A massive expansion of large-scale hydropower is currently underway in China, and now most rivers in China have some form of hydropower development project, especially in the water rich areas of Sichuan, Yunnan and Tibet.  Half of the world’s large dams are in China. Many of the dams in southern China also involve trans-border rivers. In the past, there was important use of small-scale hydropower for neighboring communities, but now nearly all development is large scale cascaded hydro, that generates electricity which is transported to the Eastern coastal areas where energy demand is high. The current major expansion is being driven as part of a strategy to reduce dependence on coal in China’s overall energy make-up. A consequence of this is that the hydropower sector is becoming increasingly powerful.

China’s river resources belong to the state and the government is responsible for decisions concerning their management, use and development. In 1958, the 5th Session of the 1st National People’s Congress resolved to consolidate the Ministry of Water Resources and Ministry of Electric Power Industry into Ministry of Water Resources and Electric Power. Later, in 1979, the Ministry of Water Resources and Electric Power was separated into two ministries. The institutional reform of 1982, led to the Ministry of Water Resources and Ministry of Electric Power being recombined into the Ministry of Water Resources and Electric Power. In April, 1988, the 1st Session of the 7th National People’s Congress passed the institutional reform of the State Council to set up Ministry of Water Resources. This was in turn reorganized in 1988.The hydropower sector has gone through a further major restructuring, since 2000.

This has meant that the smaller local state departments, which were previously responsible for hydropower, have now been consolidated into larger state owned enterprises. Consequently, these new (or reconfigured) state owned enterprises are becoming increasingly powerful and wealthy enterprises, gaining access to existing physical infrastructure as well as natural resources for further development. Together with local governments, these state owned enterprises control most of the development process. They are rapidly coming to lead the sector at a global level, and are expanding internationally, especially in Asia, Africa and Latin America. Some key corporations are Sinohydro, Datang, Zhongdiantou, Huadian, Huaneng, Gezhouba, Southern Grid.

Another important aspect is the question of financing. Within China itself, the majority of large hydro projects are receiving financing from the Clean Development Mechanism, or have received such funding. Chinese financial institutions have overtaken the World Bank as the main funder of dam projects throughout the world. Chinese banks and companies are involved in constructing over 200 large dams in approximately 50 countries, especially in Africa and Southeast Asia.

Current government plans are highly controversial, as they promote developing the installed capacity of hydropower to the maximum, pushing against the maximum internationally recognized limits of the capacity of rivers. As with dams throughout the world, there are huge social and environmental impacts associated with the dams. These impacts include: massive displacement, which in extremes cases, such as the Three Gorges Dam, has reached several millions. In 2007, (then) (check) Prime Minister Wen Jiabao reported that dams had displaced no less than 23 million people in China. Other problems include the submersion of fertile cultivated fields; non-transparent resettlement processes, in which communities are not consulted and do not participate in the decisions which affect them. Frequently the compensation is inadequate.  Following resettlement, communities have few economic possibilities and face worsened economic conditions.

Many existing dams, as well as those planned for the future, in the southwest region, are at high risk of earthquake damage. The collapse of a dam, or landslides in the area, will have a domino effect that impacts the whole downstream section of the river and its inhabitants. The dam construction process also has major social and environmental impacts to the surrounding communities, including creating difficult and unsafe transport conditions due to landslides and other disruptions. Dams have also seriously impacted on China’s biodiversity, causing fisheries to plummet, and threatening the endangered giant Chinese sturgeon and pushing other species, such as Yangtze River Dolphin, to extinction. In the case of the cross border dams in the southern part of China, many of these social and environmental problems occur also in downstream neighboring countries.

These problems are often acknowledged by the government and there is advanced social and environmental legislation in place to deal with this, especially in relation to questions about compensation and resettlement. However, these mechanisms are often implemented inadequately, and local governments have vested interests that may hinder implementation. Although Environmental Impact Assessments are required, project developers often fail to complete them before construction begins, thus making it very difficult to stop destructive projects. The fines for violating environmental laws are not high enough to have a serious impact.

Compared to other energy issues, hydropower is an area of important civil society activity, and important successes have been achieved by campaigns. Affected communities have also waged important struggles and protest against dams. However, conditions for organizing are very difficult. Firstly, it is hard for them to do much, since the land is state owned, so the government can decide what happens to it regardless of local opinion. Organizing efforts are met with heavy repression and labelled as unprofessional. Another important issue is the local perception of dams. Frequently communities believe government promises that they will get better land and that it is good they will be moved. Confusion exists about whether projects are private sector projects or government ones. Government projects still have a high level of popular trust, so if a dam is seen to be a government project people believe it must be good. However, sometimes after people have directly suffered the impacts, many lose trust and get angry, and this is when protests start.

Consequently, it is very hard for organizations and campaigners to be outright anti-dam, and this position is not considered as realistic, or even desirable. It is seen as more realistic to campaign for making the dams safer, improving the terms and conditions of displacement, resettlement and compensation, as well as distribution of the economic profits to affected communities. More transparency, community and civil society participation are demanded.  Some of these campaigns have had important successes. However, these campaigns are on specific local dams only and national coordination between the struggles at different water basins is extremely difficult. This is both due to China’s size, and also the dangers of repression.