How Taming the Mekong Could Give China Unprecedented Power

SINGAPORE, BLOOMBERG -- The deadly collapse of one of the dozen or so dams dotted along the Mekong River and its tributaries has highlighted the rapid development of a waterway that is increasingly important strategically for China and its neighbors.

For hundreds of thousands of people living on its banks stretching from China through Laos, Thailand, Cambodia and Vietnam, the river is their lifeline. Flash flooding last month from the failure of an auxiliary dam at a hydroelectricity plant being built along a tributary in southern Laos killed about 30 people. It also caused widespread damage to local economies, leaving at least 6,000 homeless and raising questions about how the river is managed.

But the river, made famous in movies and attracting hordes of tourists each year, matters well beyond trade and commerce. Money has poured in as countries, often via state-run or backed companies, compete to built hydro-power plants. For smaller, poorer states like Cambodia and Laos, the investment is welcome, even if it comes with strategic strings attached.

China, by far the biggest power in the region, and where the Mekong starts up in the Tibetan plateau, is increasingly using its economic clout to secure its broader aims. Greater control over the Mekong -- known as Lancang in China -- through to southern Vietnam gives Beijing a bigger say over the use of the river’s key resources, and leverage to press countries to fall into line on its politics.

“The full brunt of this influence has not yet been demonstrated but, if exercised, it has the power to create famine, civil unrest, and potentially topple governments,” said Elliot Brennan, a Bangkok-based research fellow at the Institute for Security & Policy Development.

“China’s increasing influence over the river system, both through upstream dams and joint venture dams on the Lower Mekong, is the other half of its so-called salami-slicing strategy in Southeast Asia,” he said referring to the strategy of incremental build-up of a chain of artificial islands, infrastructure and military capability.

With China having already built six major dams on the upper part of the river, and with plans to build another 21, its ability to store and release water during the dry season and in times of drought is set to increase.

The Mekong is sometimes described by observers as the next geopolitical flashpoint for the region. While it is not at the level of the disputed South China Sea, where China has reclaimed thousands of acres and installed military outposts on tiny rocky outcrops and sandy islets, the Mekong may eventually matter even more. That’s because of its value as an arterial waterway to the sea, through the foodbowls of Southeast Asia, where rice and other key crops are farmed, for the fish it carries, and as a tourist destination.

In both the Mekong and South China Sea, China is deploying carrots (investment) and sticks (military and diplomatic pressure). While its companies have helped finance the expanding network of dams along the river, China has also sought to maximize its deciding voice on how the entire 2,700 miles (4,350 km) Mekong is run.

Jointly established in 1995, the Mekong River Commission was for 20 years the main mechanism for managing the river among Laos, Cambodia, Thailand and Vietnam. That changed in 2016, when China officially launched the Lancang-Mekong Cooperation Mechanism.

Rather than work with the Mekong River Commission, which it is not part of, China focused on building the LMCM into a body that helps promote the development of western China, and complements its Belt and Road Initiative of expanding overland and maritime trade routes to Europe.

With a membership that includes all mainland Southeast Asian states, the LMCM is broader in scope than the Mekong River Commission. It addresses political and security issues such as health, education and infrastructure as well as the sustainable development of the river and cross-border economic cooperation. It helps manage joint patrols with Chinese military boats.

The U.S. meanwhile has focused on the Lower Mekong Initiative, a partnership set up in 2009 to promote sustainable and inclusive economic growth among the five Lower Mekong countries. Secretary of State Mike Pompeo, at a meeting of the group in Singapore on Friday, cited the Southeast Asian states as key strategic partners.

“Creating equitable, sustainable, inclusive growth for the sub-region not only contributes to Asean countries and Asean’s centrality, but also to a free and open Indo-Pacific,” Pompeo said, referring to the Association of Southeast Asian Nations.

The comments were telling. Asean as a group has largely refrained from criticizing China for its actions in the South China Sea. China has insisted it will deal with territorial disputes with Southeast Asian nations on a bilateral basis, not through Asean. And its economic support of Cambodia and Laos in particular gives it sway over those nations in Asean, which makes all its decisions by consensus.

China views the LMCM as “an important part” of cooperation between China and Asean, according to Foreign Minister Wang Yi.

Still, “one unique feature of the Mekong River is that its geographic span reflects the region’s geopolitical hierarchy: a powerful China at the headwaters, smaller less developed nations downstream,” said Sebastian Strangio, a Thailand-based researcher who is writing a book on the impact of China’s influence in Southeast Asia.

“You can already see this in the extreme reluctance of downstream nations to say anything critical about China’s exploitation of the upper reaches of the Mekong,” he said.

Chinese investors are bankrolling huge projects downstream, particularly in Laos, Cambodia and Myanmar.

“The leaders of these smaller, less wealthy countries like Laos and Cambodia feel unable to turn down the investment,” said Matt Busch, a research fellow at the Lowy Institute’s East Asia program.

“With the existing governance structures for the Mekong no longer functioning in a collective and effective fashion, we will probably witness more states acting alone to secure what they perceive as their short-term interests."