Abstract: Water scarcity has become as a major bottleneck for the development of arid regions in China.In particular,the contradiction between water urbanization and water scarcity has raised a lot of concerns in arid region.Virtual water,defined as the water consumption during the economic activities when producing goods and providing services,provides a new perspective for alleviating regional water scarcity.Most previous virtual water studies focused on the virtual water trade among different regions.However,less studies analyzed the virtual water transfers and linkages among different economic sectors.Under the background of “water caps on production”,it is necessary to study the water transfers and the resultant linkages in economic sectors in the form of virtual water flow.Combined with backward and forward linkages in economic analysis,in this study an environmental input-output method was used to analyze virtual water transfers and linkages among economic sectors in terms of water consumption.Both blue water (surface water and groundwater) and green water (rain water) consumptions were considered as the physical water input into the economic sectors.This physical water was then converted to virtual water and redistributed in the economic system.A case study was carried out in an arid region consisting of Ganzhou District and Linze and Gaotai counties (GLG) in the Heihe River Basin,China.The Heihe River Basin is the second largest inland river basin in China.The GLG region is the main consumer of water resources,accounting for over 90% of total water consumption in the Heihe River Basin.The results showed that total direct blue water consumption in 2012 was 5.96×10⁸ m³.About 57% of the total direct blue water consumption for primary sector was transferred into secondary sector and tertiary sector.While only 19.5% and 3% of that for secondary sector and tertiary sector were transferred into other sectors,respectively.The total direct green water consumption was 1.29×10⁸ m³,and about 57% of that was transferred into other sectors.This results also explained why agriculture had such high blue water consumption,accounting for 97% of total in GLG.This is because the virtual water transfer increased the virtual water demand of both secondary and tertiary sectors,as a result,the water consumption of primary sector was driven by both secondary and tertiary sectors.The combination of virtual water transfer and virtual water trade analysis showed that the volumes of 2.66×10⁸ m³ of blue virtual water and of 0.59×10⁸ m³ of green virtual water were transferred from primary sector to secondary and tertiary sectors,and then exported to the regions outside GLG.This volume of virtual water accounted for 80.6% of virtual water transferred out from primary sector.These results manifested that most of virtual water transfer from primary sector was used for the production of exported goods and services.The previous Backward Linkage and Forward Linkage Analysis were adapted in this study to reflect the virtual water transfer impact,so the Backward Linkage was further decomposed as the sum of Backward Transfer Linkage and Internal Redistribution,while the Forward Linkage was further decomposed as the sum of Forward Transfer Linkage and Internal Redistribution.The results showed that “Agricultural” had the single largest Forward Transfer Linkage among 40 sectors considered,while“Other Manufacturing”,“Food and Tobacco Processing”,“Transport and Communications” and “Hotel and Restaurant” were the sectors with the largest Backward Linkage.We suggested the linkage among the sectors above with agricultural sector should be decoupled to avoid the expansion of agricultural water consumption.This can be achieved through the compensation from the upstream sectors which used the agricultural products as raw materials.Finally,it was concluded that the considered virtual water transfers and linkages among sectors can support the regional decision-making in industrial restructuring and water resources management,and is an effective support to the fulfillment of “water caps on production”.

Key words: virtual water, inter-sectoral relationship, quantification method, backward transfer, forward transfer, Heihe River Basin