My report to the US-China Economic and Security Review Committee: China at the Tipping Point

Grace Mang

Last week, I sat in Washington in a Senate Hearing Room to give a testimony on the grim situation facing China's rivers. Alongside Elizabeth Economy - a Senior Fellow at the Council on Foreign Relations and Jennifer Turner - Director of the Woodrow Wilson Center's China Environment Forum, we laid out the frightening and significant water challenges that China is facing. Unlike many at the US-China Economic and Security Commission hearing, I left feeling optimistic and inspired, which begged me to ponder what is the basis of my optimism? Do I just have a bad case of blind faith?

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Doom and Gloom

Before opening my Pandora's box of optimism, it's worth briefly outlining what exactly is the grim situation that China faces.

Within China, demand for water from agriculture, industry and cities has and is expected to continue to grow. Such growth coupled with a likely decrease in water availability under climate change means that China faces an unenviable if not impossible situation of dwindling supplies and increasing demand for water.

China's dam-building spree indicates a preference from China's leaders to build their way to water security. The Commission heard about the soon to be completed South-North Water Transfer Project, which will pipe water from China's four central rivers to meet agricultural and energy production needs in northern China. Yet its unlikely that the water to be supplied will be enough to meet the needs of the thirsty north. Under the Chinese government's 12th Five Year Plan, China's rivers will face further threats as the government attempts to add the equivalent of one Three Gorges Dam to China's hydroelectric dam inventory each year for the next five years.

China's Water Resources are at a Tipping Point

All three of us lamented that China has an arsenal of underutilized water policy tools. Urban water pricing reforms, better enforcement of water pollution laws and stronger environmental planning laws are all reasonable and effective ways of solving the equation of reduced water availability, increased demand and declining river health. However, at this stage all panel members agreed that the Chinese government is still sending mixed signals on how it intends to respond to its water resource management challenges.

I also told the Commission that Chinese companies and banks are leading the charge in large dam projects across Latin American, Asian and African rivers, often without the requisite due diligence of the environmental, economic and social impacts. Chinese banks and dam builders are associated with no less than 300 dam projects in 66 countries. Chinese dam builders are most active in countries that have weak environmental and social protections such as Burma and Laos in Southeast Asia and Sudan and Ethiopia in Africa. And until recently, no Chinese dam builders had committed to observing international best practice in environmental and social safeguards.

I'm Optimistic for Three Reasons

Head in the sand?
Head in the sand?

I know what you're thinking - with all this said, how is it that I have any optimism? After much thought, procrastination and too much time in self-reflection mode, I came up with three reasons.

First, International Rivers does not view China as a black box. A colleague recently told me that the biggest challenge for US foreign policy makers is just to know what is going on in China. In our area of expertise there are a diverse range of actors involved in Chinese overseas dam building: government departments, research institutions, companies and NGOs, as well as a multitude of laws and bureaucratic processes. What may appear as a maze to others is only a puzzle to me - a puzzle that International Rivers is well on our way to solving. I've spent hundreds of hours researching, monitoring and conducting outreach efforts so that we have a good understanding of what makes Chinese dam building companies tick, how they operate and the challenges they face operating overseas. International Rivers' policy dialogue with Sinohydro has provided me with important insights into the company, which my colleagues and I have used to try to protect communities and critical ecosystems around the world.

Second, International Rivers has seen the Chinese government and dam builders make progress in its response to overseas environmental and social impacts. At this stage, the progress is only on paper. On paper, Sinohydro has gone further than most western dam builders to adopt international environmental guidelines. The Chinese government may also go further than any other government by issuing guidelines on the overseas environmental and social impacts of its companies. Policy reform however is only half the challenge - implementation is where rubber meets the road.

Third, when the Chinese government and state-owned companies put their minds to something, they get it done and - in my experience - it happens very fast. A centralized Chinese government without the party politics of US Congress means that once a decision is made, the focus is on getting the task done. Because of this, I'm reassured that once Sinohydro's President saw that the environmental policy was an important part of company operations, a high-level implementation committee was quickly established and advice was invited on areas Sinohydro lacked expertise. I'm even more reassured when I compare how quickly this is happening to my days spent shepherding environmental law reform in the Australian government.

I approach my work with optimism and enthusiasm for these three reasons. While it is by no means enough of a basis to change the mood in the US-China Economic and Security Commission's hearing room, it is enough to sustain me in my work at International Rivers.