China and the Geopolitics of the Mekong River Basin

April 19, 2012

Two decades after the Paris Peace Accord that ended the proxy war in Cambodia, the Mekong Basin has re-emerged as a region of global significance. The rapid infrastructure-led integration of a region some call "Asia's last frontier" has created tensions between and among China and its five southern neighbors-Cambodia, Laos, Myanmar, Thailand and Vietnam. Both expanded regional cooperation as well as increased competition for access to the rich resources of the once war-torn region have created serious environmental degradation while endangering food security and other dimensions of human security, and even regional stability.

China's seemingly insatiable demand for raw materials and tropical commodities has made it a fast-growing market for several Mekong countries and an increasingly important regional investor. Economic integration has been boosted by a multibillion dollar network of all-weather roads, bridges, dams and power lines largely financed by the Asian Development Bank (ADB) that is linking the countries of the Lower Mekong to each other and to China. To date, the ADB's Greater Mekong Subregion (GMS) cooperative development program has primarily benefited large population centers outside the basin proper in China, Thailand and Vietnam. Unfortunately, the same infrastructure that speeds the flow of people and goods to urban centers also facilitates the environmentally unsustainable exploitation of the forests, minerals, water resources and fisheries that are still the primary source of food and livelihoods to millions of the Mekong's poorest inhabitants.

No aspect of China's fast-growing role and influence in the Mekong region is more evident and more problematic than its drive to harness the huge hydroelectric potential of the Upper Mekong through the construction of a massive cascade of eight large- to mega-sized dams on the mainstream of the river in Yunnan Province. The recently completed Xiaowan dam, the fourth in the series, will mainly be used to send electricity to the factories and cities of Guangdong Province, its coastal export manufacturing base some 1,400 kilometers away. China's Yunnan cascade will have enough operational storage capacity to augment the dry season flow at the border with Myanmar and Laos by 40-70 percent, both to maintain maximum electricity output and facilitate navigation on the river downstream as far as northern Laos for boats of up to 500 tons.

China's four completed dams already have caused rapid changes in water levels hundreds of kilometers downstream and notably reduced the flow of vital nutrient-rich sediment that gives the river its immense aquatic and agricultural productivity and sustains the Mekong Delta. This has created friction with China's downstream neighbors, but their governments have been loath to complain. China is a large and growing market for their natural resources and agricultural exports, and Laos and Cambodia are major recipients of Chinese infrastructure development aid.

Meanwhile, China's plan to slightly reduce the flood peak and substantially increase the dry season flow from Yunnan has given new life to a long-shelved scheme for up to 12 hydropower projects-10 on the river's mainstream in Laos and two in Cambodia. All of the proposed Lower Mekong dams are commercial projects that would be built, owned and operated by Thai, Chinese and other foreign companies, mainly under long-term supply contracts to Thailand's state-owned electrical authority.

In contrast with China's unrestrained approach, however, Cambodia, Laos, Thailand and Vietnam are committed to a 1995 treaty for cooperative, sustainable and equitable development of the Lower Mekong under the framework of the intergovernmental Mekong River Commission (MRC). While no government has given up its sovereign rights, they all have committed to a set of procedures for notification, prior consultation and -- ideally -- agreement on mainstream dam projects because of their transboundary impacts. Basin-wide cooperation is limited by the fact that China and Myanmar have accepted only observer status. China thus far has provided only limited data on the operation of its dams and has not shared the results of its own hydrological studies of their downstream impact.

While the construction of environmentally and socioeconomically destructive dams continues uninterrupted on major tributaries in Laos, Vietnam and Cambodia, the construction of dams on the mainstream of the Lower Mekong has met with unexpectedly effective opposition. In December 2011, the government of Laos yielded to opposition from Cambodia, Thailand and Vietnam, and agreed to suspend the construction of a dam across the Mekong mainstream in its northern Xayaburi province, pending further impact studies.

China's plans to sharply increase the dry season flow from Yunnan will force Lower Mekong countries, but especially Laos, which aspires to become the "battery of Southeast Asia," to make irrevocable economic and geopolitical choices. Going ahead with the projects would result in a dam cascade lacking any coordination or positive cooperation, and transboundary tensions among the "winners" and "losers" would undercut regional harmony. Moreover, China would be the only country or entity with the ability to coordinate the operations of the Upper and Lower Mekong cascades.

Even if they decide not to build mainstream dams, the Lower Mekong countries still must cope with changes in the river, especially the loss of dry season riverbed farming and the negative impact on numerous fish species. The only opportunity for partially mitigating these effects will be to persuade China to give these concerns greater priority in operating the dams.

By contrast, the Lower Mekong countries could decide to follow through with studies of the cumulative impact of various combinations of mainstream dams under the leadership of the MRC and with international financial support. Ultimately, decisions would be based on scientifically defensible cost-benefit analysis, but with the possibility of some compromises for the sake of consensus. This approach would strengthen regional cohesion, thereby increasing downstream bargaining power with China on issues such as providing more transparency and operating its dams to minimize damage to the river's natural hydrology.

This article first appeared in World Politics Review. It is the first of a two-part series on China's geopolitical interests in the Mekong River Basin. Part II examines the security challenges to China's efforts toward economic integration of the Mekong River Basin.

Photo Credit: International Rivers, http://www.internationalrivers.org/files/images/Manwan.jpg