The International Spectator

Italian Journal of International Affairs

ISSN: 0393-2729 (Print) 1751-9721 (Online) Journal homepage: http://www.tandfonline.com/loi/rspe20

Watershed or Powershed? Critical Hydropolitics,

China and the ‘Lancang-Mekong Cooperation
Framework’

Carl Middleton & Jeremy Allouche

To cite this article: Carl Middleton & Jeremy Allouche (2016) Watershed or Powershed? Critical
Hydropolitics, China and the ‘Lancang-Mekong Cooperation Framework’, The International
Spectator, 51:3, 100-117, DOI: 10.1080/03932729.2016.1209385

To link to this article: http://dx.doi.org/10.1080/03932729.2016.1209385

Published online: 14 Oct 2016.

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The International Spectator, 2016
VOL. 51, NO. 3, 100–117
http://dx.doi.org/10.1080/03932729.2016.1209385

Watershed or Powershed? Critical Hydropolitics, China and

the ‘Lancang-Mekong Cooperation Framework’
Carl Middletona and Jeremy Alloucheb
a
Chulalongkorn University, Bangkok; bUniversity of Sussex

ABSTRACT
The countries sharing the Lancang-Mekong River are entering a new KEYWORDS
era of hydropolitics with a growing number of hydropower dams Powershed; hydropolitics;
throughout the basin. Three ‘powersheds’, conceptualised as physical, Lancang-Mekong River
institutional and political constructs that connect dams to major power
markets in China, Thailand and Vietnam, are transforming the nature–
society relations of the watershed. In the process, new conditions
are produced within which the region’s hydropolitics unfold. This is
epitomised by the ‘Lancang-Mekong Cooperation’ framework, a new
initiative led by China that proposes programs on both economic
and water resource development, and anticipates hydrodiplomacy
via China’s dam-engineered control of the headwaters.

Since the early 1990s, the Lancang-Mekong1 River has been transformed from a free-flow-
ing river to one that is increasingly engineered by large hydropower dams. In 1992, China
commissioned the Manwan Dam, the first of six large hydropower dams built unilaterally
on the Lancang River mainstream in Yunnan province. To date, in the lower Mekong basin,
almost sixty medium or large hydropower dams are in operation, with over twenty more
under construction, including the Xayaburi Dam and Don Sahong Dam on the Mekong
River’s mainstream in Laos. Hydropower construction is taking place in a context of deep-
ening regional economic integration, where electricity is traded across regions, for example
from Yunnan province to southeast China, and across borders, from Laos to Thailand and
Vietnam.2
The growing influence of this ‘powershed’ over the watershed has unsettled the institu-
tional landscape. In 1995, the governments of Cambodia, Laos, Vietnam and Thailand jointly
established the Mekong River Commission (MRC) in order to strengthen transboundary
water governance, especially from a watershed perspective. However, since its creation, the
MRC has faced a number of challenges, including that China has maintained a distanced
‘dialogue partner’ relationship with it; it is largely funded by Western donors rather than
the countries themselves; it has struggled to ensure citizen participation; and it has been

CONTACT  Carl Middleton  Carl.Chulalongkorn@gmail.com

1
“Lancang” is the name of the Mekong River in Chinese.
2
Middleton and Dore, "Transboundary Water and Electricity Governance”.
© 2016 Istituto Affari Internazionali
 The International Spectator   101

largely marginalised from the Asian Development Bank-backed Greater Mekong Subregion
(GMS) program for regional economic integration.3
In this context, the endorsement of the Lancang-Mekong Cooperation (LMC) framework
in March 2016 by leaders from China, Myanmar, Thailand, Cambodia, Laos and Vietnam
at a summit in Sanya City of Hainan Province, China, is significant. Principally champi-
oned by China, and with Thailand’s strong backing, the LMC commits the six countries
to cooperation in five priority areas, including economic integration and water resource
management. The LMC is a significant new initiative when considered in relation to the
deepening economic and geopolitical relationship between China and mainland Southeast
Asia,4 and China’s interest in counterbalancing other regional initiatives by major powers,
including the United States and Japan. It is also significant given the existing shortcomings
of the MRC, and the degree of control that China now possesses over the Lancang-Mekong
River’s headwaters with implications for (future) transboundary hydropower cascade coor-
dination, and (potential) flood and drought hydrodiplomacy.
Building on Darrin Magee’s concept of “powersheds”,5 the article takes a critical hyd-
ropolitics perspective, considering the wider political economy of water and electricity as
a transboundary set of state, private and civil society interests.6 Defining a powershed as a
material, institutional and political construct linking electricity generation to load centres,
we show how three broad powersheds originating in the load centres of southeastern China,
Thailand and Vietnam articulate with the Lancang-Mekong River and its watershed. In the
process, the river’s material properties as well as nature-society relations are transformed
at scales ranging from the local to the transboundary. Alongside the region’s government
agencies responsible for power planning, we identify the influential role of private-sector
project developers and financiers, given the partial liberalisation of the region’s power sector
over the past two decades.7 We propose that the relationship between the now established
powersheds and the transformed materiality of the Lancang-Mekong River is a defining
feature of the region’s new hydropolitics.
The article is structured as follows. In the next section, the concept of powersheds is
introduced and recent writing on hydropolitics, in particular on the Lancang-Mekong
basin, briefly reviewed. Then, the three powersheds spanning across the Lancang-Mekong
basin are mapped, and each powershed’s political economy analysed. Following this, a
brief assessment of how these powersheds are transforming nature-society relations in the
Lancang-Mekong basin is provided, focusing on hydrology and fisheries. In the second half
of the article, the geopolitics and critical hydropolitics of the LMC are analysed in light of
the nexus between powersheds and transforming nature-society relations.

