Game Changers in China’s Dam Diplomacy
China is home to some of the world's most prolific dam-builders. From Asia to Africa and Latin America, Chinese companies are believed to be involved in more than 360 dam projects in 74 countries, of which around 250 are designed for hydropower generation.
Chinese investment in these hydropower projects across the developing world has, however, attracted considerable scrutiny. In Southeast Asia, Chinese-financed dam projects have sparked serious social and environmental concerns and, in certain cases, public outrage. Demands for Chinese dam-builders and financiers to observe local laws and regulatory standards are heard with increasing frequency.
But have these demands resulted in any real change?
There is now a more heightened level of understanding in China than ever before that having a ‘social license to operate' is integral to the success of large-scale infrastructure schemes.
Pichamon Yeophantong, Lecturer, UNSW School of Social Sciences
A new study by UNSW researcher, Dr Pichamon Yeophantong, uncovers how local activists opposing the Chinese-financed Myitsone Dam on Myanmar’s Irrawaddy River succeeded in derailing this controversial project, marking a change in China’s broader approach to dam-building in mainland Southeast Asia.
When Myanmar’s former President Thein Sein announced the proposed dam’s suspension in late 2011, this was received with much public fanfare in Myanmar and across the region.
According to Yeophantong, the suspension was lauded as a notable ‘win’ for civil society.
“In China, the news prompted reinvigorated debate among Chinese businesses and policymakers on whether Chinese companies are doing enough with respect to corporate social responsibility (CSR) in their overseas ventures,” said Yeophantong.
Using data from interviews and field research in China and Southeast Asia, Yeophantong identifies three ‘game changers’—local activism, China’s domestic CSR policies and its new regional engagement strategy—that influenced the Myitsone Dam’s development and Chinese attitudes toward the scheme in the aftermath of the suspension.
The study reveals how the public pressure that emerged from intense activism in Myanmar against the Myitsone project coalesced with policy shifts back home in China’s CSR framework and its regional diplomacy to sensitize the Chinese government and China Power Investment (CPI), the main company
behind the dam, to the costs of dam-building. CPI had already invested an estimated US$1.3 billion into the project when it got suspended.
Yeophantong expects that these game changers will continue to influence Chinese approaches to dam-building in the region.
“The Myitsone case is still referred to in Chinese business and policy circles as a ‘wake-up call’ for Chinese companies operating overseas. Although Chinese investors face a steep learning curve, there is now a more heightened level of understanding in China than ever before that having a ‘social license to operate’ is integral to the success of large-scale infrastructure schemes,” said Yeophantong.
Dr Pichamon Yeophantong is Lecturer in International Relations and Development at the UNSW School of Social Sciences. She is a China expert and has published widely on water and resource governance issues in Asia. Her study, titled ‘China’s Dam Diplomacy in the Mekong Region: Three Game Changers’, features as a chapter in Water Governance Dynamics in the Mekong Region.The volume, edited by David J.H. Blake and Lisa Robins, is published as part of the Mekong Program on Water, Environment and Resilience’s (M-POWER) book series on regional water governance.