Industrial Structure Upgrading and Regional Water Use Intensity

Research on the Driving Effect of Time Dimension Difference

Jiahao Li

, Tao Sun

and Shengzhe Zhang

Business School, Hohai University, Changzhou, 213022, China

Keywords: Water Resources, Industrial Structure Upgrading, Time Dimension, Water Intensity, Yangtze River Economic

Belt.

Abstract: Decomposing the influence of regional water use intensity into industrialization effect, industrial structure

upgrading effect, tertiary industry water-saving technology effect, and domestic water extraction effect from

the time dimension and constructing the LMDI decomposition expansion model of regional water use

intensity time difference. Taking the Yangtze River Economic Belt as an example, the driving channels and

internal influence mechanism of industrial structure upgrading on the time dimension difference of water use

intensity are deeply explored in this article. The study shows that the upgrading of industrial structure is an

important factor that inhibits the water use intensity of the Yangtze River Economic Belt from 2000 to 2020,

but its driving effect has changed from negative to positive from 2012 to 2019 to promote the growth of water

use intensity. It is suggested that the urban agglomerations along the economic belt should strengthen policy

support and scientific management, achieve scientific and technological innovation, and vigorously develop

the high-quality water-saving tertiary industry to exert the inhibitory effect of the upgrading of industrial

structure on water use intensity.

1 INTRODUCTION

China's economy is in an important transition period

of rapid development and high-quality development.

The contradiction between water resources allocation

and regional economic development needs has

become a major strategic issue facing the people's

livelihood (E, 2020). In China’s “ 13th Five-Year

Plan ” action plan of dual control of the total amount

and intensity of water resources consumption, it is

pointed out that we should adhere to the priority of

water-saving and systematic governance, “ determine

the demand with water ” and “ adapt to water ”,

control the total amount and intensity of water

resources consumption, comprehensively improve

the utilization efficiency and benefit of water

resources endowment, and help economic growth and

industrial structure transformation and upgrading.

The upgrading of the industrial structure reflects

the change in the proportion of the output value of the

tertiary industry and the output value of the secondary

https://orcid.org/0000-0003-1965-3688

https://orcid.org/0000-0002-1322-4113

https://orcid.org/0000-0001-6517-9150

industry and is a key indicator to measure the level of

servitization in the industrial structure. According to

the data of the National Bureau of Statistics, China’s

economic structure has a significant trend of

upgrading. The proportion of the tertiary industry in

the total output value has risen from 39.88 % in 2000

to 42.73 % in 2020. It is expected that there is still an

upward trend. The output value of the tertiary

industry continues to increase, the contribution rate of

the primary industry is basically stable, the ratio of

the output value of the tertiary industry to the output

value of the secondary industry is still increasing, the

contribution rate of the tertiary industry to social and

economic growth is increasing. To further promote

the development of a water-saving society, it is

important to promote the upgrading of industrial

structure and service transformation, improve the

proportion of service industry in the tertiary industry,

and develop a high-quality tertiary industry. Zhang

Li, J., Sun, T. and Zhang, S.

Industrial Structure Upgrading and Regional Water Use Intensity Research on the Driving Effect of Time Dimension Difference.

DOI: 10.5220/0011171300003440

In Proceedings of the International Conference on Big Data Economy and Digital Management (BDEDM 2022), pages 211-217

ISBN: 978-989-758-593-7

211

Yu (Zhang, 2020) uses the ratio of tertiary industry

output value to secondary industry output value to

calculate the index of the advanced stage of industry

structure, reflecting the development trend of regional

economic structure. For the operability of the model

decomposition, this paper also uses the ratio of the

output value of the tertiary and secondary industries

to measure the index of the advanced stage of industry

structure.

2 LITERATURE REVIEW

The existing achievements in China and abroad

mainly focus on the following aspects. ① The time-

dimensional exponential decomposition method. By

using the LMDI-I-Model1 model to decompose the

various effects of the total amount of water resources

utilization in the time dimension, and explore the

influence degree and mechanism of different

economic effects on water resources endowment

(Yao, 2019). ② Multi-method correlation

calculation. By using various deviation coefficients,

combined with the coordination index, the correlation

matching relationship between industrial structure

and water resources utilization is calculated. Most of

the existing studies have studied the influence of

water-saving technology, population size, industrial

structure, and income on the total amount of water use

in the time dimension, and found that the industrial

structure effect has a significant inhibitory effect on

the increase of total water use. Compared with the

total water consumption research, the research on

water intensity is relatively less. Lv Lianghua et al

(Lv, 2021) used the total amount of residential water

consumption index to reflect the water consumption

intensity. Zeng et al (Zeng, 2020) took the water

consumption intensity as the decomposition effect of

the total amount of water consumption and

constructed the LMDI expansion model to indirectly

study the influencing factors of water consumption

intensity. There were few articles directly using the

LMDI model to decompose the water consumption

intensity. Based on the previous studies, this paper

made innovations from this perspective.