A critical hydropolitics of the Lancang-Mekong ‘powershed’

There is a rich tradition of hydropolitics analysis in the Lancang-Mekong basin, within
transforming geopolitics that span the “…sweep of US hegemony, Cold War, regional

3
Hirsch and Jenson, “National Interest and Transboundary Water Governance”.
4
Renwick, “China as a Development Actor”.
5
Magee, “Powershed Politics”.
6
Bakker, “The Politics of Hydropower”; Sneddon and Fox, "Rethinking Transboundary Waters”.
7
Merme et al., “Hydropower Financing in the Mekong Basin".
102    C. Middleton and J. Allouche

rapprochement and the rise of China…”.8 Karen Bakker’s seminal study traces the region’s
transition from “battlefield to marketplace” in the 1990s, which spans the creation of both
the MRC and the GMS program.9 She reveals early discursive strategies that sought to nat-
uralise the ‘watershed’ for regional economic development, and the growing significance of
private capital in hydropower development. More recently, Hirsch shows how the ‘Mekong’
itself has gone through ontological changes from that of “a shared river to a territorially
delimited basin, to a wider zone of liberalized economic activity binding national econo-
mies across borders, to a zone of less licit border crossing, and to an arena of contestation
over hydropower…”.10
Sneddon and Fox argue for an interdisciplinary critical hydropolitics of the Lancang-
Mekong basin with an analysis of multiple state and non-state actors across scales and within
formal and informal transboundary governance arrangements.11 Other studies affirm the
need to consider the role of private-sector actors and corporatised state-owned enterprises,
new models of public-private partnership project finance, the role of civil society, and the
role of the partially liberal/illiberal state.12
Magee, studying the Lancang River dams, proposed the concept of powershed to refer
materially to how hydropower dams concentrate water resources, convert them to electric-
ity, and transmit this electricity to large load centres.13 The patterns of electricity demand
in distant urban areas are key determinants of how dams are operated, in turn remak-
ing the river’s hydrology, ecology, and nature-society relations, most intensely nearby to
the hydropower dam, but also at further distances, including at the transnational scale.14
Powersheds are discursively and ideationally produced through the projection of political
and economic power over space, including through the institutions that govern electricity
and water resources, and the discourses and the ideas that they convey that serve to legit-
imise or delegitimise particular river basin development pathways.15
The production of powersheds can be contextualised to the notion of river basin trajec-
tory, defined as “the long-term interactions between societies and their environments, with
a focus on the development and management of water and associated land resources”.16
Wester refers to this human intervention in the hydrological cycle as the production of a
hydro-social cycle.17 Nowhere is this production more apparent than through the planning,
construction and operation of a large hydropower dam, which involve the production
and flows of discourses, finance, knowledge, technology and traded electricity, and the
inter-coupling of social-ecological-technological systems.18 These transformations inevitably
impact existing local-scale activities in riverside villages that have long been sustained by
a relationship with the river.19

8
Hirsch, “Changing Political Dynamics of Dam Building”, 312.
9
Bakker, “The Politics of Hydropower”; see also Wong, “Making the Mekong”.
10
Hirsch, “Shifting Regional Geopolitics”, 720.
11
Sneddon and Fox, “Rethinking Transboundary Waters”; see also Hensengerth, "Where is the Power?”.
12
Middleton et al., “Old and New Hydropower Players”; Merme et al., “Hydropower Financing in the Mekong Basin"; Hirsch,
“Changing Political Dynamics of Dam Building”; and Barney, "Locating 'Green Neoliberalism'”, respectively.
13
Magee, “Powershed Politics”.
14
Baird and Quastel, “Rescaling and Reordering Nature–Society Relations”; Obertreis, et al. “Water, Infrastructure and Political
Rule”.
15
See also Ptak and Hommel, “Trans-Political Nature of Energy Conduit”, for an analogous concept of ‘energy conduits’.
16
Molle and Wester, “River Basin Trajectories”, 1.
17
Wester, “Shedding the Waters”.
18
Kaisti and Käkönen, “Actors, Interests and Forces”;
19
Santasombat, The River of Life.
 The International Spectator   103

The production of powersheds

Across mainland Southeast Asia and southern China, electricity demand is rising. Total
power production increased from 26,126 megawatts (MW) in 2000 to 116,070 MW in
2015.20 By far, the region’s three largest power markets are Thailand, Vietnam and southern
China. Aside from meeting their demand through domestic sources, electricity planners
are looking towards electricity imports from neighbouring Laos, Cambodia and Myanmar,
primarily from large hydropower dams.
The Lancang-Mekong River’s massive hydropower potential, estimated to be 25,500
MW on the Lancang21 and over 30,000 MW on the lower Mekong River,22 has drawn the
imaginations of engineers and economic planners since at least the 1950s.23 The earliest
hydropower projects were built in Northeast Thailand in the 1960s and 1970s with the
support of USAID and the World Bank. Yet, today, relative to neighbouring countries,
Thailand’s domestic hydropower within the basin is small (244 MW), as Thailand now
imports over 2,100 MW from Laos. It has been China’s construction on the Lancang River
since the early 1990s that has heralded a new era of regional hydropolitics, with six large
dams now in operation (Figure 1).24 These dams primarily export their electricity to China’s
industrial eastern seaboard.25 Vietnam, meanwhile, has constructed at least twelve large
dams domestically within the Mekong basin on the Sesan and Sekong Rivers, and has also
imported electricity from China since 2004, from central Laos since 2009, and will import
from Southern Laos from 2016. Reflecting this growing power trade, in Laos there is a major

