Under the Radar: Forget the South China Sea, this is Asia’s real water war

Under the Radar: Forget the South China Sea, this is Asia’s real water war

While tensions in the South China Sea have the potential for limited skirmishes far out to sea, the competition over the resources of the Mekong River is putting millions at risk of natural disasters, famine and regional instability.

The Mekong River provides a vital lifeline for millions of people in half a dozen countries, from China to Vietnam. The Mekong is one of the world’s most productive inland fisheries, with an annual catch of some 2.6 million tonnes, valued at between $3.9 – 7 billion. 71% of rural Laotian households rely on subsistence fishing on the Mekong, and 1.2 million Cambodians are almost entirely dependent on Tonle Sap Lake, Southeast Asia’s largest freshwater lake that connects to the mighty river. Moreover, the Mekong Delta is home to Vietnam’s rice bowl which feeds tens of millions of people, and underwrites Vietnam’s position as the world’s third largest rice producer.

Each nation on the Mekong river seeks to exploit the waterway, and each bitterly complains about the ‘excesses’ of their upstream neighbours. Cambodia, Laos, Thailand and Vietnam have collectively built 40 dams on the river, with an additional 80 planned. Each country has also complained about the dams of its upstream neighbours, with Vietnam the most concerned, as it plays host to the river’s exit point into the Pacific, the vitally important (and fertile) Mekong Delta. As each of these countries races to industrialize, they are increasingly at odds over how the river ought to be managed.

That being said, one of the few things downstream nations can agree on is that China is the biggest threat to them all.

China as water gatekeeper

The source of the Mekong is the Tibetan highlands of China. Consequently, China holds immense power over the fate of the Mekong and those of downstream countries. China’s rapid industrialization and quest for clean energy has seen hydro-power become one of the country’s largest sources of energy, second only to coal. China has already constructed seven dams on the Mekong, with another 20 slated for completion in the near future. Since nearly all of the Mekong’s drop in elevation occurs within China’s borders, there is even more incentive for Beijing to harness the river’s full hydroelectric potential. The estimated energy potential of the Upper Mekong Basin is almost 29,000 MW – more than the world’s largest power station, the Three Gorges Dam: the Lower Basin’s potential exceeds 30,000 MW.

Downstream countries have long voiced their fears about declining and erratic water levels as well as a decrease in the amount of sediment washed down from the Chinese highlands. China’s six dam cascade network has the ability to store 23 billion m³ of water – 28% of the Mekong’s annual flow at the Chinese border. While this stored water can be used to supplement downstream water levels during the dry season, thus aiding agriculture and navigation, these benefits can only be reaped if river levels are predictable. This is often not the case, as sporadic water releases occur according to the needs of Chinese electricity and water needs.

Source: Timo A. Räsänen et al., Journal of Hydrology (2017).

The catch-22 facing China and the other downstream countries is that they face serious ecological problems from their dam building projects, but even worse consequences from not transitioning towards renewable energy. Vietnam’s situation highlights this dilemma, as the country suffers from both droughts and floods. The former is a combination of reduced river flow from dams and climate change. Cambodia faces a similar problem: 640,000 acres of Mekong-fed flooded forest caught fire in 2016. As for the latter, the World Bank has identified Vietnam as one of the top five countries most likely to be impacted by climate change. Even the most favourable low emissions scenario will see Vietnam suffer a $20.8 billion loss in GDP by 2030: by 2100 half of the Mekong Delta is expected to be underwater.

Vietnam even had to petition China to release water to combat droughts, as its agriculture and forestry sectors grew at only 1.36% in 2016: the lowest rate since 2011. In response, China opened the Jinghong hydro-power station for a month to aid Hanoi.

