A Circular Economy-Oriented Network DEA Model for Evaluating and Improving the Efficiency of Industrial Water Recycling Systems in China

Confronting severe water scarcity challenges, China’s industrial water circularity demands robust efficiency evaluation frameworks. This research pioneers a two-stage network model integrating undesirable outputs and feedback mechanisms to assess 30 provincial systems. The methodology captures interconnected processes where production generates wastewater, which is then treated to yield reusable water fed back into production. Comprehensive efficiency gaps were quantified using weighted optimization, enabling tailored provincial enhancement paths: wastewater volume reduction and reclaimed water augmentation strategies. Results reveal striking regional disparities, with only two regions initially achieving full efficiency while coastal manufacturing hubs exhibited paradoxical inefficiency despite high output. Implementation demonstrated reclaimed water enhancement’s superior efficacy—enabling over half of regions to reach full efficiency—while wastewater reduction alone proved insufficient for most provinces. Crucially, ecologically fragile regions achieved optimal performance through minimal precision interventions. The study establishes that effective water circularity requires coordinated optimization of both production and treatment stages, with region-specific sequencing strategies. This approach delivers policymakers a diagnostic toolkit for spatially differentiated resource transition planning, balancing economic output with environmental sustainability.