Part 2: The challenge of China

Part 1: River of controversy

PHNOM PENH - Facing regional rivalries, China has been seeking new friends in Asia. Two years ago, President Jiang Zemin's arrival in Cambodia was observed with much interest in Washington and also by Southeast Asian leaders.

A drive down Phnom Penh's Mao Tsetung Boulevard today confirms China's neighborly interest, from its investment in Cambodia's new sewer system, highway construction, bridges, and the Phnom Penh market to a recently completed US$30 million hydropower station.

At the time of the proposed Kompong Speu power plant in November 2000, members of Cambodia's National Assembly vigorously debated the deal that its government had made with China. There were numerous questions over the bidding process and the price of electricity, but at the end of the session, lawmakers acquiesced and China won another important round in Phnom Penh's shifting geopolitics.

It's no wonder that very few in Prime Minister Hun Sen's government or, for that matter, senior directors at the Mekong River Commission (MRC) are protesting much against China's failure to join the Phnom Penh-based water-management body. Among the factors bolstering China's sphere of influence in Cambodia is its provision of interest-free loans or grants to reconstruct the country's Senate and National Assembly building.

Warmer relations with China began after the Cambodian People's Party seized power in July 1997: Cambodia quickly asserted a "one China" policy and told Taiwan to close down its representative office.

"China does exercise a great deal of influence in Phnom Penh and, on more than several occasions, their embassy complained to us about reporting too much on Taiwan investments and business developments in our independent Chinese newspaper," said Loh Swee Ping, general manager of Cambodia Sin Chew Daily, the country's largest-circulated Chinese-language newspaper.

But even before the 1997 change of government, China had offered sanctuary to King Sihanouk in 1970, and the king still travels regularly to Beijing for medical attention. As well, some sources in Phnom Penh speculate that it is in Beijing's best interests not to see the surviving leaders of the Khmer Rouge on trial, fearing that China's role in the genocide will prove to be far too damaging.

What is key is China's need to win influential friends in a neutral Cambodia as Beijing pursues upstream hydropower projects. Instead of confronting its shadowy past, China has built a dozen or more Chinese-language schools across the country. Beijing's assistance and community-based public-relations campaign includes providing textbooks and Chinese teachers.

"Probably the most significant offer from China in recent years was the announcement of a $200 million interest-free loan in the form of a line of credit that could be tapped for future projects, and Chinese contractors have been bidding to rebuild several national roads," said Yum Sui Sang, chairman of the Phnom Penh-based China, Hong Kong and Macau Business Association.

Upstream at the controversial Lancang (the Chinese name for the Mekong) river cascade, blasting continues, not within earshot of the MRC headquarters, but its political reverberations are felt all way to the delta in Vietnam. Two dams have already been completed in China's Yunnan province and six more are scheduled to be built. These are designed to exploit the rapid fall of the level of the Mekong's main tributary as it flows through Yunnan.

The Manwan Dam, completed along the Lancang more than a decade ago, has a 1.5-million-kilowatt electricity-generating capacity. Additionally, construction is under way on the Dachaoshan Power Station. Once it is completed along with the six additional dams, China will be able to generate more than 20 million kilowatts from the complex. For the Chinese, the term "run of the river", which was initially coined to describe how power could be generated without negative impact on the river flow, has taken on a more damaging interpretation for the countries downstream.

This idea to develop a clean source of energy for local industries in Yunnan goes back to the 1970s, when China was largely closed to the outside world. In the past decade or so, the need to develop its poor regions became far more pressing for reasons of political stability. Unfortunately, such domestic concerns are at odds with China's hopes of expanding its influence in the region through cooperation with the countries downstream.

Some Mekong countries have joined in an anti-China chorus. Although a direct beneficiary of some of the electricity generated by China, Thailand's Songkhram River Conservation Group believes that the high-wall Manwan dam has already caused "the lowest water level and lowest fish catches in Laos and northern Thailand in living memory". The conservation group's position on the future dams is clear: "No more dams, please!"

The scale and impact of China's plans continue to trouble officials in the lower-basin countries. "We had no idea about the potential of the upper basin," said Prachoom Chomchai, formerly Thailand's representative on Mekong issues. Prachoom and marine-life scientists have been concerned not only about the potential reduction in the flow of water during the dry season, but also pollution. China dumps toxic wastes into the Mekong from paper mills around Dali in Yunnan. In that area alone, China's once clean and sparkling Lake Erhai is now choked with waste and agricultural runoff.

