Pakistan, Nepal and Myanmar have canceled nearly $20 billion of hydroelectricity contracts with the same Chinese company, the Gezhouba Water and Power Group. This is a huge setback for the Chinese trade linking project, Belt and Road Initiative (BRI) which involves global infrastructure. This may represent a larger rejection of China’s economic imperialism in Asia.
Pakistan canceled the Diamer-Bhasha Dam, a $14 billion project, blaming tough financing terms imposed by China. Before the agreement with China, Pakistan had been turned down by both the World Bank and Asian Development Ban. India protested Chinese constructing projects in Kashmir, which it claims as its own. China has tried to maintain simultaneous relationships with India and Pakistan.
Nepal closed down a $2.5 billion hydroelectric project because of alleged financial irregularities. The cancellation came two weeks ahead of an election. Both the awarding and cancellation has resulted in political controversies in Nepal.
Myanmar stopped a $3.6 billion dam and has stated that hydroelectric power projects are no longer a priority in tackling the problem of power shortages. Myanmar is looking to Liquid Natural Gas and smaller dams as an alternative solution.
There is a growing realization that the cost of per kilowatt of electricity produced by hydroelectric power is higher than solar and wind. China has developed domestic hydroelectric technology and is looking for profit leveraging their investments. Proposals for hydroelectric projects have come at a high price, often requiring that existing infrastructure be placed in jeopardy as collateral for future projects.
Although China initially tried to sell BRI projects to neighbors Myanmar, Nepal and Pakistan but is now looking to Europe and the Americas as potential markets. It is telling that smaller Asian countries are turning away from China. This indicates that China is seen as a predatory expansionist power which is distrusted by its neighbors. This could be good news for local trading partners South Korea and Japan as well as the United States.
Featured image courtesy of the Museum Rodin.