Virtual water exerts an essential effect on water resources, yet such effect is rarely considered in current studies on water rights allocation in transboundary rivers. Hence, this paper ran a case study on Taihu Lake Basin, collecting data from 2017 to make clear the physical water rights of four regions—Jiangsu Province, Zhejiang Province, Anhui Province, and Shanghai City—in the Basin. After that, the multiregional input–output (MRIO) approach was utilized to measure the trade in value-added (TiVA) transfer and virtual water transfer (VWT) and construct an inequality index of VWT (VWI). Next, water efficiency coefficient was employed to convert the VWT into riparian level. Finally, VWT and VWI were incorporated into the water rights allocation model to form up a water rights allocation scheme for Taihu Lake Basin. Results showed: (1) Jiangsu enjoys the most allocated physical water rights, followed by Zhejiang, and Anhui ranks the lowest; (2) Anhui and Jiangsu are net virtual water exporters (2.259 billion m³ and 1.78 billion m³, respectively), while Zhejiang and Shanghai are net importers (2.344 billion m³ and 1.695 billion m³, respectively); (3) Anhui suffers the most inequality—0.4401—followed by 0.5076 of Jiangsu, while Zhejiang has the most equal environment—0.7012; (4) after the inclusion of virtual water, the quantity of water rights allocation changes, whereas Anhui experiences the largest growth—144 million m³—due to the dual effects from the highest VWT and inequality. In conclusion, the effect of virtual water is indispensable, so VWT and VWI should both be considered in the physical water rights allocation of transboundary rivers.

Water stress in countries within a drainage basin exacerbates the water quantity conflict in transboundary rivers. However, few studies considered the invisible effect of virtual water transfer on water quantity conflict by intensifying water stress. Therefore, this study, with Ili River as the case, collects data on Virtual Water Trade (VWT) from 1990 to 2015, uses water stress index (WSI) to assess water stress values under two scenarios (with or without virtual water transfer), and takes Grey Verhulst Model to predict two scenarios water stress values respectively. Next, based on the Levenberg—Marquardt (LM) Algorithm, this study compares the water quantity conflict intensity of the two scenarios, and further explores the invisible effect of virtual water transfer on the conflicts among transboundary rivers. Results show: (1) During the study period (1990–2015), water stress in China and Kazakhstan along the banks of Ili River increased in general. (2) China was basically a net exporter of virtual water during 1990–1995, and Kazakhstan became a net exporter after 1995. (3) During 2020–2025, water conflict value of Ili River without virtual water transfer is 0.458, while the value rises to 0.622 with virtual water transfer, indicating that virtual water transfer between China and Kazakhstan has an invisible enhancement on the water quantity conflict of Ili River. (4) The intensified water quantity conflict is mainly caused by the more and more serious water stress in Kazakhstan. On such basis, it is more urgent for Kazakhstan to restructure its economy and trade.

Current studies neglect how virtual water transfer (VWT) between countries within a drainage basin affects water stress and then yields an invisible effect on the water quantity conflict in transboundary rivers, which would further make management policies on water quantity conflict less fair and reasonable. Therefore, this study first constructs the Inequality Index of VWT and water stress index (WSI) to assess water stress. Next, different types are set according to the Inequality Index and WSI to analyze management policies, with Ili River as the case. Results show: (1) Within the study period, from 1996, the Inequality Index of VWT between China and Kazakhstan stayed at 0.368 (0.368 < 0.5), indicating a relatively high inequality of VWT between the two countries—China at a disadvantage, while Kazakhstan having the upper hand. (2) According to the remotely sensed data, WSI in the riparian zones of the Ili River rose from 0.288 to 0421 in China, and 0214 to 0.402 in Kazakhstan, showing intermediate scarcity. (3) China and Kazakhstan both fall into Type 2, and Kazakhstan has the advantageous position. Therefore, while allocating the water resources of the Ili River, Kazakhstan should lower its expectation and proactively ask to exchange benefits in other aspects to reverse the outward transfer of its physical water. In addition, the two countries should find suitable ways to go about water rights trading to reduce the possibility of potential water quantity conflict.