Crazy Dam Fever Plagues China!

Posted on: July 10th, 2012 by Harmony Foundation No Comments


The 185-meter-high Three Gorges Dam was the biggest water dam in the world when it was completed On May 20, 2006.  The construction displaced millions of people and has had enormous environmental impacts during construction and beyond.

While the Chinese government was proud of creating this “miracle,” huge environmental impacts started to hit China soon thereafter. In the spring of 2011, seven central and eastern provinces and Shanghai were experiencing serious water shortages. This was the driest season in China in 50 years. While authorities blamed the problem on global warming, many experts dismissed such claims, recognizing that more frequent and longer lasting droughts occurred since the huge dam came on stream.


Criticism of the environmental, ecological and social damage from Three Gorges Dam has never cooled down, yet the fever for hydroelectric dam construction keeps getting even hotter despite scientific warnings. According to a June 2nd 2011 article from China [1], there were over 5200 dams over 30 metres high in China either constructed or under construction. You can say that along any well-known river in China there are hydroelectric dams. By 2020, most planned hydro projects will have been completed in nearly all areas except Tibet, and now China is focusing its thirst for hydro to Jinsha, Lancang, Anger River and Yarlung Zangbo Rivers in Tibet.



The Yellow River, the “cradle of Chinese civilization,” is the second-longest river in China after the Yangtze and the sixth-longest in the world at the estimated length of 5,464 kilometers.  Over 3300 dams were built along it, and it eventually dried out. For nearly the entire year of 1997, no water at all flowed into the sea from the Yellow River. [2]


The Jiulong River in the south of China, the mother river, once flowed through Longyan, Zhangzhou and Xiamen cities. Then the Jiulong River disappeared; cut into hundreds of unconnected ponds. The ecology along river is totally changed. In Zhangzhou alone, there were 920 hydroelectric plants in 2010; while in Longyan, the number already reached 1072 by 2007.  In Zhangzhou, over 100 fish species are extinct, and in Longyan, over 30 more vanished from the river. [3]


Apparently China didn’t learn the lessons from either the Yellow River or the Jiulong River. The same tragedy is happening to the Yangtze River now.


The Jinsha River, about 2308 kilometer long with catchment area of about 500 thousand square kilometer, is upstream from the Yangtze River. Its watercourse contributes about 40% of the Yangtze River. The Jinsha River will be divided into many sections by 25 hydroelectric dams under planning, which will generate as much electricity as four Three Gorges Dams put together, and become a gigantic cluster of reservoirs with an average of one hydroelectric dam every 100 kilometers.


Chinese geologist Fan Xiao of the Sichuan Geology and Mineral Bureau in China warned that the Yangtze River will run dry with so many dams along the river, that their combined reservoir volume would exceed the Yangtze’s flow.


Hold on a second! You are probably asking, “why does the hydroelectric development chaos in China matter to Canada?” Good question. Let’s take a deeper look at the roles Canada played in Three Gorges Dam. Pat Adams of Probe International made it clear commenting that, “the problems at the Three Gorges aren’t just a Chinese problem, as it’s often portrayed; it’s a world-wide issue, with responsibility in other countries.” [4]


In 1986, China picked a consortium funded by Canada to carry out a feasibility study on damming the Yangtze River in the Three Gorges region. By then, Canada was a leader on hydroelectric power. The report came out supporting Three Gorges Dam with one condition “the water depth should not exceed 160 metres.” However, China decided to go with 180 metres. Initially in 1992, Canada’s international development agency (CIDA) withdrew support, citing concerns about economic viability and social dislocation. Many other western governments initially refused to support China to build this huge dam too. However, in 1994, recently elected Canadian Prime Minister Jean Chretien led a trade mission to China and surprised Canadians by announcing his government’s support for Three Gorges Dam. No surprise that other western countries, such as Germany, Switzerland, Sweden and French, followed. [5]


Probe International asked the key question for us – how could a country with a reputation for being peacekeepers to the world, morally upstanding, and environmentally sound give the Three Gorges Dam the credibility and financing it desperately needed?


