In China, the water network project plays a pivotal role in optimizing water resources allocation, enhancing regional water resources carrying capacity, and bolstering high-quality economic development. This study is grounded in the spatial interconnection of water resources, serving as the foundation for constructing a spatial measurement model. Leveraging data from 558 panel samples encompassing 31 provinces (including municipalities and districts) in China between 2003 and 2020, this research unveils the inherent correlation between the establishment of the water network and economic as well as social development. The findings indicate the following: (1) Considering inputs, outputs, and nonconsensual outputs, regional disparities in the SBM (slacks-based measure) value of the water network exist, demonstrating an overall increasing trend annually. In 2020, the nationwide average benefit level of input–output in water network construction reached 0.603. (2) Moran’s I test, predicated on the weight matrix of spatial water transfer information, reveals a spatial positive autocorrelation. All tests pass the significance threshold of 5%, affirming the presence of spatial agglomeration due to project construction, operation, and the interconnectedness of water resources. (3) SDM (spatial Durbin model) regression analysis elucidates that per capita GDP, resource endowment, technological innovation level, consumption index, and average wage significantly influence the growth of water network efficiency. Specifically, per capita GDP and the consumption index exert negative influences. Moreover, aspects such as regional resource endowment, technological innovation level, industrial and agricultural water demand, average wage, and other spatial dependencies exhibit a notable positive spatial spillover effect. (4) The SDM model suggests that per capita GDP growth fails to yield a significant spatial spillover effect on neighboring regions. Instead, it highlights a substantial indirect effect and spatial dependence of government attention among regions. These analyses are instrumental in optimizing the water resources allocation network system and enhancing investment efficacy.

The development of water network projects in China has facilitated the optimization of water resource allocation and improved utilization efficiency, aiding water-scarce regions in alleviating the supply–demand imbalance and promoting socio-economic development. However, the introduction of external water sources has also led to higher water supply costs and rising water prices, posing challenges for coordinating water resource security and economic growth in water receiving areas. Under the water network supply mode, the primary goal of water demand management in these areas is to balance the dual impacts of increasing water prices and the enhanced availability of water resources, while assessing the sustainability of economic growth. This study takes the Henan water receiving area of the Middle Route of the South-to-North Water Diversion Project as a typical case, developing a simultaneous equations model based on the environmental Kuznets curve (EKC) hypothesis to empirically analyze the nonlinear relationship between water prices and economic growth. The coefficients of the weighted average water price, along with its square and cube terms, are statistically significant and show an ‘N’-shaped curve in relation to overall economic growth. The relationship between industrial water price and industrial per capita GDP growth is currently located at the second upward phase of the ‘N’-shaped curve. Overall, economic growth in the water receiving area improves water price affordability, and the early implementation of industrial water price increases can drive structural transformation, promoting water-saving and efficient industrial water use. This study provides robust empirical evidence for water transfer decision-making and the optimization of the water pricing mechanism in water receiving areas.