Australian Journal of International Affairs

ISSN: (Print) (Online) Journal homepage: https://www.tandfonline.com/loi/caji20

Explaining China’s Lancang-Mekong cooperation

as an institutional balancing strategy: dragon
guarding the water

Sovinda Po & Christopher B. Primiano

To cite this article: Sovinda Po & Christopher B. Primiano (2021) Explaining China’s Lancang-
Mekong cooperation as an institutional balancing strategy: dragon guarding the water, Australian
Journal of International Affairs, 75:3, 323-340, DOI: 10.1080/10357718.2021.1893266

To link to this article: https://doi.org/10.1080/10357718.2021.1893266

Published online: 28 Feb 2021.

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AUSTRALIAN JOURNAL OF INTERNATIONAL AFFAIRS
2021, VOL. 75, NO. 3, 323–340
https://doi.org/10.1080/10357718.2021.1893266

Explaining China’s Lancang-Mekong cooperation as an

institutional balancing strategy: dragon guarding the water
Sovinda Poa and Christopher B. Primianob
a
School of Government and International Relations, Griffith University, Queensland, Australia; bDepartment
of International Relations and Regional Studies, KIMEP University, Almaty, Kazakhstan

ABSTRACT KEYWORDS
This article examines the China-led Lancang-Mekong Cooperation China; Lancang-Mekong
(LMC) as an institutional balancing strategy against the external Cooperation; institutional
pressures from other existing mechanisms, such as the US- balancing
Mekong Partnership (UMP), the Mekong-River Commission (MRC),
and the Mekong-Japan Cooperation (MJC). In contrast to another
China-led multilateral initiative (i.e. the Asian Infrastructure
Investment Bank), the LMC has received significantly less
attention by the media, scholars, and state actors, as the LMC is
limited to five states in Southeast Asia that are often not viewed
as major players in world politics. Because our main focus is
examining the institutional competition that exists in the
Mekong, we explain this competition in the region, with China’s
LMC being our main focus. By drawing on the concept of
institutional balancing, we explain both why China is doing this
and the pattern of great powers that are engaged in institutional
competition in the Mekong. The article’s findings indicate that
China has yet to achieve its balancing objective, as most LMC
members are not willing to exclusively side with China.

Introduction
The Mekong River, known as Lancang in Chinese, connects China with all of the five
countries that comprise the Mekong region—Cambodia, Laos, Vietnam, Thailand, and
Myanmar. Of consequential importance, China is located at the top of the river and
thus China is in a key strategic location for influencing the Mekong. Due to its strategic
location, the Mekong region has gained tremendous attention from both regional and
great powers. One feature of engagement with Mekong countries by such regional
and great powers is via institutions,1 as discussed further in the following sections. Con-
cerned with China’s growing power and influence, the US initiated the Lower-Mekong
Initiative (LMI) in 2009, which aims to support Mekong countries in various develop-
ment sectors. The LMI was upgraded to the US-Mekong Partnership (UMP) in 2020.
The US’s Free and Open-Indo Pacific strategy is a broad outline that emphasises the sig-
nificant role of the UMP in keeping China in check. As a key ally to the US and signifi-
cantly concerned about China’s rising power and influence in the region, Japan has
increased its cooperation with all Mekong countries, as reflected in its annual

CONTACT Sovinda Po sovinda1991@gmail.com

© 2021 Australian Institute of International Affairs
324 S. PO AND C. B. PRIMIANO

Mekong-Japan Summit Meeting. Due to how Thailand has long-viewed mainland South-
east Asia, except Vietnam, as its traditional sphere of influence, Thailand has increasingly
been anxious about China’s rapid power ascent. Thailand seeks, in short, to limit China’s
influence in the Mekong region. Because China’s rise could sabotage Thailand’s long-
standing influence in the Mekong region, this has resulted in the resurrection of the
Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy (ACMECS), a Thai
initiative. In addition to the US and China, regional powers, such as India and South
Korea, are also striving for influence in the Mekong. This is manifested in the form of
institutional building, with India’s Mekong-Ganga Cooperation and South Korea’s
Mekong-ROK Summit. Creating such institutions have become a new form of power
competition, and this serves as a connecting tool for great and regional powers to
engage the region.
Against this backdrop, China initiated its own institution in 2015, the Lancang-
Mekong Cooperation (LMC), with its secretariat office in Beijing. The LMC stresses
the 3+5 Cooperation Framework, meaning the three cooperation pillars—(1) political
and security issues, (2) economic and sustainable development, and (3) social, cultural
and people-to-people exchanges—and the five key priority areas—(1) connectivity, (2)
production capacity, (3) cross border economic cooperation, (4) water resources, (5)
agriculture and poverty reduction. Within this context, the questions arise: How has
China used the LMC to advance its institutional balancing objectives? Moreover, what
are the patterns that this reveals about China’s actions? Put differently, this article
focuses on China’s overall desire to advance its interests by examining the case of the
LMC. While another multilateral Chinese initiative, the AIIB, has received ample atten-
tion because of its global reach, the attention that the LMC has received pales in compari-
son. Nonetheless, this Chinese initiative represents how China seeks to use Chinese-led
IOs to advance itself.
Our argument is that the creation of the LMC indicates China’s response to rising
threats in the Mekong posed primarily by the US and Japan. For example, in 2018,
Chinese Premier Li Keqiang (2018) offered the following in a Cambodian newspaper,
The Khmer Times:
In the context of rising backlash against globalisation and protectionist sentiments as well as
lack of momentum in East Asian cooperation, the LMC as a basic component of regional
cooperation is not only conducive to narrowing the development gap within ASEAN and
advancing ASEAN integration, but also enriches South-South cooperation and efforts to
foster a more open, inclusive and balanced economic globalisation that benefits all.