Given the high-level trend of China's economic

transformation and the high-level form of industrial

structure, this paper decomposes the industrial

structure effect into industrialization effect, industrial

structure upgrading effect, tertiary industry water-

saving technology effect and domestic water

extraction effect, and the driving effect of industrial

structure on the temporal difference of water intensity

in the Yangtze River Economic Belt is analyzed in

depth. With the help of LMDI-I-Model1, this paper

constructs the LMDI decomposition and expansion

model of the time dimension of regional water use

intensity and focuses on the driving channels and

internal influencing mechanisms of the industrial

structure, especially the upgrading effect of industrial

structure, on the time dimension difference of water

use intensity. This paper uses the relevant data of the

Yangtze River Economic Belt as an example for

analysis.

3 RESEARCH METHODS

3.1 Calculation of Time-dimensional

Driving Effect

Referring to LMDI-I-Model1, considering various

factors affecting the time-dimensional change of

water use intensity in the Yangtze River Economic

Belt, the LMDI decomposition and expansion model

of time-dimensional difference of water use intensity

is constructed, and the annual and cumulative effects

of industrial structure upgrading on water use

intensity are mainly studied. At the same time, the

difference in the intra-industry contribution rate is

calculated. The variation of water intensity

t-1, t

tot

GDP

from period t–1 to period t is decomposed

into:

t1,t t t-1

tot

t1,t t1,t t1,t t1,t

SG TS WG WT

tt t t

t-1 t-1 t-1 t-1

=++

++ +

iii i

WWW

GDP GDP GDP

WWW W

GDP GDP GDP GDP

SG TS WG WT

ln ln ln ln

SG TS WG WT

ωωω ω

−

−−− −

ΔΔ−Δ

ΔΔΔ+Δ

    

    

    

 

(1)

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212

Among them, the weight is

tt-1

GDP GDP







t t-1 t t-1 t t-1

ii i i i i

ttt-1

iii

WW W W W W

ln ln

GDP GDP GDP GDP GDP GDP

WWW

GDP GDP GDP



 

−−≠



 



 







(2)

GDP

and

t-1

GDP

are the water intensity of the i

industry in the t-1 and t period respectively;

represents the ratio of regional secondary industry

output to GDP in period t, and

t-1,t

GDP

is the

industrialization effect;

represents the ratio of the

tertiary industry output to the secondary industry

output in period t, and

t-1,t

GDP

is industrial structure

upgrading effect;

represents the ratio of water

consumption of the tertiary industry to the output

value of the tertiary industry in period t, and

t-1,t

GDP

is the tertiary industry water-saving

technology effect;

represents the ratio of total

regional water consumption to tertiary industry water

consumption in period t, and

t-1,t

GDP

is the

domestic water extraction effect.

4 RESEARCH METHODS

4.1 Data Description

The Yangtze River Economic Belt is an important

part of China’s economy, which plays an important

role in promoting the high-quality development of

China’s economy and the transformation and

upgrading of economic structure. At the same time,

the economy of the economic belt is based on water,

and its high-quality development is inseparably

linked to the rational allocation and utilization of

regional water resources. The Yangtze River

Economic Belt covers Shanghai, Jiangsu, Zhejiang,

and other 11 provinces and cities, with 21.4 % of the

country's land area accommodating more than 40 %

of the population, contributing more than 40 % of

GDP. The data of total water consumption and the

total industrial output value of each province and city

in the Yangtze River Economic Belt from 2000 to

2020 are taken from China Statistical Yearbook,

statistical yearbooks of each province and city, and

China Water Resources Bulletin. The total water

consumption is based on the statistics of water

consumption caliber. The total industrial output value

data are all based on the 2000 price as the constant

price (Zhang 2020).

4.2 Driving Effect Analysis of Time

Dimension Difference of Water

Intensity in Yangtze River

Economic Belt

The industrial effect, industrial structure upgrading

effect, tertiary industry water-saving technology

effect, and domestic water extraction effect of water

intensity change in the economic belt from 2000 to

2020 are shown in table Ⅰ, and the sum of each effect

in the same year is recorded as TOT.

Table 1: Decomposition of total water consumption changes in the Yangtze River Economic Belt from 2000 to 2020.

