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An analysis of China’s investment in the hydropower sector in the Greater Mekong Sub-Region

Abstract

The Mekong River’s natural resources offer large benefits to its populations, but it also attracts the interest of foreign investors. Recently, Chinese firms, banks and government bodies have increasingly invested in large hydropower projects in the Greater Mekong Sub-Region. Due to China’s rapid economic growth, its rapid industrialisation and its limited domestic natural resources, the Chinese government has issued the ‘Going Out Strategy’ which promotes investments in overseas natural resources like water and energy resources. In search for climate-friendly low-carbon energy, cheap electricity and access to a growing market, Chinese institutions turn to Southeast Asia where Chinese institutions are currently involved in more than 50 on-going large hydropower projects as contractors, investors, regulators and financiers. These Chinese institutions have influence on environmental and social practices as well as on diplomatic and trade relations in the host countries. Currently, there are major gaps in understanding who is engaged, why, how and with what impacts. This paper therefore aims to assess the motives, actors, beneficiaries and the direct and indirect impacts of China’s investment in large hydropower projects in the Greater Mekong Sub-Region. The authors use the ‘Rising Powers Framework’ to assess these issues, which is an adapted version of the Asian Drivers Framework.

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Notes

  1. 1.

    This raises further research needs. Hence, the lead author will be leading an ESRC-funded comparative study of Chinese hydropower dams in Africa and Asia (grant reference: ES/J01320X/1) from late 2012 onwards. Fieldwork will be carried out around dam sites in Cambodia, Malaysia, Ghana and Nigeria in cooperation with local researchers, Chinese researchers and International Rivers.

  2. 2.

    This estimated figure for 2010 has to be compared with the figures provided by the International Energy Agency (IEA), which indicates that only 17 % of China’s total electricity supply came from hydropower in 2008 (IEA 2010). There are often discrepancies between energy planning and realisation in relation to these energy statistics. In some cases, the Chinese and the IEA’s data differ to a certain degree.

  3. 3.

    This figure for 2009 has to be compared with the figures provided by Chang et al. (2009), which indicate that about 28 % of China’s total electricity supply is expected to come from hydropower in 2010 (IEA 2010). There are often discrepancies between energy planning and realisation in relation to these energy statistics. In some cases, the Chinese and the IEA’s data differ to a certain degree.

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Acknowledgments

The authors would like to thank the UK’s Economics and Social Research Council for funding this work under the Rising Powers China Network (Ref: RES-075-25-0019). The authors are grateful to the participants of three workshops and for the fruitful discussions and presentations produced. Special thanks to Raphael Kaplinksy, Hubert Schmitz, John Humphrey, Dirk Messner and their colleagues for developing the Asian Drivers Framework which was an inspiration for this work. We would like to thank Peter Bosshard and Grace Mang from International Rivers for kindly providing access to their extensive database on Chinese dams.

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Correspondence to Frauke Urban.

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Urban, F., Nordensvärd, J., Khatri, D. et al. An analysis of China’s investment in the hydropower sector in the Greater Mekong Sub-Region. Environ Dev Sustain 15, 301–324 (2013). https://doi.org/10.1007/s10668-012-9415-z

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Keywords

  • China
  • Mekong
  • Hydropower
  • Natural resources
  • Investments
  • Dams