30000

25000
Megawatts (MW)

20000

15000

10000

5000

0
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
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2020

Year
Thailand Cambodia Laos Vietnam China

Figure 1.  Cumulative hydropower generation capacity in the Lancang-Mekong Basin. Data for lower
Mekong basin from MRC, Hydropower Sector Review, and RPTCC, “Country Presentations from 19th
Meeting”. Updated for Laos from www.poweringprogress. Updated for Vietnam from Grimsditch, 3S
Rivers Under Threat. Updated for Lancang dams from https://en.wikipedia.org/wiki/Hydropower_in_
the_Mekong_River_Basin and https://www.internationalrivers.org/campaigns/mekong-lancang-river.

20
RPTCC, “Country Presentations from 19th Meeting; ADB, Greater Mekong Subregion Power Trade; See supplementary
article material at http://csds-chula.org/watershed-or-powershed
21
Magee, “Powershed Politics”.
22
MRC, State of the Basin Report 2010.
23
Middleton et al., “Old and New Hydropower Players”.
24
Hirsch, “Changing Political Dynamics of Dam Building”.
25
Magee, “Powershed Politics”.
104    C. Middleton and J. Allouche

Figure 2.  Large hydropower dams in operation, under construction and planned in the Lancang-Mekong
Basin. Source: Published with permission of Towards Ecological Recovery and Regional Alliance (TERRA).
http://www.terraper.org/web/en/node/1776Eup
 The International Spectator   105

hydropower construction boom with over three-quarters of its existing 5,560 MW capacity
for export.26 Cambodia, meanwhile, is currently constructing one large hydropower project
on a major tributary to the Mekong River, the 400 MW Lower Sesan 2, with plans for several
more within the Mekong basin and more outside of it (Figure 2).
Thus, three broad powersheds can be identified spanning the Lancang-Mekong watershed
in relation to the region’s major power markets (Figure 3): from the Lancang River in Yunnan
Province to China’s southern and eastern industrial seaboards; from the Mekong’s mainstream
and tributaries in Laos, and to a lesser extent Northeast Thailand, to Thailand’s major urban
centres; and from Southwestern China to Vietnam’s northern power system, from Northern
Laos to Vietnam’s central system, and from the major Mekong tributaries of Vietnam’s central
highlands, and soon Southern Laos, to Vietnam’s southern electricity system.
Powersheds, evident in the form of large hydropower dams and transborder transmission
lines, are not only material constructs but also political ones. They are produced through
the relationships, discourses and practices of regional institutions and domestic and trans-
national state and non-state actors. Thus, it is to the political economy of powersheds that
we now briefly turn. We emphasize the implications of the power sector’s liberalisation, the
proliferation of public-private partnerships in hydropower dam construction, and the roles
of state, private and civil society actors.

China

Myanmar

Laos
Thailand Vietnam
Cambodia

Figure 3.  Powersheds of the Lancang-Mekong basin

Adapted from base map by Pfly (Own work) [CC BY-SA 2.5 (http://creativecommons.org/licenses/by-sa/2.5)], via Wikimedia
Commons.

26
RPTCC, “Country Presentations from 19th Meeting”.
106    C. Middleton and J. Allouche

The role of regional institutions

Since the early 1990s, the Asian Development Bank (ADB) has promoted regional power
trade under its GMS program, building on past developmentalist visions of hydropow-
er-fuelled regional economic growth that have in fact existed since the 1950s.27 Key mile-
stones include an ADB-backed Inter-Governmental Agreement on Regional Power Trade
in the GMS, signed by the region’s leaders in November 2002, and a GMS Roadmap for
Expanded Energy Cooperation launched in 2009.28 The ADB argues that regional power
trade would enable Thailand and Vietnam – and in the future Southern China – to meet
their growing electricity demand, whilst for Laos, and in the future Myanmar, power
exports would generate state revenues and attract foreign direct investment. Meanwhile,
for Cambodia, in the short term, power imports from Vietnam would reduce the cost of
electricity in Cambodia and, in the long term, the transmission infrastructure built would
allow Cambodia to sell electricity to Vietnam as Cambodia builds its own large dams.
This vision, however, has been critiqued by civil society, reflecting a growing ‘eco-politics’
across the region that has significantly shaped development discourse since the 1990s.29 At
first, the ADB treated the regional power grid largely as a technical planning exercise by
the governments, and there was little formal public participation.30 As the power trade plan
was subject to growing scrutiny, however, more recently the ADB has partly acknowledged
its associated environmental and social impacts, for example commissioning a strategic
environmental assessment for the energy sector.
The second key regional institution, introduced earlier, is the intergovernmental Mekong
River Commission. Yet, a significant disjuncture has existed between the MRC and the GMS
since their formation in the early 1990s.31 Several ADB GMS projects in the 1990s and early
2000s that directly related to the MRC’s mandate essentially marginalised it, including various
tributary dams such as the Theun Hinboun and Nam Theun 2 Dams in Laos, as well as China’s
river navigation project, which has involved blasting rapids and dredging on the Lancang
River. Meanwhile, the MRC has produced a Basin Development Plan, yet has struggled to
coordinate with strategies of economic regionalisation, including under the ADB’s GMS pro-
gram.32 Energy ministries and dam developers have considered the MRC more a hurdle to
be overcome or circumvent than an organisation that would be an ally in their plans. Hence,
coordination between the MRC and the ADB’s GMS program on electricity trade is weak,
and transboundary governance between watershed and powershed fragmented.33