The companies that gave life to the Three Gorges Dam are BC Hydro International, Hydro-Quebec, SNC-Lavalin and Acres International. Who financed Three Gorges in Canada? AGRA Monenco, an international engineering and construction management company signed a $25million contract in 1994 and another for $12.5 million in 1995, with Canada’s Export Development Cooperation (EDC) financing this contract. Dominion Bridge Inc. signed a $64 million contract with Chongqing and Sichuan Province, and EDC financed $23.5 million of this contract. General Electric of Canada, in a consortium with Siemens and Voith-Hydro, German engineering companies, signed a $320 million contract in 1997, and EDC provided $153 million to finance GE Canada.  Hydro-Quebec International signed a $1.9 million contract with China Power Grid Development Company. [6]


Now, let’s think back to what Pat Adams said about “responsibilities in other countries.” If we contribute to harmful decision which lead to negative indeed nasty impacts in another country, shouldn’t we take responsibility for that?


The poor decisions may have been Chinese but the enablers were Canadian businesses and agencies willing to put aside social and environmental concerns and responsibilities to gain lucrative contracts and curry favour.


How are we doing now? Canada’s campaign to ship oil sands crude to China certainly offers major clues that short-term political and economic ambitions trump humanitarian and environmental concerns and responsibilities for Canadian decision-makers.


Chinese Investment in Canadian Energy and Natural Resources: Boon or Bogey Man?

Posted on: May 10th, 2012 by Harmony Foundation No Comments


Since Prime Minister Harper changed his government’s policy on China, Canada is welcoming, indeed encouraging Chinese investment. According to Department of Foreign Affairs and International Trade, “The stock of foreign direct investment into Canada from China reached approximately C$14 billion at the end of 2010. Chinese firms are actively investing abroad and have expressed a strong interest in investing in Canada. Sectors of interest include natural resources, renewable energy, information and communication technology, food processing, pharmaceuticals and natural medicine, and advanced manufacturing.” [1]

Are Canadians concerned, should we be concerned? According to Canadian Press-Harris Decima survey in February 2012, 51% of Canadians welcomed Chinese investment in Canada, while 71% felt badly if Chinese companies took majority control of an existing Canadian-owned operation.
Canadians do have a few concerns about China’s investment in natural resources. First of all, most of China’s investors in natural resources and energy are State Owned Enterprises (SOEs), who are considered by many as government agents, raising concerns China ‘s government will control some of the natural resources in Canada through its SOEs; second, because China lacks enough of its own resources, there is concern it will exploit Canada’s natural resources too rapidly to fuel its development needs; third, China’s investors and collaborators in Canada might bring short term contract workers from China to work in Canada.
The BHP bid on Potash exemplifies these concerns. In Aug. 2010, BHP Billiton (Australia), the largest mining company in the world, offered $38.6 billion in a takeover bid for PotashCorp in Saskatchewan, the largest Potash producer in the world. Meanwhile, China’s SOE Sinochem was looking for potential partners to mount a counter-offer. The Conference Board of Canada completed a report “Saskatchewan in the Spotlight” to help the provincial government to make their decision. This report says “BHP Billiton’s proposed takeover of PotashCorp could reduce Saskatchewan government revenues by at least $2 billion over the next 10 years”.  Under the scenario that Sinochem buys PotashCorp and adopts a “high production” approach, the possible reduction of revenue for Saskatchewan over a decade would be $5.7 billion. Eventually the bid by BHP Billiton was blocked by the Minister of Industry Tony Clement under the “net benefit to Canada” provision of Canada Investment Act on Nov. 3rd, 2010.
What’s interesting is that CBC held a poll online to solicit predictions on the BHP bid. 25.14% predicted that BHP would win the bid while only 9.85% thought China would buy PotashCorp. [2]
While the accelerated development concern seems real, the view held by many that most of China’s investment in Canada is in natural resources and energy does not match with results to date.  In fact, Asia Pacific Foundation’s research on China’s investment in Canada shows that in 2010, 44% of China’s investment in Canada was in business service, while 8.3% was in mining, dropped from 10.4% in 2008. [3]
Another concern expressed is the danger of Chinese domination. While it is true that Chinese investment in Canada has grown significantly in recent years, its overall scale compared to America and Europe is still small. In 2011, US invested $326.1 million in Canada while China’s investment was only $10.9 million.

