China has aroused international alarm by using its virtual monopoly of rare earths as a trade instrument and by stalling multilateral efforts to resolve disputes in the South China Sea. Among its neighbours, there is deep concern at the way it is seeking to make water a political weapon.
At the hub of Asia, China is the source of cross-border river flows to the largest number of countries in the world — from Russia to India, Kazakhstan to the Indochina peninsula. This results from its absorption of the ethnic minority homelands that make up 60 per cent of its land mass and are the origin of all the important international rivers flowing out of Chinese territory.
Getting this pre-eminent riparian power to accept water-sharing arrangements or other co-operative institutional mechanisms has proved unsuccessful so far in any basin. Instead, the construction of upstream dams on international rivers such as the Mekong, Brahmaputra or Amur shows China is increasingly bent on unilateral actions, impervious to the concerns of downstream nations.
China already boasts both the world’s biggest dam (Three Gorges) and a greater total number of dams than the rest of the world combined. It has shifted its focus from internal to international rivers, and graduated from building large dams to building mega-dams. Among its newest dams on the Mekong is the 4,200 megawatt Xiaowan — taller than Paris’s Eiffel Tower. New dams approved for construction include one on the Brahmaputra at Metog (or Motuo in Chinese) that is to be twice the size of the 18,300MW Three Gorges — and sited almost on the disputed border with India.
The consequences of such frenetic construction are already clear. First, China is in water disputes with almost all its neighbours, from Russia and India to weak client-states such as North Korea and Burma. Second, its new focus on water mega-projects in the homelands of ethnic minorities has triggered tensions over displacement and submergence at a time when the Tibetan plateau, Xinjiang and Inner Mongolia have all been wracked by protests against Chinese rule. Third, the projects threaten to replicate in international rivers the degradation haunting China’s internal rivers.
Yet, as if to declare itself the world’s unrivalled hydro-hegemon, China is also the largest dam builder overseas. From Pakistan-held Kashmir to Burma’s troubled Kachin and Shan states, China is building dams in disputed or insurgency-torn areas, despite local backlash. Dam building in Burma has contributed to renewed fighting, ending a 17-year ceasefire between the Kachin Independence Army and government.
For downriver countries, a key concern is China’s opacity on its dam projects. It usually begins work quietly, almost furtively, then presents a project as unalterable and as holding flood-control benefits.
Worse, although there are water treaties among states in south and south-east Asia, Beijing rejects the concept of a water-sharing arrangement. It is one of only three countries that voted against the 1997 UN convention laying down rules on the shared resources of international watercourses.
Yet water is fast becoming a cause of competition and discord between countries in Asia, where per capita freshwater availability is less than half the global average. The growing water stress threatens Asia’s rapid economic growth and carries risks for investors potentially as damaging as non-performing loans, real estate bubbles and political corruption.
By having its hand on Asia’s water tap, China is therefore acquiring tremendous leverage over its neighbours’ behaviour.
That the country controlling the headwaters of major Asian rivers is also a rising superpower, with a muscular confidence increasingly on open display, only compounds the need for international pressure on Beijing to halt its appropriation of shared waters and accept some form of institutionalised co-operation.
The South East Asia countries have got fully elaborated stages of development. In Deripaska’s opinion, Russia should enter this Asian world and integrate into it. The head of the Basic Element Company speaking at Baikal International Economic Forum (BIEF) has also mentioned that Asian countries and China primarily have got certain skewness and deviations dew to their high speed of development.
By all appearances, Deripaska is going to save China from the problems of its uneven development. For this purpose he offers to organize new exploitation of the Siberian resources.
In Deripaska’s opinion, huge natural resources and the absence of infrastructure are mutually exclusive. That’s why it’s time to make a decision now with what Russia should come to the world market, i.e. to reorganize the Siberian infrastructure radically.
During the BIEF plenary session the businessman has demonstrated the map of potential exploitation of hydro-energetic resources of Siberia. In his opinion, it is the hydroenergetics which can give a new impetus to the economy of Siberia and change substantially the energetic structure of the world, especially in the «after Fukushima» existence conditions.
Contrary to popular belief that Siberia is a Russian depositary, the SFD share in the country’s GDP is only 10%. According to the growth rates the SFD has been substantially falling behind the other regions since 1997.