Year interval SG TS WG WT TOT

2000～2001 20.08 5.19 -96.40 -88.73 -159.86

2001～2002 39.59 -27.50 -163.03 -109.52 -260.45

2002～2003 69.96 -85.39 -272.85 -66.17 -354.46

2003～2004

53.05 -71.46 -165.06 74.19 -109.27

Industrial Structure Upgrading and Regional Water Use Intensity Research on the Driving Effect of Time Dimension Difference

213

2004～2005

35.33 -25.51 -203.26 -47.39 -240.83

2005～2006

44.80 -44.86 -243.89 4.19 -239.76

2006～2007

33.50 -18.45 -264.41 -52.58 -301.94

2007～2008 18.39 -5.04 -217.31 -22.75 -226.71

2008～2009 18.67 -6.60 -203.64 -37.09 -228.66

2009～2010 74.22 -129.44 -183.18 -61.29 -299.69

2010～2011

46.01 -73.85 -230.46 2.58 -255.72

2011～2012

19.10 -20.43 -374.25 101.18 -274.40

2012～2013

6.28 9.34 -152.06 -70.21 -206.65

2013～2014 -0.78 18.86 -175.33 -108.90 -266.14

2014～2015 -22.98 69.69 -119.48 -119.99 -192.75

2015～2016 -23.96 70.49 -153.57 -110.23 -217.27

2016～2017

-13.90 45.09 -173.49 -25.89 -168.19

2017～2018

-18.03 51.93 -135.52 -82.18 -183.80

2018～2019

-6.28 25.00 -162.69 -27.89 -171.87

2019～2020 0.54 -3.04 -110.83 -135.32 -248.65

Integrated value 393.60 -215.98 -3800.71 -983.98 -4607.07

(1) From the data in the table, it can be seen that

from 2000 to 2020, the industrial structure upgrading

effect is an important influencing factor of water use

intensity, which plays an inhibitory role in the

increase of water use intensity in the Yangtze River

Economic Belt, and the cumulative effect value is -

215.98 billion cubic meters / billion. Among them,

from 2000 to 2012, the cumulative utility value of

industrial structure upgrading is -503.34 billion cubic

meters / billion. Since 2001, the industrial structure

upgrading has been playing an inhibitory role in the

increase of water use intensity in the economic belt.

From 2013 to 2019, The driving mechanism of

industrial structure upgrading for water use intensity

in the economic belt has changed from inhibition to

promotion. After 2016, its ability to promote the

increase of water use intensity in the Yangtze River

Economic Belt has been weakened, and it has turned

to inhibition in 2020.

(2) Tertiary industry water-saving technology

effect and domestic water extraction effect focus on

the internal relationship between tertiary industry

water use and the increase or decrease of water

intensity. From 2000 to 2020, the cumulative utility

value of the tertiary industry water-saving technology

effect is -3800.71 billion cubic meters / billion, which

is 17.60 times the total utility of the industrial

structure upgrading effect. The cumulative utility

value of the domestic water extraction effect is -

983.98 billion cubic meters / billion, which is 4.56

times the total utility of the industrial structure

upgrading effect. The utility values of the two are

more than the industrial structure upgrading effect,

and the inhibitory effect on the water intensity is more

obvious. It can be seen that optimizing the industrial

and industrial water use structure, adhering to the

water control strategy of “saving water first”,

increasing the proportion of the output value of the

tertiary industry in the total output value, and the

proportion of the water consumption of the tertiary

industry in the total water consumption is more

conducive to inhibiting the increase of water use

intensity.

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Figure 1: Cumulative effect of water intensity change in economic belt from 2000 to 2020.

Figure 2: The differences of industrial structure upgrading within the economic belt from 2000 to 2020.

(3) The industrialization effect reflects the

industrial development and industrialization level of

the Yangtze River Economic Belt, as well as the

demand of the secondary industry for water

resources, which plays a catalytic role in increasing

the water consumption intensity of the economic belt.

From 2000 to 2020, the total utility of

industrialization effect is 393.60 billion cubic meters

/ billion. The industrialization effect value from 2000

to 2013 is positive, which drives the increase of water

intensity. From 2014 to 2019, the industrialization

effect value is negative, which inhibits the increase of

water intensity. In 2020, the industrialization effect

turns to promote the increase of water intensity. The

use of water resources is an important issue in the

process of industrialization. Reasonable distribution

of industrial structure can weaken the driving effect

of industrialization on the increase of water use

intensity in the economic belt to a certain extent.

