The Myanmar government recently announced that it would suspend the building of the Myitsone Dam, a large hydroelectric power project jointly built by Myanmar government contractors and the China Power Investment Corporation (CPI).
It shows us once again that Chinese enterprises need to improve their skill at managing international political risks when running infrastructure projects in neighboring countries.
Work on the dam began five years ago. How could the project be set up at that time if it didn't meet the basic principle of mutual benefit? The power of international influence in causing the project to be abandoned should not be neglected.
In North Africa and Europe, many large dams have been demolished and abandoned due to the aging dam structure and the expensive maintenance fees. The public has also come to a new recognition of dams' environmental impact. So the dam construction in the Indo-China Peninsula bucks international trends.
There are many sensitive issues around dams, including the ecological impact and the treatment of displaced people. The ecological changes along the Mekong River, especially the tropical rain forest, influence climate change worldwide. Regional governments, international organizations and NGOs all have their own opinions as to how to protect the rivers' water resources.
European and American transnational enterprises are involved in hydropower and water conservancy projects in this region, and it is common practice for them to assess the environmental and social impact of projects.
Chinese enterprises need to start taking steps to deal with accusations by raising their risk and impact assessment standards to international levels.
Criticisms over Chinese companies don't necessarily reflect all the realities of the region. The mountainous areas and villages of the countries there are short of electricity. Agricultural methods such as deforestation and slash-and-burn cultivation are still very common. The construction of an electricity grid is helpful in changing production and the way of life in these regions, reducing the damage to natural forests.
Hydroelectricity is among the cleanest forms of power generation, and it can bring the bright lights of modern society to ordinary people.
But international public opinion often slams Chinese firms, and their response is unchanging and inflexible. "Achieving mutual benefits and win-win results" and "Facts speak louder than words" are the only responses the Chinese firms use.
The power of the international media and NGOs cannot be underestimated. Their activities and speeches play a key role in shaping the opinions of the international and even Chinese media as well as influencing the policies made by Western governments and international organizations. The numbers of exiles and dissidents from the region, as well as long-term Western residents and experts, may be small, and they may have their own prejudices, but their "in-depth knowledge of the region" gives them a level of influence far above ordinary people.
According to the observations by my colleagues and I, there is plenty of foreign capital in the Indo-China Peninsula in the same industries, but Chinese-invested enterprises inevitably receive the majority of media and diplomatic focus at present.
These criticisms disturb Chinese enterprises' operations, but the businesses involved ignore the situation and refuse to give a proper response.
I suggest that large Chinese enterprises strengthen their communication with Chinese scholars to help improve their work. For example, faced with the criticism from different parties, Chinese scholars often feel helpless without the experience of field research.
They even lack the video materials showing the construction sites in the countries in which projects with Chinese investment are operating. To change this situation, help from Chinese firms is indispensable.
In the end, it will be necessary for China-invested enterprises to jointly set up meaningful criteria, along with other foreign enterprises in the same industries, for environmental protection and social impact.
By Zha Daojiong. The author is a professor at the School of International Studies, Peking University.