Deripaska has casted doubt on the possibility of the further development of Siberia in the existing economic conditions. In his opinion, Moscow is Europe oriented, as a result of it moving in the Asian direction is impossible. Deripaska has demanded in the ultimative form from Moscow to change the economic paradigm and integrate into the Asian world.
According to Deripaska, the existing infrastructure of Siberia is not enough for the harmonious development of his business. He has appealed to the large natural monopolies, the RR in particular, for radical investments, and the customs service — for the drastic increase of the through-flow rate of the Siberian and Far Eastern border check points. Without it the access to foreign markets of products produced and mined in Siberia will be impossible.
In Oleg Deripaska’s opinion, it is impossible to make friends with China, Korea and Japan from Moscow. It should be done from Siberia.
The speech of the odious oligarch has shocked the representatives of the authoritative bodies. Out of all the participants only the governor of the Irkutsk region Dmitry Mezentsev has managed to comment on this speech clearly. According to Mezentsev, the proposals of Deripaska are so substantial that they require «several BIEFs».
EuroSibEnergo, the electricity and coal division of billionaire Oleg Deripaska’s En+ Group, may return to its plans for an IPO, which failed to materialize in 2010-2011, next year.
EuroSibEnergo has been consolidating Deripaska’s energy and engineering assets since 2009, and holds controlling stakes in Irkutskenergo (RTS: IRGZ), including Vostsibugol; Krasnoyarsk Hydropower Plant (RTS: KRSG); Avtozavodsk Combined Heat-and-power Plant; distribution companies Volgaenergosbyt and MAREM+; and engineering firm EuroSibEnergo Engineering. The company controls power plants with combined installed capacity of 19.5 GW, including 15 GW at major hydro plants, as well as coal deposits with reserves of about 1.3 billion tonnes.
The company had initially planned to list in Hong Kong in December 2010, but postponed the IPO to March-April 2011 due to the need to gain approval from Chinese regulators for the participation of potential anchor investor Yangtze Power. In early 2011, it became clear that the company had put off the IPO until fall as it sought investors, and then the timetable was moved back again due to a deal with RusHydro (RTS: HYDR) to swap 40% of Irkutskenergo, 25% of Krasnoyarsk Hydropower Plant and the dams of the Yenisei cascade for a stake in EuroSibEnergo.
«The potential deal with RusHydro is a possibility to consolidate operating assets on the books of EuroSibEnergo and it would be far better for both majority and minority shareholders if EuroSibEnergo’s IPO will be carried out when the company will fully (or almost fully) own these assets. The company will be worth far more,» En+ head Artyom Volynets said in an interview with Kommersant.
«We are holding negotiations [with RusHydro — ed.] and I hope that we will be able to take the new company public, with RusHydro as the owner of more than a blocking stake, in the middle or second half of 2012,» Volynets said.
It was reported earlier that EuroSibEnergo planned to sell 25% of its shares in the IPO and raise $1 billion-$1.5 billion. The global coordinators of the IPO were Bank of China International, Deutsche Bank and VTB Capital, and the bookrunners were Bank of America Merrill Lynch, Credit Suisse, RBS, Renaissance Capital and Sberbank (RTS: SBER).
Good afternoon. On behalf of Mr. Cao Guangjing, Chairman of China Three Gorges Corporation and Mr. Zhang Cheng, President of China Yangtze Power Co., Ltd. I would like to present a brief introduction of my company and the cooperation in Russia.
1. Briefing of China Three Gorges Corporation and China Yangtze Power
China Three Gorges Corporation (Hereinafter referred to as «CTGPC») is China’s largest clean energy group now. CTGPC’s principal operations include hydropower project engineering, construction and management, electricity production, related technical services, and etc.
CTGPC has built and owned the Three Gorges Hydropower Plant with total installed capacity of 22,500 MW, and is developing more hydropower plants on the Upper Yangtze River, including Xiluodu HPP (13, 860MW), Xiangjiaba HPP (6,400MW), Wudongde HPP (8,700MW), Baihetan HPP (14,000 MW) and other giant hydropower projects. By the end of 2020, the total installed capacity of the Corporation will exceed 90 GW.