Having to petition China in such a manner is clearly irksome for Vietnam, and Beijing was quick to blame the water shortage on natural causes, such as 2016’s El Nino, and not on the dams. This state of affairs also lets China score easy soft-power points. “In order to help those countries cope with the drought, the Chinese government decided to surmount the difficulties it faces and do its utmost to help,” notes foreign ministry spokesperson Lu Kang. Such rhetoric paints China in a magnanimous light, despite the fact that Chinese infrastructure projects are one of the main causes for this problem in the first place.

China has a uneven reputation regarding water management; it was one of only three countries to vote against the UN Watercourses Convention in 1997. That being said, China has created the Sanjiangyuan nature reserve at the Mekong headwaters in Qinghai province. Other protected areas an UNESCO sites along the river also emerged in China, yet these are merely token nods to environmental sustainability given the scale of China’s activities on the Mekong.

River blasting and sand mining

As part of China’s One Belt, One Road (OBOR) efforts, Beijing is seeking to dynamite the Mekong’s shallows and islets to create a 890 km navigable route from Simao, Yunnan to Luang Prabang in Laos by 2020. While sections of the river are already navigable, China wants to allow 500 tonne cargo vessels to travel down the river. A similar plan tabled by Thailand was halted in 2003 after the impact assessment called the endeavour “fundamentally flawed.” Thailand has since thrown its support behind China’s plans. As a sign of the times, the first boatload of Chinese tourists to enter Thailand via the Mekong docked in May, accompanied by 180 members of the press.

Source: IWTJ Vol. 7–No.1, March 2017

China’s demand for sand has exploded in recent years: China used more concrete between 2013 and 2017 than the United States did in the entire 20th century. With demand outstripping supply, Chinese companies seek out rivers for sand mining. Illegal sand mining, already a serious issue, follows on the heels these legitimate operations. After extensive damage, China banned sand mining along the Yangtze in 2000, but miners have simply relocated.

The damage done to the Yangtze is a dire warning to China, which allows sand mining along the upper reaches of the Mekong, and to the entire downstream region. The amount of sand and sediment available downstream will only continue to dwindle as less and less particulate matter from the Tibetan highlands, and other upstream sources makes it through China’s various reservoirs and dams. Compounding this issue is the fact that downstream countries are also engaged in unsustainable sand mining, with 50 million tonnes extracted in 2011 alone, far more than the river system produces.

Less sediment reaching Vietnam ultimately means that the Mekong Delta will no longer be able to replenish itself; slowly disappearing in the face of oceanic erosion.

The fight for regional leadership

The danger for downstream countries is the fact that internal stability supersedes all other considerations in Chinese policy making. China is already highly water insecure, with per capita renewable internal freshwater declining by half since the 1960s due to population growth and industrialization. Currently, China’s per person freshwater availability is only one third the global average.

Any real (or potential) water shortage would see China use its control of the Mekong headwaters to divert ever more water to meet its own needs, thus endangering downstream populations. Said countries would also not have any means of recourse should China increasingly monopolize the Mekong’s water, save for international arbitration.

China’s dismissive attitude towards international bodies it disagrees with – such as the UN Convention on the Law of the Sea – effectively leaves regional organizations as the last available forum. The problem here is the number of overlapping organizations. For instance, China is not a full member of the Mekong River Commission, an organization that cannot hope to reach consensus without including China, and has been paralyzed by disagreements among its other members for years.

Then there is the U.S led Lower Mekong Initiative (LMI), which does not include China: the problem here is the same one. Moreover, the substantial cuts in foreign aid planned by the Trump administration for 2018 will see U.S influence diminish further, notably in Cambodia. Cambodia stands to see a 70% reduction in American aid, much of which goes to environmental and sustainability efforts. Indeed, Cambodia’s first dam on the Mekong will likely threaten the habitat of the critically endangered Irrawaddy dolphin. America’s retreat only further places Cambodia into China’s orbit as the country’s economy has become heavily dependent on Chinese investment.

“I think probably the largest impact on Cambodia’s environment [resulting] from a shift towards China would be […] the lack of transparency surrounding projects,” argues Courtney Weatherby of the Washington based Stimson Centre think-tank. China’s dominance in Cambodia has been increasing for years, with the latter having become Beijing’s cheerleader in ASEAN, often voting against motions seen as unfavourable to China.