Premier Li’s statement, especially the first sentence that highlights the anti-free trade,
and protectionist policy of the Trump administration, reflects two things about China.
First, as a rising power in Asia, China views these trends as formidable threats to its
national interest. Second, it reveals China’s desire to strengthen cooperation with the
Mekong countries. If China cannot do so, it risks losing its influence to other outside
powers. While it is clear that the LMC is a response to increasing threats to
China’s interests and power in the Mekong, there is less scholarship about how the
LMC is utilised to secure its interest and power, which is the focus of this article.
This article engages the concept of ‘institutional balancing,’ which Kai He (2008)
coined, as an analytical framework to investigate this phenomenon. Unpacking our
 AUSTRALIAN JOURNAL OF INTERNATIONAL AFFAIRS 325

research question of how China uses the LMC to advance its institutional balancing
objectives is important for two reasons. First, it adds more empirical insight into how
the LMC works. Understanding the LMC provides more empirical evidence into
China’s broader multilateral institution strategy. In the post-Mao era, China has
evolved significantly in terms of its engagement with international institutions. Since
China’s actions in its own backyard are likely to generate some effects on the inter-
national system, Chinese actions in the Mekong region will have broader geopolitical
impacts on other regions as well. For instance, as China intensifies its engagement
with the Mekong region, the US will also tighten engagement with Mekong countries.
As both China and the US are moving closer to a Cold War 2.0 in areas such as technol-
ogy, trade and ideology, the Mekong region could become a next battleground for such a
power rivalry. As Barry Buzan and Ole Wæver (2003) argue, the effects of regional power
competition matter to the systemic balance of power. Actions that are occurring in a
given region (e.g. the LMC) reveal the current power transformation that is occurring
in the international system (Buzan 2012).
Second, it enriches the institutional balancing literature by studying the case of the
LMC. While scholars of this concept believe that hard balancing remains relevant, it is
costly. Due to such costs, most states opt to pursue institutional balancing. This study
builds on this conviction in arguing that institutional balancing is also used to protect
the balancer’s interest in the absence of imminent threats. For instance, the security chal-
lenge presented by the rise of China is the catalyst for the Quadrilateral Security Dialogue
(QSD), which works to serve the strategic interests of its members (i.e. the US, Japan,
Australia and India) (O’Neil and West 2020). Pressures are as significant as threats in
triggering institutional balancing. Thus, China’s institutional behaviour can also
account for the institutional competition/balancing phenomenon in the region.
The rest of the article proceeds as follows. The first section explains the concept of
institutional balancing. Then, the second section reviews the existing studies on the
LMC. The third section examines the pressures that China has faced in the Mekong
region. Such pressures come from both the Mekong countries and the external players
like the US and Japan. The penultimate section illustrates the strategic utility of the
LMC as an institutional balancing strategy against these pressures. Then, the last
section offers a conclusion.

Conceptual framework
The institutional balancing strategy as a theoretical perspective
While studying the important roles that institutions play for states is not new, only
recently have there been attempts to comprehensively conceptualise this. Kei Koga
(2018) proposes four types of institutional strategies: institutional balancing, institutional
bandwagoning, institutional hedging, and institutional co-optation. Since our argument
is that the LMC is a response to the growing pressures that China confronts in the
Mekong region, the concept of institutional balancing is relevant for our case. Koga
(2018, 54–55) defines institutional balancing as ‘collective actions by members of a secur-
ity institution that aim to neutralise, or at least minimise the current and expected power
differences of a hegemon or rising power that is situated outside the institution’. His
326 S. PO AND C. B. PRIMIANO

definition seems to focus on the smaller states’ security strategies by using the insti-
tutions. Thus, it is not applicable to our case, we focus on China as a great power.
Because our emphasis is on China as a great power and how China uses an inter-
national institution (i.e. the LMC) to advance itself, we prefer Kai He’s conceptualisation
of institutional balancing. Kai He defines institutional balancing, which is a type of soft
balancing, as ‘countering pressures or threats through initiating, utilising, and dominat-
ing multilateral institutions’ (He 2008, 489). Both economic interdependence and per-
ceptions about the power of the other state are essential for embarking on an
institutional balancing strategy (He 2008, 489). Moreover, since Kai He’s focus is ‘on
why states choose institutions to seek security,’ he uses the term institutional balancing
as opposed to soft balancing, as soft balancing could apply to many other areas (493). The
ways in which states use an institutional balancing strategy depends on the distribution of
capabilities in the regional system (He 2008). In addition, while indirect threats are
crucial for institutional balancing to occur, significant pressures from other powers are
also important in triggering institutional balancing. The latter is applicable to the case
of the LMC, where China does not face potential or imminent threats. China does,
however, feel pressure from rival powers.
Institutional balancing is carried out in two ways: inclusive or exclusive balancing (He
2015). Inclusive balancing is about ‘binding the target states in the institution’ (493).
Moreover, inclusive balancing is about the construction of norms and rules ‘to constrain
other states’ behaviour or control and manipulate agendas to address issues related to
their interests in multilateral institutions.’ (He 2008, 493). Even though inclusive balan-
cing is more about norm building, we argue that the promotion of certain norms within
the institution is usually underpinned by certain discourses that aim to persuade other
states to accept the intended norms. For instance, China uses phrases such as ‘win-win
cooperation’ in order to promote a norm that it considers to be highly salient: ‘no-con-
frontation’. In contrast, exclusive balancing is about ‘keeping the target states out’ (He
2008, 493). Moreover, exclusive balancing refers to the consolidation of political and
economic power to fight against external pressures (He 2008, 493).
In the era of economic globalisation, military balancing (i.e. having a military alliance)
is less helpful than institutional balancing, as states would then forgo economic gains by
opting to join an exclusive military alliance. Institutional balancing, with its use of inter-
national institutions, in contrast to military balancing, offers the gains associated with
economic globalisation and thus a more reasonable decision to achieve balancing in
the current version of economic globalisation (He 2008, 494).
Ferguson (2012, 206) also views regional institutions, (e.g. the LMC) created by a
regional power (e.g. China), as a part of soft balancing, or in this case, institutional bal-
ancing. One of many ways to soft balance the external pressures is to establish a firm
sphere of influence that the external powers find it hard to penetrate their influence. A
regional institution like the LMC could help China realize this goal. As Peter Katzenstein
(2005) points out, any attempts by external powers to interfere in the regional affairs of a
regional power is perceived as threating. From Katzenstein, we can extrapolate that
China views itself as legitimate to create the LMC to counterbalance such external
influence and safeguard China’s interests in its own backyard.
Ultimately, there are two main goals with institutional balancing: (1) to safeguard the
given country’s influence and (2) to decrease the influence of other powers. In terms of
 AUSTRALIAN JOURNAL OF INTERNATIONAL AFFAIRS 327