China’s powershed
Large hydropower dam construction in Yunnan Province has been fundamentally shaped
by the Western Region Development Strategy (2000-20). This policy of China’s central gov-
ernment has supported dam construction in Yunnan to transmit electricity to China’s indus-
trialised southeastern seaboard, where demand is high and resources to produce electricity

27
Wong, Making the Mekong.
28
ADB, Greater Mekong Subregion Power Trade.
29
Hirsch, “Changing Political Dynamics of Dam Building”.
30
Middleton et al., “Old and New Hydropower Players”.
31
Hirsch and Jenson, “National Interest and Transboundary Water Governance”.
32
Hirsch, “Shifting Regional Geopolitics”.
33
Middleton and Dore, “Transboundary Water and Electricity Governance”.
 The International Spectator   107

insufficient. The strategic aim is for the electricity trade to generate revenue for Yunnan
Province, and thus reduce poverty there.34 To date, six large dams export over 12,000 MW
of power eastwards.35 It is this material, discursive and political relationship that led Magee
to conceptualise Yunnan Province as the “powershed of Guangdong”.36
During this period, China’s electricity industry was also undergoing profound reform.
In 2002, the absolute state monopoly of the State Power Corporation was restructured into
two large state power-grid companies, and five state-owned power generation companies
(the “big five”). The latter were to compete alongside private and other state-owned inves-
tors in generation. Dore et al. argue that an increasingly competitive environment between
power companies, and the introduction of for-profit motives, accelerated the exploitation of
Southwest China’s hydropower resources.37 The Lancang River cascade is now operated by
the Huaneng Lancang River Hydropower Corporation, whose ownership includes Huaneng
Company (the largest of the “big five”) and the Yunnan Investment Corporation (owned by
the Yunnan Provincial Government). Magee, whilst noting that decision-making processes
are “vastly complex” for individual projects and for basin-level planning, also argues that
“[energy] enterprises [in China] retain various degrees of political motivations, and their
role as influential third parties in decision-making processes … must not be overlooked.”38
Over the past two decades, political space for civil society in China has expanded and
then contracted. In this context, civil society sought to protect Yunnan’s rivers from large
hydropower dams.39 Challenging, early campaigns achieved a relative measure of success,
for example conducting a Social Impact Assessment on the Manwan Dam by the NGO
Green Watershed in 2002, and the postponement of the Nu River dam cascade.40 Since the
Arab Spring, however, political space has tightened, for example with the passing in April
2016 of the Overseas NGO Management law.
It is of note that China’s anticipated role within regional power trade has significantly
changed. In the early days of the GMS, Yunnan Province, similar to Laos, intended to export
electricity to mainland Southeast Asia.41 However, rapid growth in domestic demand has
re-orientated it instead to seek power imports from Laos and Myanmar, in the process
expanding its powershed into the Mekong basin (and beyond in the case of Myanmar).
Whilst at present, China exports approximately 70 MW of electricity to Laos, an agreement
in 2015 plans that it will in future export up to 3000 MW.42 Chinese private and state-owned
companies are developers and financiers of tens of large dams in Laos, Cambodia and
Myanmar, including the planned power import projects to China.43

Thailand’s powershed
Since the 1950s, including through the period of rapid industrialisation in the 1980s,
Thailand’s electricity system was a monopoly dominated by its state-owned electricity utility,

34
Dore et al., “China’s Energy Reforms”.
35
RPTCC, “Country Presentations from 19th Meeting”.
36
Magee, “Powershed Politics”, 23.
37
Dore et al., “China’s Energy Reforms”.
38
Magee, “Powershed Politics”.
39
Han, “China’s Policymaking in Transition”.
40
Dore et al., “China’s Energy Reforms”.
41
Magee “The Dragon Upstream”.
42
RPTCC, “Country Presentations from 19th Meeting”.
43
Matthews and Motta, “China’s Influence on Hydropower Development”.
108    C. Middleton and J. Allouche

