional trade structure and its effects on water consumption and pollution via ‘virtual water flows’. Virtual water is the water embedded in products and used in the whole production chain, and that is traded between regions or exported to other countries. For this assessment of trade flows and effects on water resources, we have developed an extended regional input-output model for eight hydro-economic regions in China to account for virtual water flows between North and South China. The findings show that the current trade structure in China is not very favorable with regards to water resource allocation and efficiency. North China as a water scarce region virtually exports about 5% of its total available freshwater resources while accepting large amounts of wastewater for other regions' consumption. By contrast, South China a region with abundant water resources is virtually importing water from other regions while their imports are creating waste water polluting other regions' hydro-ecosystems.     

虚拟水、虚拟水贸易理论研究综述

相对于水价和用水技术能够提高水资源在当地的配置效率,虚拟水贸易则可以提高水资源在全球范围内的配置效率。虚拟水从水资源生产率较高的国家流向水资源较低的国家意味着在全球层次上水资源的节约。因此,国家之间、洲际之间虚拟水贸易被看作提高全球水资源利用效率和缺水国家获得水安全的一个有力工具。     

Agricultural impacts on water quality and implications for virtual water trading decisions

Research on the flow of virtual water associated with agricultural crop production and trade has focussed almost entirely on water quantity. It is pertinent to consider and quantify the opportunity costs in terms of reduced water quality associated with crop production. This paper investigates the impacts of water quality on virtual water trading by creating a proxy for water quality impacts by calculating the amount of water required to dilute nonpoint-source agrochemical inputs to relevant water quality guideline values. The quantity of water required for dilution of five agrochemicals (two nutrients; nitrogen and phosphorus and three insecticides; azinphos-methyl, chlorpyrifos and endosulfan) was estimated for five crops in South Africa (maize, wheat, sugar cane, citrus and cotton) and compared to consumption of irrigation water (blue water) and rainfall (green water) for the same crops. Results indicate that the volume of water required for dilution is similar to the total sum of green and blue water required for crop production, but significantly greater than blue water use (irrigation use). For all crops phosphorus losses require greater amounts of water for dilution than for nitrogen, while pesticides result in the greatest water quality use. Estimates of water quality use are based on assumptions for a number of input variables (i.e. fertilizer application rates, percentage loss of agrochemicals from cropped areas). A Monte Carlo analysis (5000 iterations) was run to randomly select input variables from within defined ranges. Water quality use was calculated and expressed as a factor of blue water use. For all crops the average factor indicated that the volume of water required for dilution of all agrochemicals was greater than that required for irrigation. The results of this study clearly indicate that the impacts of agriculture on water quality need to be considered in virtual water trading scenarios. The incorporation of a method to predict impacts on water quality provides a comparative tool which generates a more holistic frame of reference for decision making with regard to impacts on the water resource and virtual water trading.     

Are virtual water “flows” in Spanish grain trade consistent with relative water scarcity?

Virtual water adds a new dimension to international trade, and brings along a new perspective about water scarcity and water resource management. Most virtual water literature has focused on quantifying virtual water “flows” and on its application to ensure water and food security. Nevertheless, the analysis of the potential gains from international trade, at least from a water resources perspective, needs to take into account both spatial and temporal variations of blue (groundwater and stream flow) and green (soil moisture) water, as well as the socioeconomic and policy conditions. This paper evaluates whether Spanish international trade with grains is consistent with relative water scarcity. For this purpose, the study estimates the volume and economic value of virtual water “flow” through international grain trade for the period 1997-2005, which includes 3 years with different rainfall levels. The calculations show that Spain is a net virtual water “importer” through international grain trade. The volume of net virtual water “imports” amounts to 3420, 4383 and 8415 million m³ in wet (1997), medium (1999) and dry (2005) years, respectively. Valuing blue water at its shadow price or scarcity value, blue water “exports” oscillate between 0.7 and 34.2 million Euros for a wet and dry year, respectively. Overall, grain trade is apparently consistent with relative water scarcity as net imports increase in dry years. However, the evolution of grain exports, expressed as a variation in quantity and volume, does not match the variations in resource scarcity. A disaggregated crop analysis reveals that there are other factors, such as quality, product specialization or the demand for a standardized product, which also influence trade decisions and are not included in the notion of virtual water. These facts, among others, can therefore create potential distortions in the application of virtual water to the analysis of specific trade patterns. Nevertheless, from a water resources perspective, virtual water can bring important insights across countries for improving water and land management globally, fostering adaptation strategies to climate change and to transboundary resource management.     

