The Relationship between Water Consumption and Economic Growth at the National, Regional, and Provincial Levels in China

Balancing economic growth with water consumption is essential for sustainable development. Water scarcity caused by vigorous economic expansion can be alleviated with balance. This paper employs the reduced-form model, Tapio decoupling model, and the logarithmic mean Divisia index (LMDI) model to investigate the relationship between water consumption and economic growth in China as a whole, as well as separately at its 31 provinces and eight economic regions from 2003 to 2019. This article not only qualitatively depicts the environmental Kuznets curve (EKC) of water use but also quantitatively analyzes its formation by exploring how it decouples from economic development and calculating the driving factors. The results confirmed the existence of an inverted-U EKC in water use at the national level and in seven economic regions. From 2003 to 2019, the decoupling index of China and seven economic regions showed a decreasing trend, indicating that economic development is becoming less dependent on water resources. For its driving influencing factors, compared with that of the population and structural effects, the cumulative absolute value of water-use efficiency and economic effects is larger; that is to say, the water-use efficiency and economic effects are the main driving factors for water use, and the population and structural effects are the auxiliary influencing factors. Moreover, the water efficiency measures and industrial structure reform have contributed to the decrease in the domestic water consumption, and economic development and population expansion have contributed to an increase in the water use. Based on the aforementioned findings, policy insights are proposed to facilitate government management and provide a theoretical reference for other developing countries.