Socioeconomic Vulnerability in China's Hydropower Development

45 Pages Posted: 21 May 2008

See all articles by Phil Brown

Phil Brown

GeoSource Capital Solutions

Darrin Magee

Hobart and William Smith Colleges

Yilin Xu

Colby College - Department of Economics

Date Written: May 2008


Approximately 78% of China's electricity demand is met by burning coal, which has taken a serious toll on the environment. Hydropower represents a sustainable alternative source, and China already derives 16% of its electricity supply from hydropower. However, evidence from other hydroelectric projects such as the Three Gorges Dam suggests that the socioeconomic consequences of such large public works projects are enormous.

A series of dams has been proposed for the middle and lower reaches of the Nu River (Upper Salween) in Yunnan Province. If completed, the 13-dam cascade would have greater power-generating potential than the Three Gorges Dam. However, the Nu is considered to be the last "virgin" river in China, and many of the proposed dams are located in an environmentally-sensitive area. Moreover, approximately 50,000 people - many of them ethnic minorities - would be forced to resettle by the resulting reservoirs. Finally, the economic status of northwestern Yunnan is quite low, suggesting that socioeconomic vulnerabilities among the displaced population would be quite acute. Although construction has officially been halted, surveying has begun on at least five of the dams, and recent news reports indicate that the actual construction process has begun on one of these.

After providing a detailed account of China's electricity supply, this paper quantifies China's hydropower potential. We then describe the socioeconomic effects of population displacement from dam development using the Three Gorges Dam as a case study. Next, we provide a detailed economic profile of the Nu River area, arguing that poor farmers from disparate language groups are more likely to face extreme vulnerabilities in the resettlement process. Finally, we employ microevidence from interviews of affected households to demonstrate that the dam construction process in western Yunnan has been neither transparent nor consultative.

Keywords: electricity supply, dams, hydropower, displacement, Nu River

JEL Classification: 013, P28, Q2

Suggested Citation

Brown, Phil and Magee, Darrin and Xu, Yilin, Socioeconomic Vulnerability in China's Hydropower Development (May 2008). Available at SSRN: or

Phil Brown

GeoSource Capital Solutions ( email )

PO Box 535
Charles Town, WV 25414
United States

Darrin Magee (Contact Author)

Hobart and William Smith Colleges ( email )

Geneva, NY 14456
United States

Yilin Xu

Colby College - Department of Economics ( email )

Waterville, ME 04901
United States

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