the first goal, yes, countries in the Mekong are welcoming China’s role; regarding number
2, it is unclear. When China’s action in the Mekong increases, regional and major powers
(e.g. Japan and the US) step up their involvement in the region due to concern that China
might be getting ahead in the region. In terms of why China has been unable to decrease
the influence of other powers, Goh’s (2008) ideas on omni-enmeshment and complex
balancing are applicable here in explaining why Southeast Asian states are not siding
exclusively with China. With complex balancing, it is about having countries linked
economically and thus enmeshing major powers regarding security matters. For
example, if country X aims to have major powers involved in a particular sector of its
economy (e.g. energy), then country X is advancing complex balancing.

Existing literature on China’s institutional balancing strategies

The following existing studies highlight a number of the motives that have encouraged
China to create the LMC: (1) to counterbalance the influence of other aspiring powers
such as the US, Japan, South Korea, India and, of course, Thailand (Gong 2020; Middle-
ton and Allouche 2016); (2) to underpin the broader context of China-ASEAN relations
(Middleton and Allouche 2016); (3) to create a harmonious regional environment (Yang
2019); (4) to advance China’s desired image of being a responsible great power (Yang
2019); (5) to enhance the competitiveness of China’s western regions, such as Yunnan
province (Zhang and Li 2020); (6) to seek new markets for Chinese products and
promote the internationalisation of the RMB (Sach 2018), (7) to advance the broader
Belt and Road Initiative (Middleton and Allouche 2016; Sach 2018; Yang 2019); (8) to
serve as a platform for non-traditional security cooperation in achieving geopolitical
objectives (Gong 2020); (9) to serve as a conflict mitigator (Xing 2017); and (10) to
create a hub-and-spoke dynamism that places China at the centre (Biba 2018; Gong
2020; Middleton and Allouche 2016). We do not reject these existing explanations
because they have merits in elucidating the rationales of the LMC. However, among
the ten points presented above, we argue that the primary rationale of the LMC is to
counterbalance external pressures presented by the existing mechanisms and other exter-
nal and regional powers, such as the US, Japan, Thailand, and India, while the rest of the
explanations provide only secondary importance.
Timing is important in understanding the formation of the LMC. Given that the PRC
did not become a UN member until 1971 and was not involved in other international
institutions, Johnston states that at the time of Mao’s death in 1976, China was a
‘novice’ in such institutions (2008, 33). Due to being a novice in international insti-
tutions, which lasted even until the 1990s (Johnston 2008, 33), China learned or was
socialised by interactions regarding how to act in institutions.2 China, in other words,
has evolved tremendously regarding its participation in institutions since the days of
Mao. Reflecting this socialisation, China began its engagement with ASEAN in the
early 1990s and was socialised in this regional organisation. Consequently, China pro-
posed the ASEAN-China Free Trade Agreement in the early 2000s, which was then
signed in 2004. The creation of the Shanghai Five in 1996,3 is another proven case.
The institution was created for the ostensible purpose of perceived terrorism in
Central Asia, which also includes Xinjiang, and for the need to resolve border issues
of the member states with China. Gill’s 2001 assessment of the Shanghai Five is still
328 S. PO AND C. B. PRIMIANO

applicable to China’s creation of the LMC in 2017 and its current actions with the LMC:
‘This will mark a new stage in the efforts of countries such as Russia and China to find
ways to assert themselves more effectively in a world they see as dominated by the United
States.’ (2001). To reiterate, the LMC serves a tool in China’s grand strategy to protect its
interests and balance against potential risks posed by the US and other regional powers.

China under stress in the Mekong

The Mekong region is one of the most contested geographical fields for power compe-
tition among major powers. The US, Japan, India, South Korea and Australia all have
their own initiatives in working with Mekong countries. Some of the initiatives are over-
lapping in that they focus on similar issues, but there is competition with such insti-
tutions. These initiatives (e.g. the Mekong-Ganga Cooperation by India, and Mekong-
Republic of Korea Summit by South Korea) vary in scope, some are small and some
are big. The ensuing sections will discuss the Mekong initiatives that the US, Japan,
and Thailand have advanced and the MRC, as these initiatives will play influential
roles in challenging Chinese power and influence. The other initiatives, however, are
relatively small and less powerful. Also, whereas the US and Japan are focused on
improving the environment in the Mekong, this will hinder the LMC, for China is not
focused on improving the quality of the environment in the Mekong.

The US and its initiative at the Mekong

The US is the country that is the most vocal critic of China regarding its hydro dam con-
struction on the upper Mekong River. US Secretary of State Mike Pompeo (2019) bluntly
aired his harsh criticism of China over its dam construction during the 2019 Lower
Mekong Initiative (LMI) Ministerial Meeting, stating that
The river has been at its lowest levels in a decade – a problem linked to China’s decision to
shut off water upstream. China also has plans to blast and dredge riverbeds. China operates
extra-territorial river patrols. And we see a push to craft new Beijing-directed rules to govern
the river, thereby weakening the Mekong River Commission.