China Yangtze Power Co., Ltd. (hereafter called «CYPC» for short) is a joint stock company controlled by CTGPC. CYPC is currently the largest listed hydropower company in the People’s Republic of China («PRC»). By the end of 2010, the Company owns the Gezhouba Hydropower Plant and all the generating units of Three Gorges Hydropower Plant with total installed capacity of 21,077 MW.
2. The Globalizing Process of CTGPC and CYPC
Large-scaled hydropower development and operation are the core competitiveness of CTGPC and CYPC. With advantages of the Three Gorges Brand and of that in the technology and management, it is our goal to build a large clean international energy group through participating international hydropower development and hence promote the energy cooperation between China and Russia as well as other neighboring countries. CTGPC and CYPC bring the International hydropower development as their long-term strategic objectives. Currently, CTGPC has hydropower and infrastructure projects in more than 20 countries and regions.
3. Cooperation with Russian Partners
3.1 Background of Sino-Russian Hydropower cooperation
(1) Rich hydropower potential in Siberia and the Far East
Russia is rich in hydropower potential amounting 10% of the world total, which is mainly in Siberia and the Far East, where the electricity demands and hydropower development are low. With the long-distance transmission technology maturing, it is feasible to transmit power from Russian Far East and Siberia to China.
(2) Cooperation Opportunities in Sino-Russian Hydropower Development
It is the 10th anniversary of the signing of the Treaty on Good-Neighborliness, Friendship and Cooperation between China and Russia. The cooperation between China and Russia in political, economic, cultural and strategy has been strengthened in these 10 years. Sino-Russian’s cooperation in various fields, including electricity are clarified in ?Sino-Russian’s Investment Cooperation plan? approved by the leaders of the two countries in June 2010 and ?Sino-Russian Joint Statement about deepening strategic partnership?signed by both governments in September.
(3) Sino-Russian economic development needs the cooperation of power companies in the two countries
Russian government released the strategy for developing energy resources in Siberia and the Far East in ?Far East and Baikal region socio-economic development strategy before 2025?in early 2011 and also put forward a set of plan to strengthen international co-operation and actively attract foreign investors. In the long run, it is an inevitable trend to meet the electricity demand in Northeastern and Northern China, to improve the local energy structure, to promote clean energy utilization and to jointly develop hydropower resources in Russia, and transmission power to China.
??3.2 Considerations on Sino-Russian hydropower cooperation
The power projects on the border river and in Russian land are in large number, board involvement and long construction period. The implementation of these projects need the guidance and co-ordinations from the energy and water resource departments from both countries and the cooperation of grid and designing companies. Russian two largest power companies are leading power companies in Russia and are the two most important power companies in Siberia and the Far East. CTGPC/CYPC has extensive experience in hydro project construction, power plant operation management, and sound credit and influence on capital markets. There are good foundations between CTGPC/CYPC and two largest Russian hydro power companies. We shall follow the principles of sharing risk and interests to develop mutually beneficial cooperation?also take the social responsibility, and work together for Sino-Russian friendship and common development .
3.3 Progress of cooperation
To promote and realize the strategic objectives of joint development of Russian hydropower resources and power transmission to China, two Russian largest power companies and CTGPC /CYPC have conducted communications for many times and have made substantial progress through signing of framework agreement and making collaboration plan. We are promoting the project?level cooperation now.
4. Suggestion and prospects
With the deepening of the strategic and energy co-operations between the two countries, Sino-Russian joint development and cooperation will enter into a new stage. Since the hydropower development is a long term strategic cooperation, we would like to make following suggestions:
(1) Bilateral coordination mechanism on the hydropower development shall be established by the government departments from both countries to support and guide the co-orperation between companies of the two countries and the rolling revising on the middle and long term plans by the government departments shall be carried out to meet the social and economic development.
(2) In order to place a solid and long term cooperation foundation, it is important to continuously improve market access conditions and taking full advantages of the suppliers from both countries to effectively reduce the cost and control the risks.
(3) The supervision and regulatory authorities, financing institutes and the enterprises involved should study together to find out the project financing portfolio and risk control mechanism to help the enterprises getting better financing support.
In the foreseeable future, Sino-Russian cooperation will set off a new chapter in the energy filed. CTGPC /CYPC will put their foremost efforts to make it happen.