the Electricity Generating Authority of Thailand (EGAT). However, from 1992, a series of
economic crises and pro-business governments led to its gradual privatisation, such that at
present EGAT and the private sector generate approximately half each of the total system
capacity.44 Yet, several of the largest apparently private energy companies listed in Thailand
actually have major shareholdings by EGAT. This has raised concerns over conflicts of
interest.45
Electricity generation is currently dominated by natural gas (70%).46 However, Thailand
is increasingly looking towards hydroelectricity imports from neighbouring Laos, as well
as from Myanmar in the future. Drivers include: Thailand’s rising electricity demand and a
desire to diversify fuel mix; the influential role of Thai companies investing in power import
projects; and protests against new domestic power stations.47 Projecting its powershed into
Laos, Thailand at present imports over 2,100 MW from five large hydropower dams, and
is contracted to import from a further three large dams by 2019, with tens more projects
in the pipeline. All hydropower import projects from Laos are public-private partnerships
and involve at least one Thai company. Wyatt and others have argued that private interests
have been protected in Laos, while projects’ social and environmental impacts are regularly
externalised onto local communities.48 Baird and Quastel,49 for example, show how in the
case of the Nam Theun 2 Dam in Laos, which was commissioned in 2010 and exports elec-
tricity to Thailand, its contractual design prioritises the interests of the Thai energy system
and the project’s owners over tens of thousands of river-dependent villagers.
Thailand’s power planning and its implications for Laos have been contested by civil
society in Thailand, but less so in Laos due to the limited political freedom there. They
have argued that EGAT prioritises large fossil-fuelled and hydropower power stations over
energy efficiency, demand-side management, and renewable energy.50 Recently, there has
been a growing commitment by EGAT to the latter, although large projects remain EGAT’s
modus operandi.51

Vietnam’s powershed
Vietnam has witnessed rapid industrialisation and economic growth since its ‘Doi Moi’
economic reform in 1986. To meet domestic demand, Vietnam has rapidly constructed
its domestic hydropower dams, alongside a growing number of fossil fuel plants and also
imported electricity from China. Dam development has been nationwide, including on
the Sesan and Srepok Rivers in Vietnam, which are major tributaries of the Mekong River
shared with Cambodia downstream, and with severe impacts in both countries.52
A process of partial privatisation has been underway since the early 2000s, with stated
goals of introducing market principles to electricity generation and reducing the debt of
Vietnam’s state utility, the Electricity Corporation of Vietnam (EVN).53 At present, EVN

44
EPPO, Thailand’s Power Development Plan.
45
Phongpaichit and Benyaapikul, Political Economy of Middle Income Trap.
46
EPPO, Thailand’s Power Development Plan.
47
Middleton, “Sustainable Electricity Transition in Thailand”.
48
Wyatt, “Infrastructure Development in Laos and Vietnam”.
49
Baird and Quastel, “Rescaling and Reordering Nature–Society Relations”.
50
Greacen and Greacen, Proposed Power Development Plan (PDP) 2012.
51
Middleton, “Sustainable Electricity Transition in Thailand”.
52
Wyatt and Baird, “Transboundary Impact Assessment”.
53
Brown, “Vietnam Power Needs Unresolved”.
 The International Spectator   109

generates just over half of total electricity capacity, with the remainder divided almost
equally between other state-owned enterprises and the private sector. As electricity demand
continues to grow, EVN plans continued domestic expansion of fossil fuel, nuclear and
renewables, as well as imports from new hydropower dams in Central and Southern Laos.54
Vietnam’s growing powershed into Laos builds upon the two countries’ close political
relationship since the second Indo-China War. Vietnam’s three operating hydropower pro-
jects in Laos are majority owned by Vietnam’s state-owned companies. Four more are immi-
nently planned in Central and Southern Laos. There is very little research about Vietnam’s
projects in Laos, but studies that do exist indicate limited concern for environmental and
social safeguards.55 In Vietnam, whilst NGOs are now increasingly commonplace, they
have struggled to influence power planning in the country, both for domestic projects and
power imports. Meanwhile, as mentioned above, within Laos there is far less space for civil
society critical of government plans.56

Powersheds transforming nature-society relations

In this section, we briefly outline some of the most significant changes that have occurred
or are anticipated to occur to hydrology and fisheries as dam construction proceeds. As
established in the previous section, these dams are embedded within and produced by
transboundary powersheds, understood as physical, institutional and political constructs.
In turn, these powersheds are transforming nature-society relations.
The Lancang-Mekong River’s hydrology is the product of the monsoonal climate within
which the river is located. During the rainy season, between June and November, eighty
percent of the river’s total discharge occurs. This ‘flood pulse’ is intimately integrated with the
river’s highly productive ecosystem and the lives of millions of people who depend upon it.57
As of 2008, the dam storage capacity of the total flow across the whole Lancang-Mekong
basin was less than two percent, but this could increase to twenty percent by 2030.58
Hydropower dams with large storage reservoirs store water in the rainy season, and release
it in the dry season. The associated hydrological changes are anticipated to produce both
positive and negative impacts, depending upon the perspective of the river user. Proposed
benefits include more water available for irrigation, navigation and hydropower production
in the dry season. Hydropower engineers also claim that the ability to regulate the river can
alleviate extreme drought and floods.59 Yet, negative impacts, to name a few, will be on wild
fisheries, wider river ecologies, and village-scale riverbank gardening, the productivity of
which depends on the flood pulse properties of the river.60
The Mekong River is home to one of the world’s most productive fisheries.61 The MRC
estimates that approximately two thirds of the population of the lower Mekong basin – 40
million people – fish at least part-time.62 Large hydropower dams are well documented to

