Although the relevant Chinese government ministries have produced rules and guidelines governing both the construction of dams in China and the operations of Chinese companies abroad, international expansion is rushing ahead of regulatory adaptation. This has led to adverse environmental and social outcomes and, in some cases, the flagrant abuse of human rights. The many damaging effects of improperly implemented dam projects have been well-documented.

An opportunity exists for Chinese companies to become leaders in best-practice hydropower implementation in Asia, as the countries in which they operate frequently lack even the flawed regulatory mechanisms which guide the industry within China. Chinese companies have also accrued a wealth of experience in dam management over decades of construction.

For now, Chinese hydro companies (many state-owned) continue to operate in environmentally and socially harmful ways. This is particularly the case when profiteering in countries like Burma, where most loan providers and foreign institutions shy away from involvement with an almost universally discredited regime.

In countries that border China, dam construction can take on an added strategic and geopolitical dimension. Firstly, hydropower deals will often lead to energy import options for China. In Burma, for example, the state-owned China Power Investment Corporation has partnered with the Burmese military junta to build the Myitsone Dam. The project, to be built on the Irrawaddy just below the confluence of its two source rivers, will flood a large area of forest rich in biodiversity and force the relocation of 45-60 villages. The 3,600MW of anticipated annual electricity production at Myitsone will be sold back to Yunnan, lining the pockets of the junta with an estimated US$500m a year. The deal has provoked harsh criticism from international NGOs and representative bodies for the Kachin people, who populate the affected villages.

Secondly, Chinese dam construction in continental Asia may trigger tensions as transboundary river systems are altered in unpredictable ways. For example, the proliferation of large dams across Southeast Asia, where many long rivers cut across numerous international borders, could lead to serious concerns over water resource management. Chinese leadership will be critical in managing those concerns: 1) the headwaters of rivers such as the Mekong and Salween are located in China; 2) China is the political heavyweight within the region; 3) many of the dams are Chinese-built or funded; and 4) China possesses the greatest quantum of knowledge and experience in relation to large dam construction and management.

Managing the potential implications flowing from aggressive Chinese pursuit of construction deals and energy sources on its neighbours’ major waterways will present a challenge to the governments concerned. This challenge can only become more significant as water politics emerges as a critical pressure point across Asia.

Until now, restricted consultative and deliberative fora have encouraged unilateralism in water resource management. Such strategies come at a cost to both the overall health of river systems and water security of individual user states. This year’s drought in southwest China highlighted the real possibility for tensions incited by dam management. The countries of the Mekong River Commission (Cambodia, Lao PDR, Thailand and Viet Nam) have accused China of retaining excessive water in up to 11 dams on its stretch of the Mekong, causing water levels downstream to fall to record lows. Though agreeing to provide data on reservoir levels, China has essentially responded that it requires the water to deal with the drought.

With stresses on Asian water resources certain to worsen over coming decades, immediate action needs to be taken to ensure future crises can be foreseen, mitigated and inclusively managed. China is the logical leader of such action. Improvements in its environmental and social track record in dam construction will help to assure its neighbours that China can be the regional leader needed to tackle the rising challenge of water management in continental Asia. Some progress is evident in the recently published internal policies of China Exim Bank and Sinohydro but whether China will ever genuinely seek to pursue a cooperative multilateral approach to regional rivers management remains to be seen.

Huw Pohlner is a project officer at the Crawford School of Economics and Government. He graduated with a Bachelor of Philosophy (Honours) in Asian Studies from the ANU in 2009. He is a co-founder and vice-president of the Australia-China Youth Association.

 

This article is a finalist in the recent EAF Emerging Scholars competition.