The impacts of technological progress and industrial structure distortion on water use intensity in China

Abstract

Based on the employment and output data of China's three industries, this paper measures the industrial structure distortion index of each province in China from 2000 to 2020, and uses a spatial panel model to examine the impact of industrial structure distortion on water intensity. The results show that China's industrial structure distortion index decreases from 0.4046 in 2000 to 0.2042 in 2020, and the industrial structure distortion index is 0.1247 in the east, 0.2139 in the center, and 0.2767 in the west. The regression of the Spatial Durbin Model shows that the indirect effect and total effect of industrial structure distortion both significantly increase the water use intensity, and the influence coefficients are 0.1712 and 0.1822, respectively. For other variables, water resource endowment significantly increases water intensity in the region, with an effect coefficient of 0.0100, and its indirect and total effects are both significantly negative, at −0.0465 and −0.0366, respectively. Foreign trade significantly inhibits water intensity in the region, with a degree of inhibition of −0.0164, and its indirect and total effects are not significant; and increasing Foreign Direct Investment increases water intensity in other regions and in general. The coefficients are 1.3170 and 1.2477, respectively; research and development input has no significant effect on water intensity. Therefore, China should eliminate distortions in its industrial structure, break the urban-rural dichotomy in labor mobility, improve the efficiency of the application of innovative technologies, and enhance the awareness of water crisis and water conservation and protection of the whole society.