54
Socialist Republic of Vietnam, Approval of the National Master Plan.
55
International Rivers, Impact of Rapid Dam Development.
56
Lintner, “Laos is Open for Business”.
57
MRC, State of the Basin Report 2010.
58
Kummu et al., “Basin-wide Sediment Trapping”.
59
Yu, “Water Resources Collaboration”.
60
MRC, State of the Basin Report 2010.
61
Baran et al., Values of Inland Fisheries.
62
MRC, State of the Basin Report 2010.
110    C. Middleton and J. Allouche

impact fisheries, by acting as a barrier to fish migrations, thus fragmenting spawning and
feeding habitats; changing riverbed habitats; and changing river water temperatures.63 These
changes have already been observed in the Mekong region, and will become increasingly
severe. For example, the International Centre for Environmental Management estimates that
from the large dams already under construction 16 percent of fisheries production will be
lost, but if all eleven dams proposed for the mainstream in Laos, Thailand and Cambodia
are built, this loss would rise to between 26 percent and 42 percent.64 Reduction in wild
capture fisheries would have negative implications for food security, with the poorest par-
ticularly vulnerable.
During the dry season, China’s contribution to the river’s total flow is particularly signif-
icant due to snowmelt from the glacial headwaters. Before major dam construction in the
late 1990s, China contributed ten percent of rainy season total flow, but 30 percent in the
dry season.65 A recent study found that the first six dams of the Lancang cascade now built
have a total storage capacity of 40 percent of the annual flow as of the lowest dam of the
cascade.66 The authors predict that the dams will increase the dry season flow by 34 to 155
percent, and decrease the rainy season flow by 29 to 36 percent by the time the river enters
Thailand. Whilst such control ensures relatively reliable electricity production in China,
it also cedes to China significant control over the river’s headwaters.67 Other downstream
river properties, such as sediment load, has been significantly affected,68 and riverside com-
munities report changes to local ecologies.69

The Lancang-Mekong Cooperation Framework

The Lancang Mekong Cooperation (LMC) is the most recent major transboundary initia-
tive which, by stated design, would have implications for the Lancang-Mekong basin, the
powersheds spanning it, and the people within it. In this section, we first outline the LMC
and its geopolitics, before considering its implications for the region’s hydropolitics.

Geopolitics of the LMC

The LMC was first announced by Chinese Premier Li Keqiang at the 17th China-ASEAN
leaders meeting in November 2014. An earlier proposal for a similar initiative had been
put forward by Thailand to China, but initially was not taken up. In March 2016, the LMC
was affirmed at the highest political level at a summit in Sanya, Hainan Province, China,
co-chaired by China’s Premier and Thailand’s Prime Minister. Suggesting a cooler political
relationship with China, Myanmar and Vietnam sent their Deputy Prime Minister and Vice
President respectively to the summit. Furthermore, since the summit, an ASEAN-China
Special Foreign Ministers Meeting in June 2016 on the issue of the South China Sea failed
to release a planned joint statement, revealing wider divisions within ASEAN towards
cooperation with China. It was reported that Laos (the ASEAN Chair) and Cambodia

63
Pukinskis and Geheb, “Impacts of Dams on Fisheries”.
64
ICEM, MRC SEA for Hydropower.
65
MRC, Overview of Hydrology of Mekong Basin.
66
Räsänen, et al., “Downstream Hydrological Impacts”.
67
Magee, “The Dragon Upstream”.
68
Kummu et al., “Basin-wide Sediment Trapping”.
69
Santasombat, The River of Life.
 The International Spectator   111

were particularly susceptible to pressure from China, weakening a joint position amongst
ASEAN members.70
The LMC is structured around three cooperation pillars namely: political and security
issues; economic and sustainable development; and social, cultural and people-to-people
exchanges.71 The LMC also identifies five priority directions for cooperation: inter-con-
nectivity, production capacity, cross-border economy, water resources and agriculture and
poverty alleviation. The LMC is first and foremost an economic cooperation project between
China and mainland Southeast Asia. Yet, the inclusion of water resources alongside eco-
nomic development is significant, given that it potentially bridges a long-standing divide
between the MRC and GMS program. It is especially significant given China’s past reluctance
to engage deeply with the former.
China’s initiation of the LMC should be viewed in the context of the proliferation of
initiatives by other influential countries in mainland Southeast Asia, a region that China
considers its backyard.72 For example, in February 2016, the United States hosted all ten
ASEAN leaders at the first US-ASEAN summit at Sunnylands, California, reflecting its ‘Asia
Pivot’ since 2011. Japan has also hosted annual Mekong-Japan summits between the region’s
leaders since 2009. Until the LMC, China was lacking its own clear regional initiative.
As China increasingly turns to multilateral relations with mainland Southeast Asia, it
is doing so on its own terms.73 Central to the LMC is China’s own economic regionalisa-
tion plan, the ‘Belt and Road Initiative’, which is backed by the financial clout of the Asian
Infrastructure Investment Bank (AIIB). At the summit, China named 78 ‘early harvest’ pro-
jects, and offered USD11.5 billion in concessional loans, alongside a further USD200 million
for poverty alleviation initiatives and USD300 million for regional cooperation.74 The LMC
also seeks to promote the ASEAN-China cooperation framework, such that the LMC’s three
pillars mirror those of ASEAN’s own pillars. Furthermore, there is a stated intention to
conclude negotiations on China’s Regional Comprehensive Economic Partnership, which is
its counter-point to the US-led Trans Pacific Partnership. Thus, the LMC seeks to recentre
regional planning towards China. The LMC summit was held under the title ‘Share the
River, Share the Future’, suggestively naturalising the relationship between China and the
downstream countries.75 More directly, China’s Foreign Minister stated: “We should strive to
build Lancang-Mekong River cooperation into a new model for South-South cooperation.”76