Pompeo (2019) also announced US plans to work with Japan and Mekong countries to
tackle these challenges, through the ‘Japan-U.S. Mekong Power Partnership’ with the
US financial commitment of $29.5 million and to work with Thailand to reinvigorate
the Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy (ACMEC) strat-
egy. In September 2020, the US upgraded the ‘Lower-Mekong Initiative’, initiated under
the Obama administration, to the ‘US-Mekong Partnership’ and the US pledged to con-
tribute $153 million to this new cooperation framework (Strangio 2020).

Japan and its initiatives at the Mekong

Japan, in contrast to the US, is not as vocal about its criticism of China in the Mekong. In
other words, Japan is a quiet actor in the Mekong. Instead of issuing public statements critical
of China in the Mekong, Japan expresses its concerns behind closed doors (interview with a
former Cambodian ambassador). Japan has consistently forged good cooperation with the
 AUSTRALIAN JOURNAL OF INTERNATIONAL AFFAIRS 329

Mekong countries, as reflected in the Mekong-Japan Cooperation. Within this framework,

there have been several meetings, which take place annually, such as the Mekong-Japan
Summit Meeting and the Mekong-Japan Foreign Ministers’ Meeting. In 2018, Japan and
the Mekong countries released the ‘Tokyo Strategy 2018 for Mekong-Japan Cooperation,’
which aims to achieve sustainable development goals in the Mekong, to work with the
Free and Open Indo-Pacific (FOIP) and to collaborate with ACMECS to realize the
ACMECS Master Plan (2019–2023). In this strategy, Japan created the Green Mekong
Forum with the primary goal being to protect the environment along the Mekong River.
The basic idea of the Forum is to pay more attention to the environment in the Mekong.
The environment is an issue that both Japan and the US use to increase their standing in
the region and to advance their geopolitical objectives. Thus, both Japan and the US are
using non-traditional security issues to advance their geopolitical standing in the region.

Thailand and its initiatives at the Mekong

Thailand has always regarded the Mekong region as its traditional sphere of influence.
Given the growing power of other nearby powers like China, the Thai government is con-
cerned about its continuous decline of influence in the region. One way to strengthen its
influence is through the 2003 Thai-created Ayeyawady-Chao Phraya-Mekong Economic
Cooperation Strategy (ACMECS) (Chambers and Bunyavejchewin 2019). ACMECS
covers eight strategic areas, such as trade and investment facilitation, public health
and social welfare development, human resource development, industrial and energy
cooperation, tourism cooperation, transport linkage, agricultural cooperation, and
the environment. To achieve these goals, Thailand proposed the ACMECS Trust Fund
to sponsor various development projects that fall within the ACMECS framework.
Two other projects have been set up as well: the ACMECS Infrastructure Financing Facil-
ity and the ACMECS Project-Based Financing Facility. In 2019, Thailand announced that
it would provide $200 million to the fund, while the rest of the members would contrib-
ute $100 million. Another $200 million will be contributed by the other players, such as
the US, Japan, South Korea and Australia (The Nation 2019).
The ACMECS had a two-year break due to the internal turmoil of Thai politics in 2012
and 2013. The revitalisation of the ACMECS in 2014 is an indication that the Thai gov-
ernment seeks to strengthen its leadership role in the Mekong region and to counterba-
lance China’s influence (Chambers and Bunyavejchewin 2019; Ho 2019). To realize
its objectives with the ACMECS, given that Thailand does not have enough money to
finance the infrastructure projects, and that Thailand lacks the knowledge for carrying
out such projects, this compels Thailand to seek close cooperation with external
powers, such as the US and Japan, and with financial institutions, like the Asian Devel-
opment Bank (ADB), to fund its projects (Ho 2019). One Thai senior government official
encouraged ACMECS members to have a common strategy and warned the recipient
countries of the potential pitfalls in accepting Chinese loans (Ono 2018).

The Mekong River Commission

Established in 1995, the MRC is the oldest institution that works to provide water gov-
ernance to the Mekong River. The MRC’s official members are Thailand, Laos, Cambodia
330 S. PO AND C. B. PRIMIANO

and Vietnam.4 The MRC also welcomes Chinese membership and expresses its intent to
work with China and its LMC. China was invited to become an official member, but
China denied such a request. With deep suspicion of the MRC, and with the intention
not to be bounded by any legal commitments, China prefers to be an observer. In com-
parison with the US initiative and the Thai initiative, the MRC is less critical of China.
Having said that, the MRC does issue its concerns regarding Chinese dam construction.
The MRC claims that the repeated droughts in the downstream areas are due to the
China’s actions with dams on the upper stream. Furthermore, the MRC has, on many
occasions, warned about the nefarious impacts on the environment and the livelihood
of the downstream residents. However, the MRC is always more willing to express its
commitment to welcome China to be a full member, rather than a dialogue partner.
Despite the fact that China has worked with the MRC for quite a long time in terms
of information sharing, this cooperation is not strong yet. The former CEO of the
MRC stated that ‘ … cooperation stills need to be stronger … I invite China to work
closely with us’ (quoted in Yan 2018). This lack of strong cooperation indicates
China’s unwillingness to go along with the MRC and its desire to have ultimate
decision-making power. In short, China does not want another institution to impact
how it acts.

Guarding the water: LMC as an institutional balancing strategy

Both internal and external powers have engaged the region through their own initiatives.
The US, Japan and Thailand have supported one another to counterbalance China’s
influence in the Mekong, which intensifies regional competition for influence and
power. Just like with its creation of the AIIB, China created the LMC to protect and
advance itself, as it provides China with leverage in international politics. The creation
of the LMC is merely a reflection of the intense power rivalry. In this context, the
LMC could help China protect its interests and strengthen its influence, while also
attempting to reduce the influence of other powers and their initiatives. In this regard,
the LMC operates in two ways: inclusive and exclusive.

