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Construction on a grand scale is nothing new in China. Begun in the 7th century BC and extended and renovated under various dynasties up until the 16th Century AD, China's Great Wall at over 6,000 kilometres in length stands as a testimony to the Chinese people's engineering and organisational skills. No less a feat was China's Grand Canal, extending around 1,800 kilometres from Beijing to Hangzhou, East China, and begun in 486 BC and constructed over a 2,000 year period up until the time of the Ming Dynasty (1368–1644).
Then, of course, there is the Three Gorges Dam Project, billed as the world's largest hydroelectric power project. This US$27 billion project was begun in 1993 and is due for completion in 2009. When completed, it will have displaced some 1.2-1.3 million people in some 22 cities and counties. With a 185 metre high wall and a 600 kilometre long by 1.1 kilometre wide storage area, it will produce some 85 billion kwh of electricity per annum, enabling China to restructure its coal-dependent energy sector which is a major source of pollution. Added to this are plans to construct a further four dams (beginning by 2005) in the upper reaches of the Yangtze River with twice the generating capacity of the Three Gorges Project.
However, such grand construction schemes will be overshadowed by a new project (the South-North Water Diversion Project) begun on 27 December 2002 after some fifty years of planning and feasibility studies. First proposed in 1952 by Mao Zedong, work has begun on the first of three phases of this massive project that will take water from the Yangtze River (China's longest and the world's third longest river) and direct it towards China's drought-plagued north. Expected to cost at least twice the Three Gorges Dam project, it will involve the construction of three canals each at least 1,300 kilometres long. It will deliver to the north around the annual flow of the Yellow River (China's second longest river).
The eastern section, which should be completed by 2007, will link with the northern section of the existing Hangzhou-Beijing Grand Canal. The central canal will involve the raising of the massive Danjiankou Reservoir in Hubei Province so that water will flow under gravity to Zhongzhou (capital of Henan Province), where it will enter a tunnel under the Yellow River and flow towards Beijing. The western canal will channel water from the upper reaches of the Yangtze to the upper reaches of the Yellow River with construction to start in 2010 and to be completed in 2050. The latter is to be an important component in China's 'Go West' campaign.
Water resource equalisation, hydroelectric power, a fiscal stimulus to the domestic economy, increased employment opportunities and flood mitigation are some of the important benefits mooted. The Yangtze basin is home to some 400 million people and floods regularly endanger life and property. Floods in June-August 2002 affected some 70-100 million people and left around 800 people dead. Yet the scheme has its critics. They remember the devastating floods in 1998, when poorly constructed levee banks collapsed worsening the impact of the floods, which left some 4,150 people dead. However, there have been efforts to crack down on profiteering and shoddy construction and to monitor the outcomes of the public bidding process.
Then there is the loss of valuable farmland, the problem of silting, possible earthquakes and geological instability, the environmental and ecological consequences, damage to historical sites and the required relocation of some 275,000 people. Such projects do not address the current problem of deforestation and inappropriate land-use, resulting in landslides, flash floods and lowered water retention rates. The Yangtze itself has been facing drought, with December 2002 water levels dropping to a 10-year low. Per capita water reserves in the Yangtze River valley have slid from 2,700 cubic metres in 1980 to 2,100 cubic metres last year.
Whilst the rise and fall of dynasties in China has been closely linked with natural disasters, is this simply another Stalinist or Imperial 'grand fix-it' or is it a visionary policy to secure China's long-term future?
WATCHPOINT: Will the benefits outweigh the not insubstantial economic, environmental and human costs?
About our company:
AFG Venture Group is an Asia and Australia based corporate advisory and consulting firm with over 20 years experience in creating alliances, relationships and transactions in Australia, South East Asia and India; including a 15 year history of corporate and equities advisory in Australia, undertaking merger, acquisition, divestment, fund raising and consulting for private and public companies.
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