Laos finds itself in a similar position, where Vietnam and China compete for influence. China has overtaken Vietnam as the largest investor in Laos, with seven Chinese funded dams planned on the Mekong, plans which have drawn Vietnam’s ire. China is also building a $6 billion railway connecting southern China with Laos. The scale of the project – equivalent to almost 50 percent of Laos’ GDP – highlights the disparity in bilateral relations. Faced with such an influx of money, countries like Laos face an uphill struggle should they wish to engage China in bilateral talks to temper their development plans.

Nevertheless, Laos has banned the development of new banana plantations – a craze fueled by Chinese money – after intensive chemical use was found to be polluting local water sources. Moreover, Prime Minister Thongloun Sisoulith has called into question Laos’ own OBOR fueled hydroelectric strategy: “If Laos is to be the ‘battery of Asia’ this might be overly ambitious,” notes Thongloun.

2016 saw the creation of yet another regional organization, the Lancang-Mekong Cooperation Mechanism (LMCM). Heavily sponsored by China, the organization is Beijing’s preferred vehicle for regional discussion; namely one devoid of American influence and with Beijing firmly in the driver’s seat. “[The LMI and LMCM] serve different purposes,” notes Weatherby. “When you look at the statements that are coming from China’s LMCM they really don’t sound all that different from what you hear from [China’s] ‘One Belt, One Road’ or its other large infrastructure-focused activities.” This does not bode well for the region’s ecological concerns.

Dangerous waters

Operation Mekong was the second highest grossing Chinese film of 2016, raking in $173 million at the box office. The movie, detailing the dangers faced by Chinese citizens on the river highlights the Mekong’s growing importance (and danger) for Beijing. The movie draws on the events of the ‘Mekong River Massacre’ – the deadliest attack on Chinese nationals abroad in modern times.

Specifically, two Chinese cargo ships were hijacked by drug smugglers in October 2011 and all 13 crew members killed. Following the attack, China temporarily suspended all activity on the river, and launched an international manhunt for the perpetrators. The attack also led to the creation of four nation joint patrols (the first such patrols in Southeast Asia) in 2012, with China supplying 200 police officers from Yunnan province, marking a further expansion of Chinese influence along the river.

Since then, two Chinese citizens were also killed in a suspected bomb blast in January 2016 and one Chinese worker was killed in March 2016 following an attack on a company with Chinese investment. More recently a Chinese worker was gunned down by unknown assailants in Laos in June 2017.

Chinese interests in the region are also facing opposition from local NGOs and ordinary citizens, as demonstrated by protests sparked by Chinese survey efforts for the aforementioned shipping route. Thai protesters stormed the mooring site where Chinese survey ships were docked in May, forcing them to retreat to the Laotian side of the river. Local opposition is mounting across the region against China’s plans; “the only group that will benefit from this is China […] the boats are Chinese boats, the products are Chinese products,” complains Niwat Roykaew, community leader at the Mekong School for Local Knowledge.

The Mekong runs from Tibet to the South China Sea, from one headache for Beijing to another. While China seeks an interconnected super corridor, it is increasingly facing an increasingly volatile situation, one that does not portend smooth sailing.

 

Under the Radar uncovers political risk events around the world overlooked by mainstream media. By detecting hidden risks, we keep you ahead of the pack and ready for new opportunities.

Under the Radar is written by Senior Analyst Jeremy Luedi.

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Jeremy Luedi

Jeremy is a widely referenced political risk expert and weekly columnist for Global Risk Insights (GRI). Jeremy's writing has been featured in Business Insider, Huffington Post, Nasdaq.com, The Japan Times, MSN Money, and Yahoo Finance. His work also has been quoted and recommended by Time Magazine, Politico, Transparency International, and Greenpeace, among others.