Just transitions in the Mekong: China’s role in trade and investment

Second of four workshops sheds light on China’s influence in the Mekong region and opportunities for better engagement with Chinese stakeholders

Isis Sartori Reis & Tom Baxter

Pongphisoot (Paul) Busbarat, Director of the Institute of Security and International Studies at Chulalongkorn University, during group discussions held at the closed-door workshop on 29-30 August 2024

In collaboration with the Institute of Security and International Studies (ISIS Thailand) at Chulalongkorn University, Dialogue Earth and the Raoul Wallenberg Institute of Human Rights and Humanitarian Law (RWI) held a public panel and closed-door workshop in Bangkok, Thailand, between 28-30 August.

The panel explored China’s influence on sustainable development in the Mekong region, while the workshop focused on four key topics: China’s role in the Mekong subregion; operationalising the right to a healthy environment in Southeast Asia; media and environmental journalism; and understanding “Global China”.

This was the second in a series of four workshops (Latin America, Southeast Asia, Africa and Europe) aimed at building knowledge and dialogue on China’s involvement across these regions.

China’s expanding role in the Mekong

Thitinan Pongsudhirak, Professor and Senior Fellow of the Institute of Security and International Studies, speaking at the public panel event held at Chulalongkorn University on 28 August 2024

China’s strategic engagement in the Mekong subregion is rapidly growing, particularly in resource management, cooperation and infrastructure. In geopolitical terms, this involvement extends beyond the economic, touching political and cultural spheres, positioning China as an unmatched regional player. However, discussions highlighted that China’s role is highly nuanced and must be understood in the broader context of regional power dynamics.

Perceptions of China in the region are varied. For developing countries, China is seen as a crucial ally, with its infrastructure projects boosting connectivity and trade, while generating goodwill. Some argued that this is key for China as it aims to legitimise its investments and reduce the risk of opposition.

However, caution remains around the risks of debt, foreign ownership and undue influence. Laos and Cambodia, highly indebted to China, were discussed, with the Kunming-Laos railway (70% Chinese-owned) cited as an example of inequitable control and influence.

The environmental and social impacts of China’s projects also raised concerns. Hydropower projects along the Mekong and its tributaries have disrupted the river’s natural flow, raising concerns about the impact on fisheries and agriculture that depend on its nutrient-rich sediment and seasonal floods. Displacement of local communities and chemical pollution were highlighted as further negative outcomes of some Chinese investments. Participants emphasised the need to scrutinise why host countries allow such projects despite clear environmental and social risks.

There are alternative ways to engage with China, including promoting stricter adherence to environmental and social regulations. Participants called for greater coordination among Mekong countries and emphasised the proactive roles that media, civil society and businesses must play in both preventing and spotlighting harmful projects. Special attention was also drawn to the responsibility of governments in preventing negative impacts and ensuring that human rights are upheld.

China and Canada’s presidency of the Convention on Biological Diversity, including its leadership in the Kunming-Montreal Global Biodiversity Framework (2022), offers another opportunity for meaningful engagement on environmental issues. The leading role played by China in these instances is an opportunity to examine how the right to a healthy environment is implemented by China and others in the region.

Understanding local political dynamics 

Sam Geall, CEO at Dialogue Earth, during group discussions held at the closed-door workshop on 29-30 August 2024

A key discussion point was the importance of understanding local political economies when examining the China-Mekong relationship. Some participants argued that focusing solely on geopolitical and international factors overlooks important regional dynamics. For example, what motivates Mekong countries to engage with Chinese stakeholders? When they do, how do they attempt to shape that engagement? What approaches have succeeded or failed from the perspective of Mekong governments and people? These are important questions that too regularly get sidelined in discussions on Global China – a concern that was similarly raised in our workshop in Chile earlier this year.

Media and civil society are important actors in terms of holding stakeholders accountable on their social and environmental pledges. However, civil society spaces and the media landscape vary across Mekong countries. While Thailand’s media operate with relatively more freedom than its neighbours, Myanmar, Laos, Cambodia and Vietnam face significant restrictions, similar to China, which severely limits civil society’s ability to influence decision-making.

Geopolitical influence further shapes media and civil society. China’s concerted campaign to strengthen its so-called “discourse power” was highlighted, with initiatives like the Mekong News Network and media “junkets”, where Mekong journalists are invited to China for heavily-choreographed media tours designed to amplify its narrative. Chinese state media also cooperates with local outlets, which often lack the resources for independent reporting and therefore rely on materials provided by Chinese sources.

