Thayer Consultancy Background Brief

ABN # 65 648 097 123

Mekong-Lancang Cooperation
and the Question of Chinese
Heremony
March 5, 2018

Subject: Second Lancang-Mekong Summit (January 2018)

If China assumes control over water governance and sidelines environmental
problems from dams and climate change then where is the Mekong heading? Does
this pave the way for asimmering water conflicts, the marginalization of the Mekong
River Commission (MRC) and a return to turbulence along the Mekong River?
Any talk of a ‘water war’ at this stage is no more than what a few leaders have dubbed
a ‘war of ideas.’ At the state level among the four Mekong River Commission (MRC)
members – Cambodia, Laos, Thailand and Vietnam – there is clearly no leader who
openly challenges the Chinese vision for coopting the Mekong into Belt and Road
Initiative (BRI) strategy.
Q1 What is your general assessment?
China seeks to go it alone and press its leadership and initiatives on the Lower Mekong
states rather than participate in already existing multilateral mechanisms such as the
Mekong River Commission (Cambodia, Laos, Thailand and Vietnam) and the Greater
Mekong Sub-region (Cambodia, Laos, Myanmar, Thailand, Vietnam and Yunnan
Province and Guangxi Zhuang Autonomous Region but not the central government).\
China’s initiatives compete with the already existing Mekong-Japan Summit Meeting
process that started in 2009 and the newer U.S. Lower Mekong Initiative. China is the
permanent co-chair of the MLC Leaders’ Meeting alongside a rotating co-chair from
one of the four Lower Mekong members. Chinese cash determines priorities, for
example China has set up a $300 million Special Fund to finance 132 small and medium
projects as part of its Lancang-Mekong project.
China has displaced Thailand as the initiator of sub-regional cooperation in mainland
Southeast Asia. At the second Mekong Lancang Cooperation (MLC) Leaders’ Meeting,
China’s Premier Le Keqiang stated bluntly, “This institution was made by China… China
takes on this responsibility… China needs a stable environment in its neighbourhood.”
Also at the second MLC Foreign Ministers’ meeting, China tabled forty-five early
harvest projects and thirteen other initiatives. All were approved.
China’s Belt and Road Initiative (BRI) already extends to Laos, Thailand and Vietnam.
Not only is China building rail lines to connect Kunming with Bangkok via Vientiane but
a superhighway to connect Phnom Penh with Sihanoukville. These infrastructure
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projects spawn other construction activities including apartments, skyscrapers,

satellite cities, markets, Chinese restaurants and shopping malls.
At the first MLC Leader’s Summit in 2016, China pledged $2 billion in preferential loans
and more than $10 billion in lines of credit. China’s massive funding for infrastructure
such as roads, bridges, highways, rail lines, irrigation systems, ports, and power grids,
will make it easier for China to penetrate the Lower Mekong. This will give China
enhanced political economic and strategic leverage over the Lower Mekong states.
These projects will be carried out by Chinese companies who can always count on the
support of the central government.
As concessional loans mount up the Lower Mekong countries will incur debts. The
greater the dependence on China, the more constrained these states will be to protest
the negative impact of Chinese dam building.
Q2. Many Thai, Cambodian and Vietnamese water resources /Mekong experts are
deeply concerned by China’s dam building. Will they have any impact?
ANSWER: China has already built eight upstream dams and reportedly plans to build
from twelve to twenty more (some are already under construction). Laos is proceeding
to build the Don Sahong and Xayaburi dams. It is doubtful that sufficient
environmental research has been carried out to fully assess the impact of changes in
water flow, carriage of silt, and fish spawning and migration. Misjudgment or changes
in weather patterns over time could have a massive negative impact on the
environment and livelihoods of people living downstream.
China’s MLC mechanism makes no provision for the rights of downstream states to
review and object to China’s development plans. According to the Southeast Asia
Program Director for the NGO International Rivers, “Over the past two decades,
China’s upstream dams have altered the (Mekong) river’s natural flood-drought cycle
and blocked the transport of sediments, drastically affecting ecosystems and fisheries
downstream.”
Since 2002, China has provided daily data on water levels to the Mekong River
Commission during the rainy/flood season. But the Lower Mekong states need daily
data on water levels during the dry season because water utilization is one of their
priorities. China is reluctant to provide data on the operations of its dams. In October
2017, for example, China informed the Mekong River Commission one day in advance
of a change in water discharge from its Jinghong reservoir to be used to support its
power grid.
China wants to dredge the Mekong River, clear rapids and dynamite small islands and
rocks in the Mekong adjacent to Thailand’s Chiang Rai province to clear passage for
larger cargo vessels.
The influence of specialists on water management from the Lower Mekong states
varies from country to country. Their impact is strongest in Vietnam and Thailand but
less so in Laos and Cambodia. These specialists have made an impact within the
Mekong River Commission whereas in the MLC mechanism they have been relegated
to low-level joint working groups. The impact of water specialists is filtered through
their respective domestic political systems. It is up to the national leadership in each
Lower Mekong state to its their concerns about the impact of China’s upstream
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activities on downstream states. The second MLC Leaders’ Meeting appears to have
sidestepped this contentious issue, however Vietnam’s Prime Minister Nguyen Xuan
Phuc reportedly raised this issue with his Chinese counterpart.
Q3. Would you agree there are the ingredients for simmering discontent, nationalist
and Lower Mekong resentment towards Chinese hegemony? More droughts could
trigger stronger feelings that China can turn the water tap on and off from the upper
Mekong. Is this the basis for destabilization unless downstream concerns are
addressed?
ANSWER: Farmers in Cambodia and Vietnam that are affected by draught during the
dry season have and will continue to express their resentment towards China. But the
circumstances in each Lower Mekong country differs. Anti-China sentiment in Vietnam
is already toxic because of maritime disputes in the South China Sea. Any Chinese
mishandling of water flows in the dry season will add to anti-China sentiments in
Vietnam. Cambodia’s Hun Sen is likely to repress any anti-China sentiment.
The picture is mixed because of dam construction by Laos and siphoning off of water
for irrigation by Thailand. This makes it difficult for national governments to direct
domestic anger at China alone. Vietnam is likely to be the most vocal and proactive in
pressing China to take action.

Suggested citation: Carlyle A. Thayer, “Mekong-Lancang Cooperation and the

Question of Chinese Heremony,” Thayer Consultancy Background Brief, March 5,
2018. All background briefs are posted on Scribd.com (search for Thayer). To remove
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Thayer Consultancy provides political analysis of current regional security issues and
other research support to selected clients. Thayer Consultancy was officially
registered as a small business in Australia in 2002.