Finally, concerns are being raised about Chinese environmental performance. In June 2010, China published “Environmental Performance Guidelines for China’s Overseas Investment,” covering environmental impact assessment, protocol protection mechanism, ecological compensation and corporate social responsibilities.
One can only conclude at this time that, whether or not China or any other foreign investor is a problem for Canada, whether control of essential industries or sectors, domination of Canadian business, undesirable influence over decisions of strategic national importance or weakening of labour, public health and environmental protection, is up to us.
We need to strongly encourage our governments to protect our interests and not compromise under pressure from business to give priority to their ambitions. Regarding China, let’s take the opportunity to help Chinese investors make responsible investment in Canada, better inform them about CSR in Canada, and where needed pressure Chinese companies to be social and environmentally responsible in Canada, at home and around the world. In this way we not only protect our own interests but also contribute, as we should, to improving conditions globally.
Major investment from China in Energy & Resource in Canada in the Past Three Years


  • Jan. 2012, PetroChina bought Athabassca Oil Sands Corporations’ remaining stake  (40%) in the Mackay River project with $1.9 billion, which made PetroChina the first Chinese company having full ownership of an oilsands project
  • Nov.2011, CNOOC acquired Opti Canada, a financially troubled Calgary company, with US$2.1 billion; in return, CNOOC gains a 35% stake in the Long Lake oil sands project.
  • Oct. 2011, Sinopec bought Daylight Energy Ltd. for $2.2 billion.
  • Aug. 2011, Jilin Jien Nickel would invest another $400 million in its nickel extraction project in Nunavik, which makes the total investment $800 million after it acquired Canadian Royalties Inc. in 2010.
  • May, 2011, Baosteel purchased Noront Resources’s 9.9% equity with $17.4 million (the percentage could raise from 9.9% to 14.15% with extra $11.7 million)
  • Apr. 2011, Jinchuan Group acquired Continental Minerals with $431 million
  • Jan. 2011, Wuhan Iron & Steel Group (WISG) and Adriana Resources (ADI) signed agreement that WISG would pay ADI $120 million for a 60% participating interesting in a joint venture in the Lac otelnuk and December Lake iron ore properties in Northern Quebec
  • Sept. 2010, XinXing Pipes Group Co. agreed to invest up to $1 billion into an iron ore mining project in Nunavut
  • Aug. 2010, CRCC-Tongguan Investment Co., a jointed-owned direct subsidiary of Tongling Nonferrous Metals Group Holdings Co., Ltd. and China Railway Construction Corporation Limited, acquired 100% of Corriente Resources, a Vancouver based copper company, with $679 million.
  •  May 2010, CIC invested $1.25 billion to a joint-fund company with Penn West Energy.
  • Apr. 2010, Sinopec paid USD$4.65 billion to Syncrude Canada Ltd. for a 9% stake in Syncrude owned by Conoco Phillip.
  • Feb.2010, PetroChina completed the acquiry of Athabasca’s 60% interest of macKay and Dover oil sands projects.
  • Dec. 2009, Yunann Chihong Zinc and Germanium Co. Ltd. and Selwyn Resources signed agreement for Chinhong to earn a 50% joint venture interest in the Selwyn project by spending $100 million on exploration and development.
  • Oct. 2009, CIC invested $500 million in convertible bonds of SouthGobi Energy Resources Ltd. to help SouthGobi accelerate its coal mining and exploration activities in Mongolia.
  • 2009, CIC invested $1.74 billion to buy 17% of Tech Resources Ltd’s equity.
  • 2009, China State Grid Corp signed a MOU with Quadra Mining Ltd. (QuadraFNX Mining Ltd.) on an investment of $1billion.
  • March 2009, Wuhan Iron and Steel Group (WISG) invested US$240 million and became the biggest shareholder of Consolidated Thomson Iron Mine Ltd. (CLM); it owns 19.9% of CLM’s share, 25% of CLM’s BloomLake project and 50% product from that project.