The inclusive institutional balancing of LMC

Among the internal players in the Mekong region, Thailand is the most powerful and the
most proactive. In contrast to Thailand, Vietnam does not have a Vietnamese-led insti-
tution that enables it to project more influence over Mekong countries, and thus Vietnam
does not present real challenges. One way that Vietnam could challenge China in the
Mekong is by raising the Mekong issue during the ASEAN Summit Meeting. Vietnam
could also, however, only when it serves as a chairman. Otherwise, Vietnam remains
less influential when it comes to Mekong politics. Nonetheless, Vietnam, at this point,
is not a target for Chinese institutional balancing. Other Mekong countries,
(e.g. Myanmar, Laos and Cambodia) remain silent on the Mekong issues, for these
countries rely heavily on Chinese economic support. Thailand is a different case. As
noted above, Thailand has advanced an initiative that strengthens its power and counter-
balances China’s influence. For China, incorporating Thailand into its LMC is important
for two reasons.
 AUSTRALIAN JOURNAL OF INTERNATIONAL AFFAIRS 331

First, via the LMC, China aims that Thailand will not form an institutional balancing
effort with other powers, such as the US and Japan, as Thailand is the closest ally of the
US in mainland Southeast Asia.5 While China has forged close economic ties with
Bangkok in recent years, this security arrangement between Thailand and the US, in
addition to the current institutional collaborations among Thailand, the US and Japan,
is a serious concern for Beijing (Storey 2011). Currently, the three sides—Thailand,
the US, and Japan—all have pledged to work with each other to develop the Mekong
region. Any decisive move by these three powers to form an institutional containment
policy (e.g. the Quad-style arrangement), against China will challenge Chinese
influence and interest in the Mekong. The situation could be worse if India and Australia
join the institutional coalition containment, like they have done with the Quad.
Under Prime Minister Abhisit Vejjajiva, Thailand was more suspicious of the
China’s hydropower dam ambitions. While PM Abhisit Vejjajiva did not directly criticise
China over the issue of dam construction, he did express concerns over the negative
repercussions of the dams. The Thai government expressed its concerns
regarding environmental degradation, but it did not explicitly state that these problems
are coming from China. The Thai government is doing this because of its concern about
not offending China, as Thailand lacks China’s power. As one Southeast Asia affairs
observer explains, Abhisit Vejjajiva intended to demand, but ultimately did not, that
Beijing be held accountable for all of the negative consequences caused by the construc-
tion of the upstream dams (Storey 2011). Abhisit Vejjajiva also advanced the Thai pos-
ition, in line with the Vietnamese counterpart, ‘to protect legitimate and long-term rights
of all downstream and upstream countries for the sake of common sustainable develop-
ment in the sub-region’ (Cronin 2009).
Even though the current Thai government under General Prayut Chan-o-cha seems to
have amicable ties with China on economic and military relations, the Mekong issue
remains cause for alarm for General Prayut. The Thai government is under tremendous
pressure from the civil society groups and Thai nationals who are affected by severe
droughts. The MRC estimated that the 2016 drought resulted in an economic loss of
$1.7 billion to Thailand (Mekong River Commission 2019). The severe drought also
instigated protests from Thai residents who live along the Mekong River and civil
society groups demanded the Thai government take preventive measures. In response,
General Prayut ordered the army to stand ready to aid those who were affected by
droughts in July 2019 (Bangkok Post 2019b). Like his predecessors, even though
General Prayut did not openly criticise China over this drought issue, he expressed his
‘grave concern’ to the Thai public regarding this (Bangkok Post 2019b). As such, we
can expect that the Thai government is likely to take actions against the Chinese dam
construction, such as seeking external powers like the US and Japan to be even more
involved in the Mekong, especially if it is under extreme pressures from both its
people and the civil society.
Second, via the LMC, China expects Thailand to cooperate on the Chinese cross-
border trade with other riparian states along the Mekong River. As China keeps
growing economically, its cross-border trade along the Mekong River with Myanmar,
Laos and Thailand is also increasing. The Golden Triangle is a joint area in which
crime is widespread and also where the Mekong River flows across. Given that China
has increasingly conducted its shipping of exports via the Golden Triangle, which
332 S. PO AND C. B. PRIMIANO

borders Thailand, Laos, and Myanmar, this area is highly salient for China’s interaction
with such states. Yunnan province, where the Mekong river originates from, is the most
significant province for Chinese trade with other Mekong countries (Summers 2008). By
the end of 2017, Yunnan’s trade with the five Mekong countries reached $12 billion
dollars, reflecting a 7.28 percent annual increase from 2016 (China Daily 2019). The
2011 attack on two Chinese cargo boats that killed 13 Chinese citizens in the Thai
part of the Mekong River presents a worrying sign for China, as the Chinese side
needs to further increase its efforts to protect both its people and its trade. Since that
attack, China, along with Myanmar, Thailand, and Laos conduct joint patrols along
the Mekong River to monitor any potential criminal activity.
To keep Thailand and other Mekong countries content, China tries to improve its
bilateral relations with Thailand within the LMC framework while building and promot-
ing certain norms and discourses to dispel the suspicion of Chinese hegemony in the
Mekong.
First, building stronger ties with Thailand reduces barriers in operating the LMC
under China’s guidance. In 2019, Lyu Jian, China’s Ambassador to Thailand, highlighted
various cooperation areas, such as water resource management, e-commerce, and cross-
border trade that exist in the LMC framework. He also pointed out the future possibility
of cooperation in areas such as agriculture, vocational training, youth exchanges, health-
care, and environment protection (Bangkok Post 2019a ). The actual amount of financial
investment into these programs remains undisclosed. In early 2020, Chinese Foreign
Minister Wang Yi expressed China’s intention to collaborate with Thailand’s
ACMECS during the 5th LMC Foreign Ministers’ Meeting in Laos. Regarding the
ACMECS, it appears that China is working with it to advance China’s own interests.
In other words, China has a better chance of advancing itself by being a member of
ACMEC than not being a member.
Second, China promotes discourses like ‘win-win cooperation’ within the LMC.6
Regarding the LMC, China aims to convince members that the institution is not solely
dominated by China and that it should be viewed as a concerted effort by all
members. This is something that the Chinese government has aimed to do in various
speeches regarding the LMC. Chinese Premier Li Keqiang, who proposed creating the
LMC, assures that ‘the LMC is equal, inclusive and practical’ (quoted in Ministry of
Foreign Affairs 2018). Without directly mentioning the names of the existing mechan-
isms in the region, Chinese Foreign Minister Wang Yi stated that ‘Compared with
other Mekong River cooperation mechanisms, the LMC better meets the six countries’
practical needs, pays more attention to the advancement of specific projects and better
embodies relevant countries’ wish of equality, mutual assistance and win-win
cooperation’ (quoted in Permanent Mission of the People’s Republic of China to the
UN 2017). He also added that, the LMC ‘should not be a superb talking shop, but a
grounded bulldozer’ (quoted in Permanent Mission of the People’s Republic of China
to the UN 2017).
Not all Mekong countries, however, accept China’s position on this. Instead, various
countries, such as Thailand and Vietnam, which are the two main players in the Mekong,
view China’s actions in the Mekong, and China’s LMC, with concern. Moreover, in terms
of how the LMC may evolve, the more China increases its institutional influence, the
more outside powers will aim to do the same. Thus, the future will be intense institutional
 AUSTRALIAN JOURNAL OF INTERNATIONAL AFFAIRS 333