Mekong countries also face their own internal challenges, with one participant listing corruption, cronyism, income disparities and poor governance as persistent problems. These shortcomings make it easier for foreign investors to bypass safeguards, further complicating China’s impact in the region.

A clean, healthy and sustainable environment

Mrinalini Rai, Founder and Director of Women4Biodiversity, during group discussions held at the closed-door workshop on 29-30 August 2024

An important part of the workshop discussions focused on what “just transitions” mean for the Mekong region. One guest speaker emphasised that it’s not about a singular just transition, but rather about multiple transitions — ecological, social and economic. This broadened perspective highlights the need to ensure fairness not only to human beings but also to ecosystems and other species. The discussions revealed an interesting convergence: human rights advocates in the room underscored the importance of ecological approaches, advocating for fairness to the environment, while environmental experts stressed the need for people-centred approaches, ensuring that local communities are central to any development discussions. Both perspectives underscore that development should not just focus on economic growth, but must also consider the impacts on communities, their livelihoods and the ecosystems they depend on.

Stronger legal and political frameworks are needed to support fair transitions. Although ASEAN is developing an environmental rights framework, it lacks the robustness of Latin America’s Escazu Agreement. The 2022 United Nations General Assembly (UNGA) landmark resolution on the right to a safe, clean and sustainable environment is a significant international development in human rights law, furthering just transitions by building on regional, national and international commitments, including Principle 10 of the 1992 Rio Declaration on access to information, participation and justice.

The Kunming-Montreal Global Biodiversity Framework, also adopted in 2022, referenced earlier in this article, was highlighted again for its connection to the UNGA’s recognition of the right to a healthy environment. While green projects under the Belt and Road Initiative were also discussed, participants noted that, despite the legal and policy terminology which underpin them, enforcement and accountability remain weak, limiting their overall effectiveness.

Participants cautioned that green energy projects are not inherently just, responsible or even green, when considering their broader socio-ecological impacts. Examples included nickel mining in Indonesia and Myanmar linked to electrical vehicle manufacturing and dam projects affecting ecosystems and river communities. A key takeaway was that so-called “green” energy projects should also be responsible energy projects, minimising harm to both people and planet. Participants acknowledged that transitions involve trade-offs, with change inevitably creating some losers. While at the normative level all human rights are interdependent and indivisible, in practice, tensions often arise — particularly between the right to development and the right to a healthy environment. It is the role of policymakers to manage these competing interests and ensure that tailored and effective measures are put in place so that policies do not reinforce, but instead address pre-existing inequalities that disproportionately affect vulnerable populations.

Engaging China for green and just transitions

Malin Oud, Director of the Stockholm office and China Programme at RWI, giving the closing remarks at the last day of the closed-door workshop on 30 August 2024

The workshop concluded with a discussion on how to better understand and foster more effective engagement with China to achieve green and just transitions, focusing on identifying and addressing existing gaps in knowledge and strategies.

China’s overseas trade, investment and engagement are shaped by a complex network of stakeholders, including government agencies, private and state-owned companies and banks, which often have competing interests. “Unpacking” this web of stakeholders is crucial to gaining a more nuanced understanding of China – a point also previously raised in the workshop in Chile – though the opacity of Chinese governance and business structures makes this difficult. Tools are needed to help policymakers, journalists and activists navigate these complex challenges.

China’s actions should also be understood in relation to other global and regional powers. While China’s overseas investments, particularly the prevalence of state-owned companies, differ from those of Western countries, Japan and other big sources of foreign direct investment in the region, it is not unique in using its economic clout to influence its neighbours.  Seeing “Global China” in a relational context – as one participant put it – is important, as it does not operate in a vacuum; rather, it interacts with, and is influenced by, other global economic and political forces.

Ching Kwan Lee, Professor at UCLA, Robert Kibugi Associate Professor at the Faculty of Law, University of Nairobi and Tom Baxter, Project Manager at Dialogue Earth

On a less conceptual level, participants stressed the need for greater knowledge sharing between regions. Mekong countries can learn from how Africa and Latin America engage with China; case studies of these interactions were cited as useful resources.

Although there is no shortage of high-quality information on China’s overseas trade and investment, this information needs to be better curated, made more accessible to non-native English speakers, targeted to non-academic audiences and better disseminated.

The insights from Bangkok will inform the next round of discussions in Kenya next year, which will focus on China’s role in just transitions on the African continent.

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