Input–output analysis of virtual water transfers: Case study of California and Illinois

Increasing pressures on water resources in the two economically important states of California (CA) and Illinois (IL) have created a need for critical information related to sustainable water use and management. This paper applies input–output (IO) analysis to evaluate water use and quantify virtual water transfers involving the two states. Results show that aquaculture requires the largest input of direct water per unit of economic output, followed by crops, power generation, livestock, mining, services, domestic, and industry. Low water use intensity industry and services sectors contributed the largest proportions of value added and employee compensation. In 2008, the two states were net virtual exporters, with CA exporting 1.3 times the net export volume of IL. More than 72% of virtual water exports for each state originated from the high total water use intensity but low value added crops sector, with irrigation and rainfall contributing 99% and 97% of the crop-related exports for CA and IL, respectively. Virtual water export volumes were 59% for CA and 71% for IL when compared to actual water use. These results highlight the need to consider water use efficiency and opportunity cost when managing water under scarcity conditions.     

Substitution between water and other agricultural inputs: Implications for water conservation in a River Basin context

Substitution of irrigation water with other agricultural inputs could be an important means to conserve water in the face of growing pressures on water resources from both nonagricultural water demands and environmental water requirements. This paper discusses the potential of such substitution through an empirical analysis based on a multiple-input crop production function at the field and farm scales complemented with a numerical modeling exercise at the basin scale. Results from the crop production function analysis show that under both crop yield and net profit maximization, water is a substitute to other crop inputs for high-value crops, and is a complement to water for low-valued crops. At the basin scale, an integrated economic-hydrologic river basin model is used to analyze the role of other factors in crop input substitution, including the spatial connections among water sources and demands, hydro-agronomic conditions, and institutional settings for water allocation. Results show that in the case study area, the Maipo River basin in Chile, where water is very scarce, moving from the current, input-constrained, situation to full optimization of water resources leads to an increase in all crop inputs, including water. In that case, 301 million m³ of additional water use results in additional net profits of USD 11 million. However, if the water fee is raised by a factor of eight while overall basin irrigation profits are maintained at the original, baseline level, a reduction of water withdrawals by 326 million m³ is traded off with costs of USD 43.2 million for other inputs. Irrigation districts with a high share of low-value crops have a low potential for substituting water with other crop inputs. Therefore, investments for water substitution should also be kept low in these areas.     

The water footprints of Morocco and the Netherlands: Global water use as a result of domestic consumption of agricultural commodities

The volume of international trade in agricultural commodities is increasing faster than the global volume of production, which is an indicator of growing international dependencies in the area of food supply. Although less obvious, it also implies growing international dependencies in the field of water supply. By importing food, countries also import water in virtual form. The aim of the paper is to assess the water footprints of Morocco, a semi-arid/arid country, and the Netherlands, a humid country. The water footprint of a country is defined as the volume of water used for the production of the goods and services consumed by the inhabitants of the country. The internal water footprint is the volume of water used from domestic water resources; the external water footprint is the volume of water used in other countries to produce goods and services imported and consumed by the inhabitants of the country. The study shows that both Morocco and the Netherlands import more water in virtual form (in the form of water-intensive agricultural commodities) than they export, which makes them dependent on water resources elsewhere in the world. The water footprint calculations show that Morocco depends for 14% on water resources outside its own borders, while the Netherlands depend on foreign water resources for 95%. It is shown that international trade can result in global water saving when a water-intensive commodity is traded from an area where it is produced with high water productivity to an area with lower water productivity. If Morocco had to domestically produce the products that are now imported from the Netherlands, it would require 780 million m³/year. However, the imported products from the Netherlands were actually produced with only 140 million m³/year, which implies a global water saving of 640 million m³/year.     