Two years ago, China's minister of water resources, Wang Shucheng, in an article in the Three Gorges News, reaffirmed the need for dam construction. "We must boost hydroelectric power generation because a power shortage remains a major bottleneck for our country's economic growth and increasing per capita energy consumption," said Wang.

China is now blasting a channel through the Sambor rapids at a reputed cost of $5.3 million, according to a recent article in Cambodia Daily. This project is primarily to build dikes and remove shoals along the Mekong from the China-Myanmar border to Ban Houayxai in Laos. It aims to link China to Southeast Asian export materials and raw materials, and results from a joint agreement of China, Laos, Myanmar and Thailand.

The spokesman for Yunnan's Navigation Affairs Bureau, Mei Ruichang, claims that all countries will benefit from the increased trade. However, neither Cambodia nor Vietnam is part of the agreement. Joern Christensen, chief executive officer of the MRC, warns that the increased trade could hurt small-time producers who are not ready to compete with imports from monolithic China.

"Of course, we have also formally invited China to become a formal member of the Mekong River Commission on several occasions, but they have declined," said Christensen.

Some experts think the construction of more dams and the channel construction could spell disaster for Cambodia's Great Lake, Tonle Sap. Marine biologists have calculated that during Cambodia's wet season some 60 percent of the water that brings the lake to its maximum size results from floodwaters that come down the Mekong and then turn north, reversing the flow of the Tonle Sap River. Understandably, the evidence is not completely in on the impact of the dams and channels. Nevertheless, China's channel-widening project may also affect fisheries by destroying shoals that act as spawning grounds for fish that live in Cambodia and also Vietnam but migrate upriver to lay their eggs, claims fisheries expert Touch Seang Tana.

Countering this argument, Yunnan researcher He Daming claims that the dams will hold back water flow during the flood season and release necessary amounts of water during the dry season to generate necessary electricity in the dry season, thus minimizing both flooding and drought long experienced by both Cambodia and Vietnam each year.

These facts are evident. Dams will empower China with the capacity to cause artificial floods or droughts in downstream countries in any season. Their dams will decide the fate and livelihood of 65 million people living in four countries: Laos, Thailand, Cambodia and Vietnam. Some critics have suggested that the industrial waste discharge from Yunnan alone, if flowing unchecked, could turn the Mekong into an industrial sewer line, and Tonle Sap Lake into a septic tank.

As the dialogue heats up between development forces and environmentalists, the facts remain most transparent under the murky Mekong waters and scores of environmental-impact reports. The delicate ecosystem of the Tonle Sap is vital for Cambodia since it produces 100,000 tons of fish a year, providing 80 percent of the protein consumed within the country, just as the fertile Mekong Delta has always been the rice bowl of Vietnam. There the poor farmers struggling against recurrent flooding and increased salinity from the South China Sea work their rice paddies and still manage to produce more than 14 million tons of harvest to feed the country of 80 million and still have sufficient surplus for exporting.

China's response to political pressure from various non-governmental organizations and the MRC was encouraging for some environmentalists when Beijing announced that it would provide regular information about water levels in the Mekong River to serve as flood warnings to downstream countries. Under a recent agreement with the MRC, China said it would give water-level data every 24 hours from two sites on the Upper Mekong.

These reports directed to the MRC will provide Cambodian and also Vietnamese authorities more time to broadcast rapid changes in the river's depth to farmers living along the Mekong. More than 800 Cambodians and Vietnamese died during severe flooding in 2000 and the large-scale natural disaster resulted in more than $430 million in combined costs of flood damage in both countries. More than 8 million lives in Cambodia and Vietnam were affected. With seasonal floods expected again, more fishermen and farmers appear most anxious about their plight.

Careful not to place the blame at the doorstep of any dam construction, the MRC's annual report in 2000 said "that the river flow could also have been aggravated by the side-effects of urbanization and infrastructure built over the past decade".

Khy Tainglim, an engineer and Cambodia's minister of transportation, has thrown his considerable weight behind China and technology. "Water is our oil, our mines of gold, our main natural resource, and we should use our water to export and get foreign currency to develop the country," said Tainglim.

The Chinese offer to report river levels almost seems conciliatory and may also have been triggered by Hun Sen's unconditional praise for the $26 million power station built by the Chinese Electric Power Technology Import and Export Council. The plant produces 12 megawatts of power, which will be distributed throughout Kompong Speu province and will also boost Phnom Penh's own power supply.

"Cambodia badly needs Chinese investors to come and invest in power plants as much as possible," said Hun Sen at a recent news conference in Phnom Penh.