After hailing the huge Three Gorges Dam for years as a major national achievement, the Chinese government has admitted for the first time that the project could be a disastrous failure with damaging environmental consequences. The about-face is not a revision of Beijing’s promotion of the unfettered operation of capitalist market. Just a year from the 2008 Beijing Olympics, it is trying to improve China’s ugly global image as a manufacturer of shoddy goods, a giant sweatshop and a huge industrial polluter.

The Three Gorges Dam is located in the middle of the Yangtze River, with a total power generating capacity of 22,500 megawatts—far larger than the world second largest dam in South America. Commenced in 1994, it has cost more than $US25 billion and is still not fully completed. Pushed by former President Jiang Zemin as a prestige project, the dam came to symbolise Chinese Communist Party (CCP) policy in 1990s of “opening up” to foreign capital. Public criticism of the dam was suppressed.

Now a different assessment is being made. On September 26, the official Xinhua news agency reported a high-level meeting of government officials at which “the many ecological and environmental problems concerning the Three Gorges Dam” were acknowledged. Participants expressed concern that “if no preventive measures are taken, the project could lead to catastrophe.” Wang Xiaofeng, the head of the Three Gorges Dam Project of the State Council declared: “We cannot win passing economic prosperity at the cost of the environment.”

The meeting discussed the glaring problems previously unacknowledged by the authorities. The most serious were landslides caused by the 600-kilometre reservoir that began to fill last year. Tan Qiwei, the vice mayor of Yangtze’s major city Chongqing, pointed out that slippages had occurred at 91 places along the reservoir, and that 36 kilometres of shoreline had caved in. He said the landslides had produced waves of up to 50 metres high. A number of farmers and fishermen have been killed in recent months.

The experts also warned of the danger of sedimentation caused by the reduced speed of the Yangtze water flow behind the dam. The rising silt levels could eventually make sections of the Yangtze impassible for shipping and even block the sluice gates with potentially disastrous consequences. In August 1975, the Banqiao Dam’s sluice gates were blocked amid heavy rainfall leading to severe flash flooding that killed 26,000 people. Another 145,000 perished from subsequent famine and disease.

Aquatic life in the Yangtze and its tributaries is also in danger. Severe water pollution has resulted from chaotic industrial expansion over the past decade to take advantage of the power and transport opportunities promised by the Three Gorges Dam. Unregulated logging in the surrounding areas has weakened the river banks, increasing the risk of landslides. In recent years, the authorities have closed or relocated 1,500 factories and built more than 70 waste treatment plants, as well as spending $1.5 billion to geologically stabilise the area. The underlying problems remain, however.

There is an immediate political motive in declaring the Three Gorges Dam to be a “disaster” just three weeks before this month’s key 17th national CCP congress. Criticism of a project closely identified with former President Jiang Zemin and his faction can only assist the current President Hu Jintao and his supporters to consolidate their grip on top leadership committees. Moreover, one of the disputes between the two factions centres on the pace of economic development. Unlike Jiang, Hu has sought to rein in economic growth and speculative investment out of concern for economic instability.

An article by London-based Times on September 27 pointed out that Hu distanced himself from the Three Gorges Dam by staying away from the completion ceremonies last year. Dai Qing, an environmental activist told the newspaper that after suppressing criticism for years, “they [Beijing] are starting to hear.” “The Government knows it has made a mistake. Now they are afraid that the catastrophe that they cannot prevent will spark civil unrest. So they want to go public before the troubles start,” she said.

Open for investment

Jiang came to power amid the brutal crackdown on anti-government protestors in Tiananmen Square in 1989. Chinese premier at the time was Li Peng, who directly ordered troops to open fire. Li was also the principal advocate for the Three Gorges Dam. A widely reported reason was that his family had large business interests in the country’s lucrative power generating industry. The crackdown and the dam were both important signals to foreign investors that China was open for business.

After the Tiananmen Square massacre, foreign investment flooded into China, secure in the knowledge that Beijing would not hesitate to suppress social unrest. In 1992, Li pressured the National People’s Congress (NPC) to rubber stamp the Three Gorges Dam project, but only 67 percent of delegates approved it—the lowest vote for any bill in history. Nevertheless, the decision encouraged a rush by all levels of government to build infrastructure, to attract investors and impress their political superiors. The prime example has been the re-emergence of Shanghai as the metropolitan centre of Chinese capitalism.

China’s economic boom has generated explosive social tensions. The gap between rich and poor is widening, official corruption is rife and pollution is leading to environmental disasters. The frenzied building of apartments, hotels, highways and industrial parks has produced a speculative bubble in real estate development, alongside a skyrocketing stock market. Powerful sections of the business elite and local party bosses want the country’s roaring economic growth rates to continue unimpeded.

Hu’s attempts at “macroeconomic control” have had little impact. The US subprime crisis and the decision to cut interest rates have come into conflict with China’s need to lift rates to control cheap credit for speculative projects. Hu purged the Shanghai party leadership last September, because of its resistance to his attempts to control the “overheated” economy. The criticisms of the Three Gorges Dam are another warning shot to those intent on profiteering from infrastructure projects.

The last consideration in the debate over the dam is the needs of working people and the sustainable utilisation of natural resources. Despite its shortcomings, the dam has demonstrated the potential for harnessing the Yangtze’s water power. It is an important safety valve to control the Yangtze’s destructive floods and provides much needed electricity throughout central China as well as opening up new sections of the river for large vessels in the economically important Yangtze valley.

Given previous experiences with dams on the Yellow River, the designers of the Three Gorges Dam claimed to have established a number of mechanisms to deal with sedimentation. To reduce the risk of silt accumulating behind the Three Gorges Dam, Chinese authorities outlined plans to build four new dams upstream. Collectively, these dams will produce 38,500 megawatts of power, almost doubling the Three Gorges Dam’s capacity.

When ship-lifting facilities at the Three Gorges Dam are completed, it is estimated that Yangtze shipping will increase from 10 million tonnes to 50 million tonnes per year, cutting transport costs by one third. According to official estimates, the dam’s hydropower will reduce China’s coal consumption by 31 million tonnes per year, thus cutting the emission of greenhouse gases, dust and other discharges from coal-powered thermal plants.

The main cause of the environmental problems is not the dam itself, but Beijing’s pro-market policies, which are creating similar disasters throughout the country. Some 300 million people lack access to clean water due to severe industrial pollution in rivers and lakes. The unregulated exploitation of land for agricultural and mining activities has caused the rapid advance of deserts—from making up 17.6 percent of China’s land area in 1994 to 27.5 percent today. Some 760,000 people die prematurely each year due to air and water pollution. According to some analysts, China could overtake the US this year as the world’s largest emitter of greenhouse gases.

Having ignored environmental problems for years, the Chinese authorities have been forced to consider the issues due to the impact on the economy and the lifestyles of the emerging wealthy elite. International financial circles have frequently noted that poor air quality in Hong Kong, caused by factory complexes in neighbouring Guangdong, is a minus for its “investing environment”.

Significantly, very little has been said of the social dislocation caused by the Three Gorges Dam which has displaced 1.2 million people. Compensation for the residents in 129 towns and cities accounts for 45 percent of the total costs of the dam. However, a large portion of the funds allocated for migrants has been stolen by corrupt officials. The new communities established with relocated factories, farms and populations have turned out to be economic basket cases. In 2004, social tensions in Wangzhou exploded, when 80,000 workers and unemployed stormed government buildings and clashed with police.

While Chinese authorities are now considering silting, deforestation and the threats to aquatic life caused by the Three Gorges Dam, no serious proposals have been made to address the social crisis confronting those forced to leave their communities.