基于虚拟水视角的东北粮食作物发展战略分析

本文主要研究我国东北地区主要粮食作物的虚拟水含量以及东北三省的虚拟水流量,一方面旨在为东北地区粮食作物的布局和贸易战略调整提供依据,另一方面也为我国粮食安全和水安全的宏观调控提供政策依据。本文基于联合国粮农组织提供的CropWat软件以及ClimWat数据库来计算粮食作物虚拟水含量,采用联合国教科文组织水资源教育研究院提供的虚拟水相关公式来计算虚拟水流量,得出了东北三省五种主要粮食作物2000—2007年的虚拟水含量及该地区虚拟水的时序流量。最后得出结论:东北地区的粮食作物具有普遍的节水种植优势;东北地区的虚拟水输出量可观,进入量稀少。     

科学孵化苎麻家居类创新企业拉动坡耕地水土流失治理步伐

苎麻种植是南方坡耕地十分有效的一项生态经济措施,既能保持水土,又能获取经济收益。过度外贸型的苎麻产品结构,受国际金融危机影响,出口量急剧下降,造成苎麻种植面积直线下降、退出坡耕地用作其他农作物种植后土壤侵蚀加大的不利局面。苎麻产品只有立足国内市场,才能将苎麻市场做大做强。面向家居市场是可选途径之一。2007年以来,苎麻墙布开发的技术工艺研发与孵化已经完成,据此规模生产苎麻墙布产品,将形成南方坡耕地区水土保持生态建设与经济共同发展,企业与农民共同致富的良性循环。     

The puzzle of quality upgrading of Chinese exports from the trade liberalization perspective

Trade liberalization could accelerate the process of quality upgrading through the competition effect. However, that the quality of Chinese exports exhibits an opposite performance pattern is puzzling. The present paper uses a framework based on multiproduct firms to analyse the mechanism of how the product quality of exports is affected by trade liberalization to explain this puzzle. The model includes two major mechanisms: the competition effect and the market effect. There is a huge gap in the influence on the product quality of exports between a decrease in tariff barriers and non‐tariff barriers: firms' product quality increases (decreases) when non‐tariff barriers (tariff barriers) fall. The data of Chinese firms from 2001 to 2011 supports this conclusion. Further research reveals that the influence of trade liberalization on the product quality of exports in China varies among different types of firms.     

International trade of scarce water

Recent analyses of the evolution and structure of trade in virtual water revealed that the number of trade connections and volume of virtual water trade have more than doubled over the past two decades, and that developed countries increasingly import water embodied in goods from the rest of the world to alleviate pressure on domestic water resources. At the same time, as demand continues to increase and climate change threatens to alter hydrological cycles, water scarcity is a growing problem. Does research into virtual water trade need to consider water scarcity and differentiate flows out of water-scarce regions from flows out of water-abundant regions? Previous studies sum and compare virtual water volumes originating in countries experiencing vastly different degrees of water scarcity. We therefore incorporate water scarcity into an assessment of global virtual water flows. We use input–output analysis to include indirect virtual water flows. We find that the structure of global virtual water networks changes significantly after adjusting for water scarcity.     

虚拟水贸易及其影响因素研究

由于水资源的分布不均和大量消耗,水资源短缺成为很多国家和地区经济社会发展的约束。虚拟水贸易作为一种解决水资源短缺的方式被提出,成为水资源研究领域的热点。以农产品的国际贸易为主体的虚拟水国际贸易也不仅仅涉及水资源的平衡问题,还涉及到很多政治、经济等因素。本文从政治、经济、社会、生态四方面对虚拟水贸易的影响因素进行分析,从而对虚拟水贸易展开研究。     

What explains indirect exports of goods and services in Eastern Europe and Central Asia?