The Ministry of Regional Development of the Russian Federation is responsible for coordinating the implementation of the Russia and China Cross Border Cooperation Programme that was approved by the Heads of the States in October, 2009. In particular, it is support for investment projects that are included in the list of key projects of the Programme.
Together with the subjects of the Russian Federation, the Ministry carried out activity on the structuring and selection of priority investment projects, and working out recommendations on financing and implementation of the investment projects. The Ministry of Regional Development recruits the community of experts, including members of the Advisory Council on the regional investment policy at the Ministry of Regional Development of Russia.
The proposals on elaboration of mechanisms to support and finance priority projects of the Programme were discussed at the meeting of the Heads of establishments that are responsible for implementation of Cross Border Cooperation Programme (Ministry of Regional Development of Russia and State Committee of China National Development and Reform) in June 2009. The agreement was reached to discuss this topic at the next conference on cross-border co-operation with experts of the banking sector.
according to Russian sources the Chinese side proposed to establish a joint investment fund to promote cooperation between regions of the Far East, Eastern Siberia of the Russian Federation and the North-East China in order to attract additional investments in projects that are included in the list of the key projects of the Programme of Cross Border Cooperation.
The issue of establishing a joint fund of direct investments in Russia and China was again discussed at the Russian-Chinese Conference on Cross-border and Interregional cooperation, which will be held September 12, within the framework of the VII of the Baikal Economic Forum.At the meeting, Chinese delegates discussed with their Russian counterparts mechanisms for supporting and financing investment projects in border areas. Representatives from China’s privately-owned enterprises expressed their strong desires and worries about making investments in Russia, as they are not familiar with the investment environment and the relevant policy there.In response to the question, Basargin said Russia should set up a mechanism to provide specialized services to all reliable Chinese investors.
«Such an institution, once launched, would act as an intermediary and an information exchange channel. It will for sure enhance investor confidence and promote the working efficiency of both sides,» said the official.
Russia and China have achieved progress in some joint projects under the Outline of Regional Cooperation between Northeast China and the Russian Far East Area and Eastern Siberia, which was signed by leaders of the two countries in 2009. But obstacles remain in the implementation of some major projects, Basargin noted.
Therefore, both countries are now seeking ways to promote mutual trust and improve coordination mechanisms, as China plans to set up a joint fund with Russia for inter-regional mutual investment, while Russia has launched its Direct Investment Fund with the aim to attract more Chinese capital, said the minister.
He believed the specialized institution would create more favorable conditions for mutual investment. However, discussions at the forum, according to the minister Basargin, highlighted sharp difference in priorities between Russian side, favoring cooperation in technology and development of value-added products, and Chinese side focusing on extraction and export of resources from Russia.
Contrary to the point of view of the minister famous Russian tycoon Oleg Deripaska and his firm En+ favors large-scale export of resources to China and called on the Russian government to provide tax-brakes, investment guarantees, and establish a fund to support large-scale resource-extraction projects. At the forum Deripaska aggressively promoted his partnership with Chinese Yangtze Power to build hydropower plants and transmission lines for electricity exports from Siberia to China. Partners already started feasibility study for two dams on Shilka and Angara rivers.
The China Daily recently published a very controversial piece on Hulunbeier Grasslands highlighting well familiar problems.
China’s Inner Mongolia Autonomous Region beckons travelers with its fabled undulating fields of grass, fascinating Mongol customs and a scenic Russian border area that teems with trade. Yao Minji pays a visit.
We have a small forest, the Greater Hinggan Range, which extends 1,220 kilometers from north to south in Inner Mongolia Autonomous Region and Heilongjiang Province.
We have a small river, the Argun River, which extends 1,620 kilometers and divides China and Russia.
We have a small cadre, Genghis Khan, who established the Mongol Empire, the largest contiguous empire in history.
These sweeping understatements are used by locals of Hulunbuir City to introduce to us their hometown, humbly and proudly, when we arrived at Hailar District, the administrative center of the vast grassland.
The city, in northeastern Inner Mongolia, is larger than most Chinese provinces and is recognized as the largest city in the world in terms of area. Since it’s so large, it often takes two or three hours to drive from one tourist destination to another.
The region is best known as the Hulunbuir Grassland, one of the most beautiful grasslands in the world where many nomadic groups, including China’s Mongols, originated.
