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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: tom who wrote (9628)	5/4/2000 3:31:00 PM
From: CIMA	Respond to of 9980

Dam Politics: How Three Gorges Plays in Beijing Summary Citing environmental and financial concerns, members of the Chinese People's Political Consultative Conference (CPPCC) petitioned the government to slow work on the Three Gorges Dam. The CPPCC is a consultative body with little official power but a constituency that covers all of China. The real target, however, is not the dam but its patron, the hardliner Li Peng. The dam is in the middle of a political struggle, and the results of the struggle will alter the balance of power within the Communist Party. Analysis Fifty-three engineers and water experts urged the Chinese government May 3 to delay work on the Three Gorges Dam, according to the South China Morning Post. The petition was more than a judgement on the environmental and financial wisdom of the project - with one third of the signatories belonging to the Chinese People's Political Consultative Conference it was a political attack on Li Peng, the head of the National People's Congress and the dam's biggest sponsor. The Three Gorges Dam is one of the biggest construction projects in history. If completed, the 600-foot structure blocking the Yangtze River will be the largest hydroelectric dam in the world - five times wider than America's Hoover Dam. The government expects it to supply China with 11 percent of its power. However, this progress comes at a cost, as more than 1.2 million people in more than 1,400 towns will be displaced by the reservoir. ___________________________________________________________________ Would you like to see full text, photo and accompanying articles? stratfor.com ___________________________________________________________________ Corruption and mismanagement have plagued construction. The project was originally expected to cost about $11 billion, but recent estimates put that cost at more than $24 billion, not counting the cost of resettling those displaced by the waters. Stories about shoddy engineering are common. The Chinese government has admitted that more than $56 million was stolen from the project last year, but that number is probably low. The dam might not even work. Petitioners argued that the dam's water reservoir could submerge drainage outlets in the nearby city of Chongqing and back up its sewage system. Upstream, silt will build up and make it difficult to produce hydropower. The Three Gorges Dam sits squarely in the middle of the ideological debate over the direction of China's economy. Prime Minister Zhu Rongji, the country's leading reformer, has responsibility for the dam but has consistently criticized it. Li Peng, a 72-year-old Soviet-trained engineer and Zhu's biggest rival, is the real sponsor. Li has advocated the dam since the idea was brought up under the original economic reformer, former President Deng Xiaoping, and Li had responsibility for the dam until 1998. President Jiang Zemin appears content to let the two sides attack each other. ___________________________________________________________________ For more on China, see: stratfor.com __________________________________________________________________ The state of the Three Gorges Dam reflects poorly on Li, and criticizing the project is the same as criticizing Li. This latest attack is particularly well timed, as the Chinese government has started out the year with a strong official stance against corruption. Li's apparent hypocrisy makes him look all the worse. Li can hardly proclaim the advantages of state control of the economy while connected to a colossal failure. He has two ways of avoiding this fate. First, he could whip the construction project into shape, cutting graft, improving work quality and showing the world the efficacy of Chinese central planning. Much more likely, Li can try to shift the blame for the project on to Zhu's capitalists and their forerunners. Even better, Li can blame the one man who can't fight back - the late Deng Xiaoping. After all, it was his idea. The 26 million tons of concrete for the dam will likely be poured, if by nothing else than bureaucratic inertia. However, it will cost the Chinese government an incredible amount of money and a large amount of credibility as well. Zhu will continue to hound Li, and Jiang will likely let the two sides spend time fighting each other. Li can do what he can to shirk the responsibility, but his power will be restrained by the 600-foot reminder that all of China can see. ___________________________________________________ Would you like to know more about Asia? Visit stratfor.com ___________________________________________________ (c) 2000 WNI, Inc. __________________________________________________ SUBSCRIBE to the free, daily Global Intelligence Update. Click on stratfor.com UNSUBSCRIBE by clicking on stratfor.com ___________________________________________________ Stratfor.com 504 Lavaca, Suite 1100 Austin, TX 78701 Phone: 512-583-5000 Fax: 512-583-5025 Internet: stratfor.com Email: info@stratfor.com