This paper investigates the determinants of indirect exporting, using firm-level data for 27 countries in Eastern Europe and Central Asia. Indirect exporting depends on a combination of fixed and variable trade cost factors. We first hypothesize that firms that perceive customs, transportation, crime and legal systems as severe obstacles anticipate higher fixed costs and are more likely to export indirectly. The second hypothesis is that indirect exporting tends to be a temporary strategy. Econometric models are used to test the first hypothesis and transition matrices to test the second. In particular, probit, Heckman-probit and fractional response models are estimated to analyse the determinants of the export mode and the share of indirect exports. The results indicate that the factors that account for the fixed cost of exporting, mainly affect the decision to export indirectly (extensive margin), but some of them also affect, to a lesser extent, the amount exported indirectly (intensive margin). More specifically, factors such as customs and trade restrictions and transportation obstacles affect the extensive margin only, whereas crime affects both margins. Secondly, trade agreement membership mainly affects trade in manufactured goods, while exchange rate volatility affects positively the extensive and intensive margin of indirect exports of services. The results also indicate that firms are more likely to change their status as an indirect exporter than they are to change their status as a direct exporter or a non-exporter, which provides support to the second hypothesis.     

Sustainable development of Shandong peninsula Peninsula urban agglomeration: a scenario analysis based on water shortage and water environment changes

China has experienced a rapid urbanization since late 1970s. The great increase of urban population has resulted in various environmental changes, of which urban water shortage and water environment problems have occurred in most cities, especially in the rapidly developing urban agglomerations in the eastern coastal region. This research, taking Shandong Peninsula Urban Agglomeration (SPUA) as a case study area, analyzes the urbanization expansion in the last decades, discusses the water shortage and water environment changes following the rapid economic development and urbanization such as groundwater sinking in the urban and plain area, sea water and salt-water intrusion in the coastal cities, water pollution overspreading and "water ecosystem degradation, and puts forwards some strategies for sustainability in populous regions with severe water shortage. Some countermeasures for sustainable development of SPUA are put forward, such as modern water resources inter-city networks to regulate water resource between cities, adjusting urbanization policy and urban scale planning to promote the development of small towns and medium sized cities, optimizing urban industry structure by restricting high water consumption enterprises and stimulating the growth of tertiary industry, improving water use efficient to reduce freshwater consumption and wastewater discharge, introducing economic means to water pricing and water management system. and restoring ecological conditions to strengthen the natural water-making capacity.     

UK Trade Performance and the Role of Product Quality, Innovation and Hysteresis: Some Preliminary Results

This paper seeks to explain the apparent contradiction in the UK's manufacturing trade performance over the past two decades: on the one hand, the early 1980s witnessed a substantial contraction in manufacturing employment along with a considerable surge in imports and decline in UK exports; on the other hand, UK trade performance, particularly exports, seems to have improved in the second half of the 1980s and early 1990s. The paper shows that the substantial, but temporary , appreciation of sterling in the early 1980s caused permanent damage to both the UK's trade performance and industrial base; and that the UK's relative investment performance, via its hypothesised impact on product quality, helps to explain the subsequent improvement in UK trade performance since the mid‐1980s.     