competition, namely between the US and China and Japan and China in the Mekong.
During the launching of the Mekong-US Partnership in mid-2020, the US pledged
$153 million to Mekong countries, which covers various areas of cooperation, such as
connectivity, energy security, water resource management, and other areas (Nguyen
2020). Moreover, the US recently imposed sanctions on a Chinese company (Union
Development Group) operating in Cambodia, for the US accused that company of
environmental degradation and corruption. The US stated that it was, in contrast to
China, standing with the people of Cambodia and concerned about the environment
in the country. If Mekong countries do not take US concerns seriously, a similar
pattern could happen, with the US aiming to limit China’s actions regarding Mekong
issues.
For discourses to be accepted and implemented, the institutional members must reach
a consensus on what norms should be created. Even though China is the most powerful
member, it still relies on its economic and ideational ability to persuade members to agree
upon certain arrangements. The Chinese concept of ‘a community of shared future for
mankind’ has been well articulated and promulgated by Chinese Premier Li Keqiang
during the 2018 LMC summit in Phnom Penh, Cambodia. In addition, Li Keqiang
claims that ‘the six Lancang-Mekong countries are a community with a shared future
that enjoys geographic proximity, people-to-people and cultural similarity and shared
river’ (quoted in Ministry of Foreign Affairs 2018).
In addition to the appearance of these concepts in the speeches of Chinese leaders,
similar visions and concepts that fall within the 3+5 cooperation framework are also
well articulated in the three important documents: the Sanya Declaration, the Phnom
Penh Declaration, and the Five-Year Plan of Action on Lancang-Mekong Cooperation
(2018–2022). The first document was adopted during the first LMC Leaders’ Meeting
in March 2016 in the Chinese city of Sanya. The document outlines 26 measures that
need to be implemented as agreed by the LMC members. One noticeable statement of
this document is the emphasis on making the LMC a ‘new type of international relations’
that features ‘win-win cooperation’. The second document was adopted in January 2018
during the second LMC Leaders’ Meeting in Phnom Penh. That document reiterates the
key points of the Sanya Declaration. The third document lays out the working mechan-
isms with the aim to institutionalise the framework of the LMC. Similar to the first docu-
ment, the third document also mentions the phrase ‘new type of sub-regional
cooperation’ that is ‘inspired by South-South Cooperation’.
These concepts (e.g. “win-win”) are not a novelty in Chinese foreign policy. Speaking
in Moscow in 2001, then Chinese President Jiang Zemin used the term ‘new type of state
relations.’ Meanwhile, China’s current President, Xi Jinping, used the term ‘new type of
great power relations’ during his trip to the US in 2012. Essentially, these concepts are
used to describe the relationship between China and the other two major powers—the
US and Russia. But what can be learned and applied in the case of the LMC is the
Chinese intention to go beyond great power relations. With this in mind, China
wishes to present itself as a responsible and benign major power that does not intend
to use its overwhelming power to coerce the downstream countries. However, the
degree to which adheres to its own professed claims remains to seen. China’s goal
with its LMC is a China-led order in the Mekong, as China directs the LMC with its
own funded projects. This is very similar with China’s BRI and thus there are parallels
334 S. PO AND C. B. PRIMIANO

between China’s LMC and BRI, for China is the essential country in directing the major
initiatives of the LMC and BRI.
Even though these concepts mentioned in the paragraph above lack meaningful sub-
stance (see Zeng 2016), China, with these discourses, hopes to promote three norms: no
conflict or confrontation, mutual respect, and mutually beneficial cooperation (Li and
Wu 2014). The first point means that each Mekong country should not resort to
conflict or confrontation as a way of resolving problems. The second point means any
provocation by forming alliances with either internal and/or external actors is not pre-
ferred by China and should not be encouraged. For the third point, each Mekong
country should work hand in hand to strengthen the LMC so that they will benefit.
These three points are interconnected. For example, the conflict over water usage
initiated by Mekong countries can do harm to China in two fundamental ways. First,
it ruins the publicly stated collective spirit of cooperation that the Chinese government
has sought to advance since the creation of the LMC. In contrast to what the Chinese
government states in public, if China is not at the centre of leadership, China is not
able to set rules and agenda that are favourable to its own preference. Second, the
water dispute is an opportunity for the external powers to intervene. This possible inter-
vention will further complicate the situation and risk escalating the dispute to a higher
level. Moreover, the future trajectory of the LMC will remain uncertain. As the most
powerful state that enjoys massive benefits of the hydro dams, the promotion of these
norms will help China create its own sphere of influence.

