The Blue Belt and Road

China’s Belt and Road and the World’s Water Resources

Officially, a central purpose of China’s Belt and Road Initiative (BRI) is to promote sustainable development. According to Chinese state media portrayals of the BRI’s objectives, “China is building a green ‘Belt and Road’ to protect the green mountains throughout the countries along the line,” and that “through the ‘Belt and Road,’ China and its partners share the clean dream of ‘blue water and blue sky.’” The on-the-ground reality, though, appears to be quite different. Virtually all BRI power sector projects, for example, have employed highly-polluting fossil fuels. But one of the BRI’s biggest environmental impacts may come from its impact not on the world’s energy, but rather its water.

The significance of the relationship between water and the BRI has not gone unremarked by Chinese analysts. A 2017 study published by the Chinese Academy of Sciences concluded, for example, that “water resource scarcity issues will become the core issue of the development of countries along the Belt and Road.” Nonetheless, as this article details, the water-related impacts of the Belt and Road are likely to have a significant effect on local and regional politics in BRI countries.

Water projects are often highly contentious, and even small and seemingly well-intentioned efforts can provoke local opposition. In August 2018, for example, the BRI-linked Greater Kurunegala Water Supply and Sewerage Project was completed in northwestern Sri Lanka to serve 70,000 area residents and 3,500 institutions, including a local hospital. However, despite these proposed benefits, Sri Lanka’s Minister of Urban Development, Water Supply and Drainage was compelled to defend the project over local concerns, “denying allegations that this project would pose a threat to the lakes and wells” in the area. Of far greater political significance, however, are the many hydropower development projects proposed as part of BRI, many of which impact waterways shared between countries.

A partial list of BRI hydropower projects, as indicated in news articles posted on China’s official Belt and Road portal, is presented in the table below. Many of these take place in currently remote and ecologically fragile regions, including the Himalayas and tropical rainforests. Such projects include a $107 million diversion between Nepal’s Babai and Bheri Rivers for irrigation and hydropower begun in 2015 by the China Overseas Engineering Group and agreements to build at least four hydropower plants in Indonesia, three of which are in the Sumatran highlands. Several BRI-linked hydropower projects are very large in scale and potentially transformative for their host countries. In August 2017, for example, China Gezhouba Group announced a $4.5 billion contract to build a 2,172 MW hydropower plant in Angola, which, when completed, will supply up to half the country’s total electricity.

The scale of these projects makes it more likely that their impacts may extend to multiple countries which share affected waterways. This salience is reflected in the emphasis several Chinese commentators place on improving cooperation over shared water resources related to hydropower and other infrastructure developments. In an opinion article published by the state-run People’s Daily, for example, Huang Yabei, a professor at Hohai University Law School warned that “All countries should actively strengthen communication through dialogue and consultation,” including by “strengthening the coordination of water resources policies.” Huang furthermore placed special emphasis on developing international agreements: “In building the Belt and Road, we should attach importance to researching the specifics of framework agreements for the water resources of China and other countries,” especially “robust inter-jurisdictional water cooperation mechanisms.” Other commentators have similarly stressed the significance of cooperation along China’s transboundary rivers, such as those shared between China and Kazakhstan.

There are some signs that the Chinese government is attempting to support such ambitions. According to the Ministry of Water Resources (MWR), Memoranda of Understanding have been signed with more than 60 national water resource authorities in support of the BRI. The Ministry has also conducted more than 100 high-level visits, including with the Netherlands, Switzerland, and Albania. Regular dialogues concerning water resource issues have also been established with Japan, South Korea, South Africa, and other countries. MWR also reports it has provided training to nearly 2,000 water resource specialists from some 112 countries and provided assistance to some 30 hydropower, water conservancy, and other water-related projects abroad, including in Myanmar and Malawi. MWR also reported that its involvement was in part intended to “promote China’s achievements in water control and showcase China’s image.”

But despite these efforts, hydropower projects have also been the cause of some of the BRI’s biggest stumbles to date. Late last year, the governments of both Nepal and Pakistan pulled out of hydropower development projects that China had pledged to finance through the BRI, citing a lack of transparency. Nepal’s deputy prime minister cited “irregularities” in the bidding process for canceling the Budhi Gandaki project just weeks before a general election, while the chairman of Pakistan’s Water and Power Development Authority bluntly stated that “Chinese conditions for financing the Diamer Bhasha Dam were not doable and against our interests.” Strikingly, given both sides’ high expectations for economic partnership, Pakistan announced it would instead finance the $14 billion project on its own, signaling its intention to take such a sensitive project into its own hands. In Nepal, meanwhile, the Budhi Gandaki project was later reinstated, but investment uncertainty forced China Three Gorges Corporation to pull out of another, 750 MW project.

Prospects for cooperation appear better with respect to hydropower projects in the greater Mekong region, where China has apparently invested greater effort in reducing tensions. This region is the site for several BRI-linked hydropower projects: in September 2018, the Dongfang Electric Corporation signed a deal for a joint Vietnam-Laos project to build three 40 MW hydropower generating units near the two countries’ shared border, primarily for the benefit of Vietnam. Given the importance of multinational cooperation on such projects, Beijing has ensured that the Lancang-Mekong Cooperation mechanism (LMC), which was established primarily to facilitate such cooperation, includes a focus on water resource management.

More worryingly for other countries, however, China may in some cases be using BRI-linked water projects to strengthen its control over sites of strategic significance. The BRI-linked Ethiopia-Djibouti Cross Border Potable Water Project, for example, is intended to provide drinking water for virtually the entire population of Djibouti, a country of strategic importance to several countries because of its location in the Horn of Africa. Financed by the Export-Import Bank of China, the project is notable for including a 102km pipeline to pump fresh water from Ethiopia across the border into Djibouti. Chinese state media describe the project’s objectives as “a bid to solve the drinking water problem in Djibouti as well as to deepen ties between the two neighboring countries.” However, Djibouti is also home to China’s first official overseas military base. Exerting control over the host country’s water supply would undoubtedly provide China with powerful leverage over its government.

Whatever the intention of such investments, it is clear that China’s BRI carries important implications not only for the world’s water resources, but also for politics in Belt and Road countries. Non-governmental and multilateral institutions should therefore work closely with the Chinese government as well as individual large Chinese construction firms to share best practices related to environmental impact assessment and dispute resolution. Where appropriate, this expertise should also be shared with BRI country governments. Moreover, policymakers, particularly in BRI countries, should pay careful attention to how BRI projects might affect local politics, especially where they might exacerbate pre-existing tensions or conflicts over water or other shared natural resources. One of the worst outcomes of BRI, both for individual localities and for the world, would be for it to exacerbate the growing number of local conflicts over shared, and often shrinking, water resources.

Scott Moore directs the Future of China Project at the University of Pennsylvania