A critical hydropolitics of the LMC

According to Magee, five principles have governed the Lancang dams’ construction and
operation, namely: meeting domestic power needs; electricity sector integration with neigh-
bouring countries; addressing regional disparities under the Western Region Development
Strategy; low-carbon development; and “rationale and equitable use” of transboundary
waters.77 The latter emphasizes territorial sovereignty and the right to develop water

70
Parameswaran, “What Really Happened”.
71
PRC Ministry of Foreign Affairs, Sanya Declaration of First LMC Meeting.
72
Renwick, “China as a Development Actor”; Sunchindah, The Lancang-Mekong River Basin.
73
Renwick, Ibid.
74
Pongsudhirak, “China's Water Grab and Consequences”.
75
Hirsch, “Shifting Regional Geopolitics”.
76
PRC Ministry of Foreign Affairs, “Great Significances of Lancang-Mekong Cooperation”.
77
Magee, “The Dragon Upstream”.
112    C. Middleton and J. Allouche

resources, but also includes managing water for downstream countries regarding drought
mitigation and flood protection. To date, however, given China’s distanced relationship
from the MRC, there has been only limited coordination between China and downstream
countries, and often only to avert worsening tensions, for example during a flood in 2008
and a drought in 2010.78
Signalling the extent to which China now possesses significant storage capacity on the
Lancang River, one week before the LMC summit in Sanya City, China offered to release
water from its Lancang dams to alleviate a severe drought afflicting the region. This act of
hydrodiplomacy, linked in the media to the LMC itself, was reportedly on the request of
Vietnam.79 According to China’s Ministry of Foreign Affairs spokesperson: “China’s releases
of water show the effectiveness of ‘water facilities’ in helping control floods and address
droughts”.80 Thai media, however, reported that the unpredictable water releases were also
having a deleterious impact on some riverside communities.81 Furthermore, given that
China has for a number of years released water in the dry season to allow for river trade
between Northern Thailand and Yunnan Province, mostly without notification to down-
stream countries, others observed that the water releases were exceptional mainly in that
China shared data on them beforehand.82 This hydrodiplomacy hints at a new arrangement
for managing the Lancang-Mekong, but rather than institutionalised within a rules-bound
organisation such as the MRC, it instead is apparently dependent upon the good will of
China.
Asides from water regulation for extreme flood and drought, the LMC has also been
linked to transboundary hydropower dam cascade operation.83 With the Lancang cascade
of dams now a fait accompli, hydropower developers are looking towards building the six
dams on the Mekong River mainstream in Northern Laos. Of these dams, the 1,285 MW
Xayaburi Dam has been under construction since 2010 by a majority-Thai private consor-
tium, and will export 95 percent of its power to Thailand. The next three projects, which
have progressed to Project Development Agreements but are not yet under construction, are
the Pak Beng, Pak Lay, and Sanakham Dams, all led by Chinese state-owned enterprises. A
fifth project, the Luang Prabang Dam, is proposed by a Vietnamese state-owned enterprise,
although the dam’s status is unknown. The status and project developer of a sixth possible
dam, the Pak Chom Dam, are unknown.84 These six projects do not themselves possess sea-
sonal storage capacity, and thus will depend upon water releases from the Lancang dams in
the dry season.85 Thus, with the inclusion of China, the LMC offers the possibility for cascade
coordination serving a transnational network of state and non-state actors whose interests
– and powersheds – converge around the optimisation of hydropower dam operation.86
It is apparent, however, that the key documents and meetings of the LMC, when referring
to cooperation around the Lancang-Mekong River, brushed aside China’s unilateralism in
building the Lancang dams. Furthermore, in framing the LMC, statements to date have

78
Biba, “Desecuritization in China's Behavior”; Ho, “River Politics”.
79
“China releasing water to drought-stricken Mekong River countries”, Xinhua, 15 March 2016.
80
Blanchard, “China to Release More Water”.
81
Wangkiat, “Drowning in Generosity”.
82
“Water diplomacy by China offers drought relief”, The Nation, 19 March 2016.
83
Yu, “Water Resources Collaboration”; Biba, “China Drives Water Cooperation”.
84
http://www.poweringprogress.org; RPTCC, “Country Presentations from 19th Meeting”; Supplementary article material at
http://csds-chula.org/watershed-or-powershed
85
Hirsch, “China and the Cascading Geopolitics”.
86
Pongsudhirak, “China's Alarming 'Water Diplomacy'”.
 The International Spectator   113