However, compared with the utility values of

industrial structure upgrading effect, tertiary industry

water-saving technology effect, and domestic water

extraction effect, it is found that only focusing on

industrial structure and relying on industrial structure

-5 000

-4 000

-3 000

-2 000

-1 000

1 000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Cumulative effect

（billion cubic meters / billion yuan）

Year

industrialization effect

industrial structure upgrading effect

tertiary industry water-saving technology effect

domestic water extraction effect

total effect

-150

-100

-50

100

Effect

（billion cubic meters / billion yuan）

Year interval

Tertiary Industry Secondary Industry Primary Industry

Industrial Structure Upgrading and Regional Water Use Intensity Research on the Driving Effect of Time Dimension Difference

215

adjustment to regulate water use intensity has great

limitations.

(4) Studying the effect of industrial structure

upgrading within the industry, as shown in Figure 3,

2012 is a significant node. From 2000 to 2012, the

cumulative contribution values of the output value of

the first, second, and third industries to the upgrading

effect of industrial structure is -276.16 billion cubic

meters / billion, -161.68 billion cubic meters / billion,

and -655.50 billion cubic meters / billion respectively,

which played an inhibitory role; from 2012 to 2019,

the cumulative contribution value of the output value

of the first, second and third industries to the

upgrading effect of the industrial structure was

154.74 billion cubic meters / billion, 92.25 billion

cubic meters / billion and 43.42 billion cubic meters /

billion respectively, which played a promoting role;

since 2019, it has turned to inhibition. With the rising

contribution rate of the tertiary industry, the utility

value of industrial structure upgrading has been

effectively increased, and the water intensity of the

economic belt has been inhibited from 2000 to 2012.

Since 2012, the state has implemented the most

stringent water resources management system,

strengthened the red line management of water

resources development and utilization control, and

strictly implemented the total amount of water

control. The use of regional water resources has been

strictly planned and managed, and the construction of

a water-saving society has been comprehensively

promoted, which effectively improves the water use

efficiency of the three major industries. Therefore,

while focusing on the industrial structure, we should

pay more attention to the optimization and upgrading

of the industry itself (Zhang 2020). Combined with

the driving mechanism of the water-saving

technology effect of the tertiary industry and the

extraction effect of domestic water on water intensity,

we should improve the internal proportion of the

tertiary industry and develop a more water-saving and

high-quality tertiary industry to inhibit the increase of

water intensity in the Yangtze River Economic Belt.

5 CONCLUSIONS AND POLICY

RECOMMENDATIONS

5.1 Conclusion

In this paper, the LMDI decomposition expansion

model of the time dimension difference of water

intensity is constructed to explore the specific

mechanism affecting the internal water intensity of

the Yangtze River Economic Belt. The effect of water

intensity is divided into industrial effect, industrial

structure upgrading effect, tertiary industry water-

saving technology effect, and domestic water

extraction effect. Through data integration and

empirical analysis, it is found that the upgrading of

industrial structure is an important restraining factor

for water use intensity from 2000 to 2020, but its

driving effect changed from negative to positive in

2012-2019 promoting the growth of water use

intensity. In terms of the other three effects, the

tertiary industry water-saving technology effect and

domestic water extraction effect are the primary and

secondary factors that inhibit the growth of water use

intensity in each province and city of the economic

belt, while the industrialization effect generally

promotes the increase of water use intensity.

5.2 Policy Recommendations

5.2.1 Optimizing the Inter-Industry

Structure and Developing a

Higher-quality Tertiary Industry

Provinces and cities should pay attention to the

relationship between the upgrading of industrial

structure and the water use intensity, adhere to the

priority of water-saving strategy (Ma 2014), “

determine the demand with water ” and “ adjust to

water ”, continuously increase the proportion of

industries and services which have high water use

efficiency, continuously improve the industrial

quality and the intensity of knowledge economy of

the tertiary industry in each province and city, and

vigorously support the development of water-saving

industries, so as to achieve effective control of water

use intensity.

5.2.2 Focus on Technology and Promote the

Continuous Development of a

Water-saving Society

Strengthen the strength of science and technology,

strengthen the foundation of science and technology,

strengthen the implementation of policies such as the

national water-saving action plan, improve the

process flow, vigorously develop water-saving

technology, optimize the water use capacity of high

water consumption industries such as steel and

petrochemical, and cultivate water-saving

enterprises. Speed up the transformation of

theoretical results to the actual, promote the

production and industrialization of water-saving

technology, and build a water-saving society.

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216

5.2.3 Strengthening the Effective Guidance

and Scientific Management of the

Government

The governments along the Yangtze River Economic

Belt should make differentiated policies according to

their different natural conditions and different

economic development levels. Optimize the pricing

mechanism and use mechanism of water resources,

formulate incentive mechanism and punishment

mechanism of water use in enterprises, and promote

the recycling and sustainable development of water

resources utilization.

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