This is also where ancestors of Genghis Khan established their tribe and where the great emperor fought for many years and was said to be buried. Mysteries swirl around Genghis Khan, who conquered most of Eurasia in the 13th century. He is now considered a hero who united the ethnic tribes in the area; one of the biggest mysteries is the location of his burial site.
It’s supposed to be somewhere in the grassland. Legend has it that after he was buried Mongols used dozens of horses to trample and flatten the ground, and it was guarded by hundreds of soldiers until the grasses at the site grew back and were identical to all the other grass. It became invisible
But in order for people to worship there, herders killed lambs in front of their mothers so that the traumatized ewes would never forget the location. Whenever it was time for worship, people just followed the sheep to the slaughter site. After the sheep died, the location was hidden forever.
The grassland and the many towns and cities it encompasses have long been recognized as magnificent travel destinations but large-scale and planned tourism development in most parts only began in 2007.
That means there are limited tourism resources in terms of service, transport and accommodation. For those who don’t like big development, commodification of Genghis Khan and Mongol culture, tacky souvenirs and shops, this is a good thing.
Even at the most popular destination, such as Hulun Lake, near the Shiwei Russian Ethnic Township, we didn’t find street souvenir vendors that crop up everywhere else in China.
The majority of this place is very much how nature really is, without much human interference.
If you’re looking for five-star hotels and luxury boutiques, this is not for you, though many hotels and restaurants have been built over the past five years. But be warned, five-star development is surely coming.
So see this wonderful place while it is unspoiled.
This is the place for those who are interested in nature and culture and have studied a bit of Mongol culture, its rules and taboos, beforehand. You can drive freely, stop whenever you like and wander around, eat whatever is available, stay wherever you can find lodging, even a yurt. It’s a place for those who want to dump urban life for a couple of weeks and enjoy the beauty of the grasslands.
Before the trip, I had imagined a vast, intense green grassland with no borders, grass growing above knee-height and bending like ocean waves in the wind. I imagined intense green land and a dome of intense blue sky with white clouds. And, of course, herds of cattle, horses and sheep. A few simple Mongolian yurts.
During my six-day trip, I saw much of what I had imagined, but what was supposed to be beautiful, verdant prairie was rather disappointing. Nomads told us that July should be the best season when grasses grow high above the knee, but that hasn’t happened in most parts of the great grassland in the past few years because of worsening drought, caused by industrial pollution from big coal mining (many surface mines also encroach on grasslands), over-grazing and increasingly dry weather.
When we arrived in early July, nomads had welcomed the first rain since spring and most of the grass was only ankle-high.
We also learned that HulunLake and BuirLake, for which the grassland is named, have been shrinking for years. The storage level of HulunLake has dropped 4.6 meters since 2000, and the whole area of the lake decreased by 20 percent from its historic high; storage capacity is only half what it once was.
The shore of Hunlun Lake retreats around 100 meters every year, and is now more than 1,000 meters away from its original place. What was once a small cabin on stilts above the water now stands lonely at the shore, a few hundred meters away from the lake.
Over six days, we visited Hailar District, the administrative center; Ergun City, which contains a wetland park; Shiwei Russian Ethnic Township, and Manzhouli City, the busiest land port of entry in China (from Russia) and one of the most prosperous cities in northeastern China.
Long known as the «Pearl of the Grasslands,» Hailar District is one of the more populated areas in Hulunbuir Grassland and its administrative center.
More than 80 percent of the population is Han people, but respect for Mongols is evident in local policies and in daily life. All street signs are in both Mandarin and Mongolian. The largest newspaper publishes an edition in Mongolian.
Although Mongols in China have adopted some Han customs over hundreds of years, there are still cultural distinctions and taboos that strike visitors.
For example, dogs are loyal partners and friends for nomads, and one must never insult or beat a dog. Of course, dogs are not eaten, as in most parts of China.
Mongols have long believed in Tengriism, a Central Asian religion that combines shamanism, animism, totemism and ancestor worship. Ethnic Mongolians still pray to Munkh Khukh Tengri, the Eternal Blue Sky, and Mongolia (both the region and the country) is sometimes called the land of eternal blue sky. All things in the universe are revered and harmony between man and nature and among men is emphasized.
Visitors need to be sensitive and not show disrespect. For example, fire is especially revered, so it is forbidden to throw trash or cigarette butts into a fire. Do not step on exposed tree roots because that is considered an insult to tree spirits.
