Eyewitness Account: China’s Dam Builders Go Global

China counts half of the world’s large dams within its borders, and is the biggest producer of hydropower. Throughout the 20th century, Western companies helped China build up its hydropower capacity. Yet in the huge Ertan and Three Gorges projects of the 1990s, China changed the rules of the game. Companies interested in the multi-billion dollar contracts had to manufacture half the turbines and generators on Chinese soil, in cooperation with Chinese partners. The leading hydropower firms of the time - including ABB, Alstom, General Electric and Siemens - complied, and transferred their technology in the process.

As in other sectors, the Chinese students wasted no time underbidding and outpacing their Western masters. Today Chinese dam builders are dominating the global market, and building 19 of the world’s 24 largest hydropower projects. Their Western competitors can be heard grumbling in the background. Many of them have in the meantime built a manufacturing base of their own in China in order to cut costs.

What has happened? How have Chinese dam builders managed to conquer the world market so quickly? And what are the consequences for the social and environmental standards applied in such projects? Peter Bosshard, the Policy Director of International Rivers, examines these questions in an in-depth essay in the latest issue of World Policy Journal. Bosshard has monitored the global dam industry for almost 20 years. He has been intimately involved in the key policy processes and project campaigns which have shaped the sector. Entitled, China Dams the World, his essay combines eyewitness account, analysis and commentary on important milestones of the global environmental debate.

The author takes us to the resettlement sites of communities affected by dams in Sudan and Uganda, and to the top floors of the dam financiers in Beijing and Washington. He examines the strategies of Western dam builders and their Chinese competitors, and the evolving role of civil society networks. He finds that Chinese support has allowed projects to go forward which Western funders did not touch because of social and environmental concerns. The Chinese competition in turn made Western financiers backslide on their own commitments. “The new glut of hydropower funding allows many projects to go forward that don’t meet international social and environmental standards,” comments Bosshard.

Yet the conclusion of the new essay is optimistic. Destructive dams, mining and logging operations have already triggered a backlash against Chinese investors in many countries. China's government has realized that social and environmental sustainability is in its long-term self-interest, and is urging Chinese companies to follow stricter standards when they invest abroad. Civil-society organizations from China and the host countries of Chinese projects have begun to work together to monitor such commitments, and International Rivers supports them in this effort. “Working together with Beijing and host country governments to strengthen environmental standards in global projects looks like a more promising approach than engaging in an environmental race to the bottom,” concludes Bosshard.

As the Chinese say, the mountains are high and the Emperor lives far away. Chinese companies are managed at arm's length and often resist instructions from their government even if they are owned by the state. Further conflicts over Chinese and Western dam projects will undoubtedly follow. Peter Bosshard’s insightful eyewitness account will help to put them into perspective.

World Policy Journal is published by the World Policy Institute. The new focus issue on water also contains articles by Alun Anderson (former  chief editor of the New Scientist), Martin Chulov (the Guardian's  correspondent in Iraq) and Peter Gleick (President of the Pacific  Institute), and a conversation with Ismail Serageldin (former Chair of  the Global Water Partnership).