Unravelling Chinese industrial structure optimization paths within Regional Comprehensive Economic Partnership considering the virtual trade of water and water pollutants

Massive commodity transactions lead to enormous virtual water and water pollution transfer; this phenomenon will be intensified within the process of Regional Comprehensive Economic Partnership (RCEP) enforcement. This study applied multi-regional input-output and scenario simulation approach to reveal the virtual water elements flow, while exploring the trade structure optimisation roadmap for China. Results unveiled that China was a virtual water net exporter (9.17 billion tons), also the largest importer of water pollutants (N 622456 tons and P 136110 tons) among RCEP countries in 2015. In order to alleviate the water pressure in China, the textiles and other manufacturing industries should be limited, while the service industry is encouraged. Optimal scenario can realize 29.8% water conservation and 8% water pollutants reduction and also achieve a 36.5 million dollars trade volume increase. This research improves trade-off balance between water environment and economy at multi-regional level and accelerates green trade in economic partnerships globally.