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“We should look behind the curtain”

State-owned companies are pushing for a “Great Leap Forward” in dam building. But Chinese NGOs can hold them to account, environmentalist Yu Xiaogang tells Isabel Hilton.

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Yu Xiaogang is director of the NGO Green Watershed, based in the city of Kunming, in south-west China. A veteran environmentalist and past winner of the Goldman Prize, an award for grassroots green campaigners, he has been at the forefront of China’s debate on dam building. At a recent meeting in Delhi, Yu Xiaogang sat down with Isabel Hilton to explain his concerns about powerful special interest groups in China who, he claims, exercise undue influence on government policy.

Isabel Hilton: Who are these special interest groups and why are you concerned?

Yu Xiaogang: One characteristic is their monopoly. The second is the combination of their power and capital. China is in a transition period: in the state-planned economy, every big company or industry was under government control. Then we changed to the market economy, but big state-owned enterprises (SOEs) still have power and they now get the advantages of the market economy. So they use their influence with the government to ensure they are allocated the assets; then they can get resources from the stock or the bond markets.

The state benefits from this in several ways: through taxation, or because such companies listen to the government most of the time. The government can dominate the market economy because its share in some industries is much bigger than in others. In energy for instance, it is as much as 70%. 

IH: What impact does this have on dam building in China?

YX: The government can dominate some very critical industries, like railways, air transport, power industries and telecommunications. They like to control them, but this also creates contradictions with their ideology or the targets that the Chinese government is pursuing – targets such as a just and harmonious society. These monopoly companies go in the opposite direction.

The Chinese government wants to improve policy and reach “political civilisation”, but we think that the SOE monopolies have a triple role: they are company owners; they are decision makers (or at least they can capture the decision makers); and they also manage the market.  So they control everything and that’s not good for the free market or “political civilisation”. Also it creates conflict with the people, because this combination of power and capital often works against the people’s interests, against democracy and against public participation.   

IH: Civil society managed to bring a halt to dam building under the 11th Five-Year Plan. In the 12th Five-Year Plan, there seems to be a “Great Leap Forward” in dam building in preparation. Will civil society be able to mobilise again?

YX:  We have realised that the 12th Five-Year Plan was influenced by these interest groups. Before this plan was finalised, we observed a lot of academics, official insiders, like the National Energy Administration, decision-makers and think-tanks combined saying that NGOs and civil society have misled the leaders under the 11th Five-Year Plan and that hydropower’s environmental and social impact was not negative. They portrayed it as a conspiracy between the international community and civil society to attack hydropower development. Also they said that because of the frozen period during the 11th Five-Year Plan, we now need a “Great Leap Forward” in dam building.

We can see very clearly that this advocacy influenced the decision-makers and we also think that NGOs can do something. I think it’s very important to deconstruct this discourse, because Chinese government decision-making is often influenced by this kind of discourse. NGOs should debate it. The special interest groups often operate behind the curtain – people don’t know about it. People think that SOEs are better than private companies because at least they operate in the interests of the taxpayer. People don’t know that they are destroying the economy and the political system and hurting the taxpayers’ interests. So we need to tell people about this. 

Why do these interest groups not pay attention to the environmental and social impacts? Because they want the maximum profit. They don’t care about the impacts. That’s why I think that civil society should look at what interests there are behind the curtain; so we can understand why they don’t listen to us and how they capture the government to make decisions that favour special interest groups. NGOs can investigate this and tell people the truth. Then people can perhaps find a solution individually, or campaign on projects.

IH: What would your solution be?

YX: There are many possible solutions. Some are more political. For example, some people say that these SOEs should make a profit. Many don’t. They may pay their taxes but they don’t share their profits. The taxpayer is the owner and should be recognised as such. The government should represent the people’s view.

[First], the SOEs should make their profits transparent and share them with social security funds or foundations for poverty alleviation or some other public purpose. Second, the government should not be too dependent on them. For example, in energy saving and emissions reductions, we have hundreds of solutions and methods. We need to pay attention and invest, to develop small and medium enterprises (SMEs) that can solve this. We have many demand-side management opportunities with small technologies. There are two general approaches: restraint and counterbalancing with an increase in SMEs. The third element is checking and monitoring. We should train the SOEs to follow market rules and reduce their monopoly.