The exclusive institutional balancing of LMC

Through the LMC, China, as of the time of writing, has not expressed any intent to
welcome the external players into the LMC. The US, Japan, India, South Korea and Aus-
tralia are all essential to the development of the Mekong region. Yet, these countries have
not received any invitation to become an official member or an observer of the LMC. The
involvement of other powers in the Mekong region further complicates China’s goals for
the region. For example, China has to agree to an agenda sharing power if other players
get involved. While smaller members have less leverage and thus may not demand to have
more of a voice in how the LMC should be run, major powers such as the US and Japan
may insist on putting certain topics on the agenda to be discussed. For instance, while
China avoids discussing the water sharing arrangement with LMC members, the US
and Japan may insist that such a topic is mandatory. This situation would weaken
China’s institutional power and, in return, threaten its interests and influence.
Various PRC scholars observe that China does not want external powers to have a
major role in the Mekong. As Shengmin Cui (2018, 22) puts it, ‘But from the perspective
of China, the competition with the great powers in the subregion poses a challenge to
China’s politics, economy, and security.’ Another Chinese scholar, suspicious of US
intentions in the Mekong region, warns that ‘China’s interests and influence in the
Mekong region would be adversely affected by the U.S.’s increasing engagement with
the Mekong states … ’ (Nian 2019). Xue Gong (2020) echoed that in terms of the trans-
boundary water governance issue, ‘Beijing does not want external parties to get involved.’
Even if this is the case that China has no intention to welcome external players,
ASEAN is a different case. China has consistently expressed its intention to collaborate
 AUSTRALIAN JOURNAL OF INTERNATIONAL AFFAIRS 335

with ASEAN regarding Mekong issues. In contrast to working with the US, Japan, India,
South Korea, and Australia, China does not receive any push back from ASEAN states
regarding issues of democracy, human rights, or other issues that it is unwilling to
cooperate on. Moreover, with the ‘ASEAN Way,’ namely, consensus-based agreements,
this prevents any ASEAN state seeking to do what it wants. In short, China prefers to
work with ASEAN than work with the previously stated countries regarding Mekong
issues, as China knows that ASEAN will not be able to limit China or gain the upper
hand with China in the Mekong. Put differently, ASEAN does not challenge China in
the Mekong. ASEAN, however, has never devoted significant attention to Mekong
issues.7 Despite this Chinese claim of its willingness to work with ASEAN, China still
pursues an exclusive balancing strategy. ASEAN is not a target of China’s exclusive insti-
tutional balancing strategy.
To keep external powers out is not an easy task. China needs to ensure that the LMC
benefits not just China but also its Mekong members. This requires significant economic
capability to run the LMC. China has magnified the scope and expedited the LMC (see
Figure 1). As briefly noted above, the LMC is far greater and bigger than the existing
competing mechanisms. For instance, in its first inception in 2016, China offered $300
million, and in 2018, China made another pledge to offer $1.1 billion to the LMC
Special Fund. In stark contrast to China’s $1.1 billion, the US pledged $29.5 million
for the joint collaboration with Japan to develop a regional electricity grid and $14
million to fight transnational crime and trafficking under the framework of the LMI.
The US-Mekong Partnership, which is upgraded from the LMI, has a budget reserve
of $153 million from the US. In 2018, the total available funding for the MRC was $21
million. For the ACMECS Fund, Thailand pledged to provide $200 million, the other
members (Laos, Cambodia, Myanmar and Vietnam) would offer $100 million, and the
other donors (the US, Japan, South Korea and Australia) would provide $200 million.
The combination, therefore, will be $500 million as a reserve fund from 2019 to 2024.
Therefore, China’s colossal economic power may potentially induce the members of
the LMC to favour China more than the others.

Figure 1. The LMC projects.

336 S. PO AND C. B. PRIMIANO

To facilitate and implement these projects, the LMC has four levels of working mech-
anisms: the specific sector working group level, the senior ministers’ level, the foreign
ministers’ level, and the leaders’ level. Each level works to provide policy advice to the
leaders’ level, which is the decision-making stage. All proposed projects are finalised in
this leaders’ level. Among all these projects and initiatives, the LMC Special Fund
appears to be the most important supporting body that reserves funding for LMC
members. During the first LMC summit, China pledged to offer $300 million to the
LMC Special Fund. The Fund covers many areas of development, such as infrastructure
and logistics, e-commerce, special economic zones, tourism, agriculture, education, ICT,
and water resources. In early 2019, Cambodia received $7.66 million, covering 16 pro-
jects, Laos received 21 projects with an undisclosed amount of funding, and Myanmar
received $7.37 million, covering 19 projects under the LMC Special Fund (Xinhua
News 2019).
However, while not including the existing mechanisms in its framework, the LMC
does work in collaboration with the MRC on water governance issues. One centre—
Lancang-Mekong Water Resources Cooperation Center— works closely with the MRC
to discuss issues such as information and data sharing and better communication oper-
ations. Furthermore, the LMC also expresses its intent to welcome funding from the
Asian Development Bank (ADB). Even though the LMC wishes to work with relevant
institutions, it does not mean that China will shy away from its exclusive balancing
policy. This cooperation rhetoric of the LMC should be seen in the context of the con-
tinuity of China using the MRC and further legitimising itself by working with others.
The more China works with the existing institutions, especially the MRC, the more legit-
imate China could claim to be in terms of dam constructions and operations. But so far,
there is no rhetoric or formal invitation to invite all of the existing institutions to become
official members of the LMC.
The purpose of an exclusive balancing strategy is to keep the external players out. This
should result in either other players reducing the intensity of their engagement, or
Mekong countries relaxing their interaction with those players. But this is not the
case. As China intensifies the activities of the LMC, the US and Japan continue to
boost their engagement with the Mekong region. As noted above, the US upgraded its
LMI to the U.S.-Mekong Partnership (UMP) in September 2020, which covers various
projects (e.g. infrastructure building, energy, water governance, etc.). In 2020, US Assist-
ant Secretary of State David Stilwell called on Mekong countries to ‘hold the Chinese
Communist Party accountable’ for all the damages China has caused to the Mekong
region. While taking a less confrontational stance, Japan has also increased its engage-
ment with the Mekong (2020). During the 11th Mekong-Japan Summit Meeting, the
Mekong countries and Japan adopted ‘The Mekong-Japan Initiative towards SDGs for
2030’. The issue of water resource management was also highlighted in this document.
While Mekong countries acknowledge the significant contribution of the LMC, they
also continue to embrace the US and Japan and even encourage them to play active
roles in the region development, for Mekong countries want to maximise what they
can from all major powers. Even Laos and Cambodia who are thought to be the
closest allies of China in Southeast Asia, embrace the US and Japan to have a more
active involvement in the region regarding development issues. For example, Cambodian
Foreign Minister Prak Sokhon called on the US to ‘expand the scope of cooperation’ to
 AUSTRALIAN JOURNAL OF INTERNATIONAL AFFAIRS 337