Arriving at a nomad’s yurt, visitors are treated graciously, and guests are likely to be served noodles instead of meat, as a sign of respect. For people of the grasslands, grain is far more valuable than meat, which is common.
We drove for about 50 minutes from Hailar to a nearby grassland where Mongols reenact the scene of Genghis Khan and his tribe settling down. A dozen Mongolian yurts stand there.
We were welcomed with beautiful songs and three shots of strong rice wine. Before drinking, it is customary to pay respect to the «eternal blue sky» and the ground by first dipping a finger into the wine, rising the finger to the sky, and then point to the ground. The ritual is more elaborate for Mongolians.
The main activity at this destination is the worship of aobao or cairn (man-made piles of rock). Aobao means piles of stones in Mongolian. In the ancient times, when nomads crossed the grassland, they would leave rocks along the way as markers so they could find their way back. Over time more travelers added more rocks, which became tall piles of stones, or cairn, and they took on a religious significance.
Worshipping aobao is a major and serious activity. One picks up a rock from the ground and wraps it with a strip of cloth. One then makes a wish to the cairn and walks around it clockwise three times. The ceremony is finished when the stone is tossed on top of the cairn, adding to the pile of prayers.
At Hailar District, we also visited the World Anti-Fascist War Memorial, built at the site of a sprawling underground Japanese fortification. During 1930s, the area was occupied and fortified as part of Japan-controlled Manchukuo, a puppet state in northeastern China.
Japanese occupiers enslaved and then massacred more than 10,000 Chinese who built five huge underground bunkers in Hailar District. Since all the Chinese involved in the construction, including translators, were killed, it was not known until the 1970s, when the one and only survivor, who was left with one blind eye, told the story.
The highlight of the memorial is a 500-meter-long trip into the underground bunker, whose ceiling is 15 to 20 meters below the surface. The temperature inside is 20 degrees Celsius cooler than on the surface. The dark and eerie underground area includes bedrooms for generals, dormitories for soldiers, cipher rooms, kitchens and toilets, storage space for food and weapons and other spaces. Most of the huge and complex structure has not yet been developed by the district.
The memorial uses hundreds of pieces of sculpture to depict how the allied army of the Soviet Union, China and Mongolia fought the Japanese. The sculpture depicts soldiers, tanks and aircraft.
On the streets we saw more Russians than Chinese since Manzhouli City is China’s biggest port of entry on land. There are frequently organized trips between the two countries.
The streets were filled with long-distance buses with Russian license plates, stores with Russian signs, and Russian tourists who were very familiar with the city.
Tourism is so lucrative that the city has attracted many souvenir-store owners from other parts of China, including the famous city of Yiwu, Zhejiang Province. Guides told us not to enter stores with signs only in Russian (Cyrillic ) since they are intended for foreigners only and the prices are more expensive. Some owners may refuse to sell to Chinese. Stores with signs in both languages are intended for visitors from all countries.
The guide told us that in 2006 and 2007, at the city’s busiest, a train crossed the border every 10 minutes, mostly carrying wood and coal in bilateral trade (China selling wood from its Greater Hinggan Range).
The trade slowed in the global economic downturn in 2008. Today trains cross about every hour.
The downtown is so prosperous it can be called a metropolis, with striking night scenes of glittering lights. It’s planned in an orderly street grid. Planners gave themes to each of a few major avenues and renovated buildings to match the names: Russia has an onion-dome, and other buildings are baroque, Italian and French.
Matryoshka (colorful nested dolls) Square is filled with matryoshka sculpture of all kinds and sizes. At night it’s lighted up, creating a fairy-tale ambience.
Around three hours’ drive from Hailar District is the Shiwei Russian Ethnic Township, selected as one of China’s 10 Charming Towns by China Central Television in 2005.
The town of around 1,800 residents is separated from Russia by the Argun River. Around 63 percent of the population are of mixed Chinese and Russian heritage. The main attraction is a Russian-style dinner and performances by Russian dancers.
Visitors can take a cruise along the Argun River where a Russian town is visible in the distance. More tourists are arriving and many wooden inns were under construction to provide accommodation.
Ergun City also contains a wetland park, with an undisturbed national eco-system.