Spatial Heterogeneity in Economic Benefits of Water Use: Sectoral Analysis of Chinese Cities in 2017

Spatial heterogeneity in economic benefits of water use provides crucial evidence for the evaluation of water diversion projects and the spatial equilibrium of water resource allocation. Using city-level data from 2017 on the sectoral water use and value added in 334 Chinese cities, we estimated the economic benefits of water use in the agricultural, industrial, and service sectors using the allocation coefficient method. We then revealed the spatial heterogeneity combining an exploratory spatial data analysis (ESDA) method. For the agricultural sector, the high economic benefit of water use regions are primarily concentrated on both sides of the “Hu Huanyong Line”; regions with high economic benefit of industrial water use are mainly found in the North China Plain, the middle and lower Huanghe River basin, the Yangtze River Delta, the Pearl River Delta, Chongqing and Chengdu, and the economic benefit of service water use is higher in the north than in the south. ESDA provides significant evidence for the analysis of spatial heterogeneity with regard to the economic benefits of water use in China. Based on the fundamental distribution of water resources and the spatial heterogeneity in the economic benefits of water use, potential water diversion areas can be preliminarily identified. The Haihe River Basin in the North China Plain and some areas in the southeast coastal region are potential receiving areas, and the eastern regions of Southwest China with abundant water resources and lower elevations, along with the middle and lower reaches of the Yangtze River are potential source areas. Further research about marginal benefits and water use costs, along with dynamic updates, is required for water resource allocation of China.