Role of Virtual Water Within Generalized Trade Framework

The concept of virtual water trade says that a water-scarce economy can import virtual water embodied in commodities from other economies to save domestic physical water for other purposes on the basis of comparative advantage, for example, in Urumqi. In practice, however, it is not always the case, and virtual water can also flow from water-scarce regions to water-rich ones, for example, a huge volume of local water flows out of Xinjiang and into more water-rich economies in virtual senses. This paper aims to investigate these paradoxical cases and finds that virtual water never plays a monodrama but joins in a chorus together with physical trade, virtual energy trade, virtual labor trade, and virtual land trade, and others. These different forms of trade together contribute greatly to an economy, and a term of generalized trade is applied to draw a multiple-perspective portrait of traditional physical trade.