Assessing the industrial economic output loss due to water scarcity at the Chinese city level

Water scarcity increasingly constrains economic development in China, yet its economic impacts remain unclear at the city level, particularly when inter-city supply chain linkages are considered. As a major water-intensive sector, industry plays a central role in transmitting water scarcity risk across regions. However, city-level industrial economic losses and their transmission pathways have rarely been quantified within an integrated risk assessment framework. This study applies a multi-regional input-output model to evaluate potential economic output losses of industrial sectors in Chinese cities for 2012, 2015, 2017 and 2022. The framework quantifies water scarcity risk rather than observed losses and traces its propagation through inter-city production networks. Results show that Shanghai, Beijing and Dongying face the highest water scarcity risk in the industrial sector. The production and distribution of electricity power, chemical products and the processing of petroleum sectors dominate risk formation and transmission. Furthermore, this study reveals the risk transmission pathways at the city-sector level, providing scientific evidence for policymakers to create focused water resource management policies.