Chinese State-Owned Enterprise Investment in Mekong Hydropower: Political and Economic Drivers and Their Implications across the Water, Energy, Food Nexus

Abstract

Over the last decade, Chinese State-Owned Enterprises have emerged as among the most active investors in Mekong Basin hydropower development. This paper uses a political economy analysis to examine the forces that drive Chinese State-Owned Enterprises to invest in hydropower in the Mekong Basin. We focus our analysis on the Lancang (Upper Mekong River) in China and in the Greater Mekong Subregion (GMS), with an emphasis on Cambodia. The analysis reveals how powerful political and economic forces from within China and the GMS influence the pace, location and scale of investments in hydropower. These forces include foreign exchange reserves, trade packages and foreign direct investment, and political alliances. Combining the political economy and nexus approaches, we conclude that although policies from China recognize interconnections across the nexus, political and economic forces craft narratives that downplay or disregard these nexus interconnections and trade-offs. This in turn, influences how trade-offs and interconnections in hydropower development are managed and recognized in both local and transboundary contexts, thereby, creating potentially significant negative impacts on livelihoods, food security and the environment.

Modeling the Hydropower–Food Nexus in Large River Basins: A Mekong Case Study

“…As an example, the 2015 technical review report on "Prior Consultation for the Proposed Don Sahong Hydropower Project" in Laos focuses almost exclusively on potential local impacts without considering the broader range of values influenced in the Basin system [54]. Further Matthews and Motta [55] detail the gap between Chinese policies to manage the water, energy and food nexus versus the lack of application by Chinese state-owned enterprises constructing dams in the Mekong region. We contend that the influence modeling detailed here could inform better nexus decisions in both these cases were the relevant decision makers motived to improve outcomes across sectors.…”

The Water-Energy-Food Nexus and the Transboundary Context: Insights from Large Asian Rivers

“…On the other hand, the MRC has noted that "the practice of true involvement, and ownership, of the food and energy sectors in IWRM is often lagging behind, which is what the water, energy and food security nexus approach aims to solve" [22]. As a result, the MRC has also recognised the relevance of the nexus approach for its work [22,117]-and for a good reason, given that it has so far been largely sidelined from the massive hydropower development plans in the region [32,118,119].…”

“…This provides a foundation for an illustrative comparative nexus analysis for three regions centred around selected transboundary Asian river basins. Based on this analysis as well as the relevant findings from the other articles published in this Special Issue [17,21,[26][27][28][29][30][31][32][33], we then discuss what the nexus means in the specific context of transboundary river basins, noting the implications that transboundary context bring to nexus approaches, and vice versa.…”

“…On the other hand the current levels of water stress in the region's major transboundary rivers-Mekong, Irrawaddy and Salween-are remarkably less than for the rivers in other two study region (Appendix A). Yet, the transboundary Mekong River presents a topical case for the water-energy-food nexus due to its rapid hydropower development and the major importance of water and related resources-including fish and rice, the region's staple food-for regional food security ( Figure 5) [32,66,[92][93][94][95]. The high availability of water has enabled the region to become one of the world's largest rice producers, and the Mekong River itself is considered to be one of the world's most productive inland fisheries [96].…”

Water-Energy-Food Nexus in Large Asian River Basins

“…mdpi.com/journal/water/special_issues/Water-Energy-Food), include 11 articles from altogether 35 different authors. Geographically, a majority of the articles look at Central Asia [21][22][23][24][25] and the Mekong [26][27][28][29], with one of the articles looking at Central Asia, South Asia and the Mekong [9] and two others including case study areas outside these three regions [25,30]. Methodologically, the articles address both theoretical and practical aspects related to the nexus.…”