‘produce tangible and impactful outcomes for the region and its people’ (Fresh News
2020). This is the complex balancing strategy that Mekong countries employ to engage
all powers and play them off against each other.

Conclusion
In recent years, the Chinese government has aimed to advance its influence in world poli-
tics by creating international organisations, such as the AIIB and, for our case here, the
LMC, and other major initiatives as well, e.g. BRI. Despite this attempt, we do not see
China being successful in pulling off countries in the Mekong into its orbit completely.
This demonstrates that China still has a long way to go in terms of advancing its
objectives.
We have argued that China has yet to achieve its balancing objective, as most LMC
members are not willing to exclusively side with China. LMC states want to engage all
major powers to maximise what they can in terms of improving conditions along the
Mekong, such as water flow, the environment, dam issues, etc. For example, Cambodia
and Laos work with both the US and Japan on Mekong issues. But on other issues, such as
security and economics, Cambodia and Laos side with China exclusively. Whereas
Vietnam and Thailand are hedging, such states do not put up obstacles to the LMC.
Vietnam and Thailand are not content with China’s dams along the Mekong, but
Vietnam and Thailand go along with China’s LMC because of their limited options
overall—it is either join the LMC or not. Thus, both Thailand and Vietnam chose to
join the LMC to get whatever they can out of it. If Thailand and Vietnam did not join
the LMC, it would have a negative impact overall on their ties with China, as they
would be going against China’s wishes.
Therefore, China’s LMC has been moving along and there are significant implications
of the LMC on the regional order. As Chinese power has evolved and shifted in its favour,
the LMC will potentially gain more power and influence. Whether other initiatives and
institutions still survive or die in the long run remains an open question. This may
depend on two factors: the willingness of member countries and the willingness of the
funders. If these conditions still exist, the institutional competition between China and
other powers persists. Given the anarchic structure of the international and regional
system is anarchic, the question remains whether the current competition evolves into
an intense scenario that Mekong countries are forced to choose between China and
other powers. It depends mostly on the bigger players such as China, the US and
Japan that have more influence over affairs in the region. As the case of
Cambodia demonstrates, Mekong countries seek to maximise what they can from exter-
nal powers and try to eschew a zero-sum scenario. The way forward for Mekong
countries is to keep the status quo of the current institutional rivalry so that
such countries could exploit the opportunities presented.

Notes
1. For example, the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic
Cooperation (BIMSTEC), the LMC, the MGC, and so on.
338 S. PO AND C. B. PRIMIANO

2. Johnston defines socialization as ‘the process through which identities are constituted
through social interaction.’ (2008, 43).
3. The original countries of the Shanghai Five were China, Russia, Kazakhstan, Tajikistan, and
Kyrgyzstan. It then evolved into the Shanghai Cooperation Organization (SCO) in 2001.
4. Myanmar is a dialogue partner.
5. Among the five Mekong countries, Thailand and Vietnam are the ones with the strongest
security ties with the US.
6. China frames its actions very much in the same way that it frames the BRI, as a win-win for
all involved.
7. Mekong issues, such as the Chinese dam constructions, drought, and the declining fish
stock, were only seriously discussed in the ASEAN Summit Meeting of 2020 only recently
when Vietnam was the chairman of ASEAN.

Acknowledgements
We would like to thank Professor Kai He, two anonymous reviewers, and the editors for their sug-
gestions in strengthening the article.

Disclosure statement
No potential conflict of interest was reported by the authors.

Notes on contributors
Sovinda Po is a PhD candidate in International Relations at Griffith University, Australia and a
Research Fellow at the Cambodian Institute for Cooperation and Peace. His articles have appeared
in Journal of Current Southeast Asian Affairs, European Journal of East Asian Studies, Asian
Studies Review, Issues & Insights (Pacific Forum), and Journal of Greater Mekong Studies. He
is also a regular contributor to the Interpreter, the Diplomat, East Asia Forum, and Australian
Outlook. His research interest centres around the relationship between China and mainland
Southeast Asia.
Christopher B. Primiano is an assistant professor of international relations at KIMEP University in
Kazakhstan. Chris’ research focuses on Chinese domestic and international politics. His articles
have appeared in Journal of Chinese Political Science, Peace Economics, Peace Science and
Public Policy, East Asia, Asia Pacific Journal of Sport and Social Science, International Politics,
Journal of Current Southeast Asian Affairs, European Journal of East Asian Studies, Central
Asian Survey and Journal of Muslim Minority Affairs.

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