Do export and technological specialisation patterns co-evolve in terms of convergence or divergence? Evidence from 19 OECD countries, 1971–1991

Several researchers looking at the development of international export specialisation patterns have shown that there is a weak tendency for OECD countries to exhibit decreased levels of specialisation. This finding is in contrast to findings made by other authors, who found increasing technological specialisation. The first aim of this paper is to investigate whether these contradictory findings are due to a `real world' phenomenon, or whether the explanation is purely technical, by comparing the development of export specialisation to specialisation in terms of US patents, using the same methodology and level of aggregation. The second aim is to analyse the extent to which countries and sectors display stable specialisation patterns over time, also both in terms of exports and in terms of technology. The paper confirms that the OECD countries tend in general to become less specialised in terms of exports. The evidence is less conclusive with regard to technological specialisation, as the results are mixed in the sense that just about half of the countries tend to exhibit increased levels of specialisation, while the other half tend to exhibit lower levels of specialisation. In terms of country and sectoral stability of specialisation patterns, it can be concluded that both trade specialisation and technological specialisation patterns are path-dependent. In comparison, however, trade specialisation patterns are more stable than are technological specialisation patterns.     

Recent trends in trade among developing countries

The paper presents the early results of empirical work on trade among developing countries. The main conclusion is that non-fuel trade among developing countries, excluding capital surplus oil exporters, remained a remarkably stable share of their total trade between 1963 and 1977. This constancy does, however, conceal two interesting opposing trends: The share of manufactures exported to developing countries has been falling sharply, while that of non-fuel primary commodities has been rising, the latter largely because of the demands of the newly industrializing countries. Nevertheless, the dynamism of manufactures has meant that they make up an increasing share of trade among developing countries. Four particular points emerge from the evidence: (i) there is no obvious sign of a bias against trade among developing countries, except whatever effect their own commercial policies may have; (ii) the more inward-looking countries tend to send a higher proportion of their exports to other developing countries and regional integration strengthens this effect; (iii) exports of manufactures to developing countries are much more capital intensive than those to industrialized countries; and (iv) exports to developing country markets may not be the vital first stage for capital goods exports that is sometimes supposed.     

Which sanctions matter? analysis of the EU/russian sanctions of 2014

We use a quasi-natural experiment of reciprocal imposition of trade sanctions by Russia and the EU since 2014. Using UNCTAD/BACI bilateral flows data we take this unique opportunity to analyse both sanctions. In particular, we study the effectiveness of narrow versus broadly defined sanctions, and differences in the effectiveness of sanctions imposed on exports and imports. We show that the Russian sanctions imposed on European and American food imports resulted in about an 8 times stronger decline in trade flows than those imposed by the EU and the US on exports of extraction equipment. These results do not appear to be driven by diversion of trade flows via non-sanctioning countries. Hence the difference in sanctions’ effectiveness can be attributed to the limited retroactivity of Western sanctions, which allowed exemptions for exports made pursuant to contracts made prior to 2014.     

Exports,imports, growth and causality: a study of Slovakia

In this article, we analyse the trade–growth nexus for Slovakia. This country represents a critical case for such research because it is one of the most open economies in the world; by several measures it is the most open economy in the EU, with the most Eurocentric trade, and has maintained one of the best growth performances within the EU over a sustained period of time. In contrast to most contributions to the trade–growth literature, we analyse all six possible causal relationships between Slovakia’s exports, imports and growth, using the technique developed by Toda and Yamamoto (1995), on quarterly data from 1997Q1 to 2014Q4. We find evidence supporting both the export-led-growth hypothesis and the import-led-growth hypothesis. None of the other four relationships was found to be significant.     

Sanitary and phytosanitary measures in Chinese agricultural exports: the role of trade intermediaries

We study the effect of sanitary and phytosanitary (SPS) measures on Chinese agricultural exports and the role of trade intermediaries in this process following China’s accession to the World Trade Organization. While both agricultural exports and SPS regulations have grown, the use of trade intermediaries has declined sharply. We develop a model of heterogeneous producer-level decisions about choice of export mode that is consistent with this trend. In our econometric analysis, we analyse the effects of SPS measures and trade intermediaries on Chinese fruit and vegetable exports using transaction-level customs data. In contrast to much of the literature, we find some evidence of positive relationships among SPS measures, trade intermediaries and exports.