IH: Would you like to see a halt to the kind of dam building that is proposed in the 12th Five Year Plan?

YX: Of course. We think that in the last 60 years, China has built so many dams already. Very big dams were constructed, especially in the last decade. Now the remaining rivers are in seismic-risk areas, so building in these areas will be very risky to people downstream and we must assess the environmental impact. We think we must assess the full cost first.

They may say that we need energy, but we should also rationalise energy consumption. This needs investment and education and the government to change its orientation. In this way, the people can save energy and reduce consumption. Only this way can we stop the dam construction. First, tell the people the risks and then have the government pay attention to the many small approaches that can solve the problem.

Isabel Hilton is editor of

Photo courtesy of Tom Dusenbery

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Teacher Yu is someone who is prepared to speak the truth

Recently in China there has been a lot of discussion on the topic of "special interest groups ". Teacher Yu stands with the NGO in criticizing the benefiting of corporations, and this is a wonderful point of view. However, the problem lies in the fact that we should question how long and how thoroughly the NGO can control the special interest groups? China News Weekly ran an article analyzing who are those special interest groups - it's a great article, feel free to look:

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the anti-dam interests also hide behind a curtain

We should always look behind the curtains when faced by loud voices with strong views. And the NGOs who act against dams are no exception.

Hydropower from dams is still the largest source of renewable energy in the world. As such it is an obstacle to those who are trying to market other forms such as wind and solar, both of which are far less efficient and far more expensive. It is also important for countries that have used all their hydro capacity to prevent their competitors from getting access to this cheap, clean energy.

So let us look at who is funding the anti-dam NGOs, who is paying for their megaphones, who is campaigning to stop poor countries from accessing a form of energy that has helped the rich world to get where it is and we may understand their loud voices better.....

China is doing a great service, throughout the world, by building dams to help poor people to achieve their aspirations for cheap, clean and reliable energy. It should continue to do so.

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Asymmetries in Curtains

I think you make good points, Marusemi, but it is pretty clear that pro-dam government supported entities have a great advantage in terms of overall resources and especially in terms of controlling information relevant to decision making processes. With regard to the case I have discussed, the Chinese government has been quite unwilling to cooperate with independent entities seeking investigate the role of dam induced seismicity, for obvious reasons. Certainly your statement that renewables are "far less efficient" is debatable, especially when considering land use and risk elements. The 2008 Sichuan earthquake is far from the worst case. Had the Zipingpu dam collapsed, the losses of property would have been measured in the trillions of dollars and losses of life could have been in the millions. Such risks, even if remote, are not acceptable and are not a consideration with renewables. Nuclear power suffers from similar risk considerations.

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Seismic Precautions are Inadequate

As a geophysicist, I consider the likelihood that the filling of the Zipingpu Dam immediately prior to the quake, actually triggered the 2008 Great Sichuan Earthquake, is quite high. Clearly the very high levels of seismic elastic energy stored in the vicinity of the dam should have been competently estimated and should have precluded construction of the dam. In seismically active areas like Wenchuan, the rocks are highly fractured and the rapid changes in hydraulic pressure produced by the filling of dams is efficiently transmitted long distances to fault zones that are on the brink of rupture and the lubricating effects of the increased water pressure can easily create a much larger rupture than would have occurred without the dam effects. How many dams would have to be built in China to balance the economic losses created by this one mega-disaster?

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The increase in income does not match the reduction in expenditure

Among sources of electric power, hydropower still holds a proportionally large percentage to the extent that a few years ago some places in southwest of China would definitely experience electricity cuts in the winter. Around the Beijing area the lack of water definitely presents a real problem.
But while we are trying to find a solution to solve the problem of total capacity, have we thought about the effectiveness of the utilization ratio? The seriousness of the waste of hydropower at the moment appears to be perfectly obvious. It's alarming that interest groups seem to forego larger benefits for small profits.