not addressed the past or likely future negative changes to the river’s ecology and hydrol-
ogy and impacts to communities in downstream countries by China’s upstream dams, as
outlined briefly above.
Looking forward, a key question is: how will the LMC relate to the MRC? In January 2016,
it was announced that the principally Western donor-funded MRC would have its budget
cut over half to USD53 million for the period 2016-20, significantly reducing its capacity.87
These funding cuts result from the donor’s own reduced aid budgets, but also relate to doubts
raised regarding the MRC’s performance in facilitating recent decision-making processes
around the Xayaburi and Don Sahong mainstream dams in Laos.88 Thus, the LMC steps in
at a time when the existing transboundary water governance institution is in flux.
China’s ‘dialogue partner’ relationship with the MRC has been measured.89 In contrast,
within the LMC, on paper, all six countries are ‘equal’, even if, in practice, China, and to a
lesser extent Thailand, have a greater say. Yet, the LMC is not intended to be an interna-
tional river basin organisation in the same vein as the MRC, which has codified rules and
procedures of cooperation drawn from a draft version of the UN Water Courses Convention
(UNWC).90 Reflecting upstream-downstream tensions, it is of note that whilst Vietnam was
the thirty-fifth country to ratify the UNWC in 2014, China voted against it in 1997 and has
since pursued a so-called ‘soft path’ of cooperation.91 Instead, in its current form, the LMC
is stated to be a “project based” initiative that emphasizes a broader platform of economic
cooperation, and is unlikely to seek to build a Lancang-Mekong River Basin Organisation.
The LMC Summit in March 2016 did, however, commit China to establishing a centre
in Yunnan Province for technical cooperation and information sharing. Although details
are sparse at present, the proposal is significant given its location; not only will it place
China as central to influencing the institution, but it will also enable China to place the
centre beyond the reach of existing Western donors supporting the MRC. Paralleling this
development, for the past several years within the ADB’s GMS program on powertrade, a
tense competition has played out between China and Thailand on the location of a Regional
Power Coordinating Centre (RPCC) headquarters, which houses technical facilities for
regional powertrade. Here, the stakes are high, because both countries anticipate deepen-
ing their dependence on neighbouring countries to meet domestic power demand. Thus,
the contestation (or cooperation) for influence over the watershed extends to institutional
control of the future integration of the regional powershed.

Conclusion: watershed or powershed?

The Lancang-Mekong basin has entered a new era of hydropolitics. China’s Lancang dams
now provide it with significant control of the river’s headwaters. These dams together with
dam construction on the lower Mekong mainstream and tributaries are transforming the
river’s hydrology and ecology with implications for rural livelihoods. The dam construction
has challenged the MRC due to the limited engagement of China in this supranational
institution, but also because of the MRCs’ marginalisation from economic regionalisation
processes, such as the GMS, which have promoted cross-border electricity trade.
87
Kossov and Samean, “Donors Slash Funding for MRC”.
88
Rieu-Clarke, "Notification and Consultation Procedures”.
89
Biba, "Desecuritization in China's Behavior”.
90
MRC, Agreement on Cooperation for Sustainable Development.
91
Wouter and Chen, "China's 'Soft Path' to Water Cooperation”.
114    C. Middleton and J. Allouche

To assess these changes, this article has utilised Magee’s concept of powersheds. We have
extended the concept to consider how powersheds transform material river properties, such
as hydrology and fisheries, and thus watershed nature-society relations. Furthermore, by
considering how three powersheds across the length of the river exist, each tied to one of the
region’s major power markets (China, Thailand, Vietnam), we have shown how powersheds
shape the conditions under which the region’s hydropolitics unfold.
In examining the powersheds of the Lancang-Mekong River, we have emphasized in
particular the political economy of electricity, and its partial liberalisation. Private and
state-owned energy and construction companies and commercial financiers from China,
Thailand and Vietnam have been active in dam construction both within their own coun-
tries, and increasingly as investors in neighbouring countries. They thus wield considerable
influence in producing domestic public policy towards large dam construction, and the
‘national interest’ when negotiated in transboundary settings. As powersheds articulate with
watersheds, the limited opportunity for public participation and accountability in electricity
governance weakens the accountability of water governance across scales.92
Recent hydropolitics literature identifies that transboundary cooperation and contes-
tation exists simultaneously.93 This article has emphasized that the materiality of the river
matters, because as rivers become increasingly engineered by powersheds, as in the case
of the Lancang-Mekong River, the basis of cooperation and contestation changes. In this
context, the new Lancang Mekong Cooperation proposed by China with Thailand is sig-
nificant, as it emphasizes new areas for cooperation that relate economic agendas to water
resources management. This is based upon river engineering, including regulating water to
manage flood and drought, improved navigation of the river, and hydropower construction.
The LMC is a political project that reflects a wider economic agenda beyond the Lancang-
Mekong River alone. With regard to water resources, it challenges existing institutions,
such as the MRC and the GMS, as it seeks to direct influence towards China. More broadly,
with its economic infrastructure emphasis it could have significant implications for how
the value of water is perceived, and risks downplaying other values of the river, including
the environment and existing local riparian economies and livelihoods, which have been
long-standing issues of contestation in relation to hydropower development.94 There is cer-
tainly value in building an inclusive transboundary cooperation along the Lancang-Mekong
River. Yet, for the LMC to contribute constructively towards this goal, the legacy of the past
projects must be addressed, and existing plans opened up to peoples’ deliberation, which
has been absent to date.

Acknowledgement
The authors sincerely appreciate the constructive comments from two anonymous peer reviewers
and Gabriele Tonne.

92
Middleton and Dore, “Transboundary Water and Electricity Governance”.
93
Biba, “Desecuritization in China's Behavior”; Mirumachi, Transboundary Water Politics.
94
Hirsch, “Changing Political Dynamics of Dam Building”.
 The International Spectator   115

Notes on contributors

Carl Middleton, works at the Center for Social Development Studies, Faculty of Political Science,
Chulalongkorn University, Bangkok.
Jeremy Allouche works at the Institute of Development Studies, University of Sussex, Falmer.

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