Resource grabbing or win-win? Evidence from the South-to-North Water Diversion project

Due to the uneven spatial distribution of water resources between northern and southern China, cross-regional water resource management has emerged as a major challenge to achieving sustainable development. The South-to-North Water Diversion (SNWD) project, as the largest inter-basin water transfer initiative in China, aims to optimize water resource allocation. However, the specific impact of the project on regional coordinated development capacities (RCDC) in both the water source and receiving areas remains unclear. RCDC refers to a region’s capacity to achieve balanced development across economic growth, social advancement, and ecological sustainability. This study investigates the mechanisms through which the SNWD project influences RCDC, focusing on water constraint alleviation in water receiving areas and industrial structure upgrading in water source areas. We assess the impact of the SNWD project on RCDC in both the water source and receiving areas using city-level data. Our findings are as follows: (1) The project is associated with improvements in regional coordinated development in both water-receiving and water source areas, with effects primarily driven by economic development. (2) In the water source areas, the positive impact of the project on RCDC is primarily attributed to the alleviation of water resource constraints. (3) In the water receiving areas, the enhancement of RCDC is driven by qualitative industrial upgrading.