The Canadian-Chinese Trade Relationship

Posted on: April 10th, 2012 by Harmony Foundation No Comments

China is now world’s second largest economy. The centre of global manufacturing, China is the world’s largest importer and its second largest exporter. By all economic indicators China has risen, and with sustained double digit growth is indeed still rising.This phenomenal transformation happened as companies across the world raced to relocate production to take advantage of low wages and a potential market of 1.3 billion people, including an emerging middle class that, according to the market research firm Euromonitor, has already reached 80 million and will grow to 700 million by 2020.
China has become an increasingly important trading partner for Canada too. While still dwarfed in volume by the United States, China has become our second biggest import destination (10.9% of imports compared to the US with 51%) and our third biggest export destination (3.1%, compared to the UK with 3.36% and the US with 75%).
In the lead up to the G8 and G20 summit, Premier Hu and Prime Minister Harper pledged to further that relationship and to double bilateral trade by 2015 to $60 billion.
This projected increase may be good for Canada if we get it right. As the recent recession made painfully clear, the American greenback is not infallible and if Canada is going to maintain its economic strength in the 21st century it is going to need to diversify its trade portfolio. With its soaring economy and prospects for the future, it only makes sense that China should play an increasingly larger role in Canada’s future trade strategy.
However, the crucial point is just that: Canada’s trade with China must be managed as a part of a forward-thinking and comprehensive strategy.
At the moment, Canada’s trade relationship with China is one of great imbalance. China sells us cheap consumer goods and electronics and we, almost exclusively, sell them raw resources— agricultural produce, pulp, lumber, oil and gas, coal, minerals, metallic ore. A table of the top ten imports and exports is included at the bottom of the post.
There are several problems with this current trade relationship. First of all, it is problematic from a Canadian point of view because natural resources are inherently unstable. Some natural resources— such as those in agriculture and forestry – produce at the whims of nature. The potential for bad weather, disease, and pests can all lead to sudden unforeseen disaster. More important however, all natural resource exports are unreliable in the sense that they are commodities that lack a unique selling point. Pulp from BC is not much different than pulp from elsewhere in the world, and the same goes for Alberta’s oil, Manitoba’s canola seeds, or Saskatchewan’s potash. If there is a sudden surge of output or a change in demand anywhere in the world, Canadian prices will be affected. Subject to intense competition and the fluctuations of natural systems and the international market, Canada’s current export base is at the mercy of forces well beyond our control.
Another problem with this current relationship is that it is not forward looking. It is representative of a past age, with Canada the hinterland supplying the needs of “metropoles” elsewhere in the world. If Canada’s role in the chain of production remains unchanged, China is merely replacing the United States, and the United Kingdom before that. If Canada wants to remain a global economic player we need to be more creative and much more innovative.
At the moment there is an enormous opportunity in the world for those actively engaged in the development of low-carbon and other “green” technologies. Rising energy costs, increasing resource scarcity, and a growing awareness of the enormous risks from climate-change, offers great potential for technologies and expertise that improve efficiency and reduce our environmental footprint.
According to estimates from a 2009 report by Roland Berger Strategy Consultants Clean Economy, Living Planet clean energy technologies will be the third-largest industrial sector in the world by 2020. The water treatment industry in China alone is projected to be worth $1 trillion by 2025. The global demand for green technologies is already on the rise, and, according to a 2009 report by the Canadian Conference Board, the green tech industry has grown at about 10 per cent each year between 2002 and 2008.
While making strides towards an environmentally sound, economic base, Canada does not have to reinvent itself. Our long history with natural resources and our natural geography give us definitive advantages over other countries, notably in waste management, water treatment, and energy-efficient resource extraction technologies. Canada may also be able to develop strengths in wave and tidal power and the next generations of biofuels.
While the opportunity is there, Canada is largely missing out. From 2002 – 2008, the same time period of global growth in the industry, Canadian trade in the green-tech sector actually shrunk by 2% a year, when adjusted for inflation. Comparatively, from 2000 – 2009 Canada’s oil production increased by 85%. Considering that oil prices will increase as demand rises and supply falls, this liquidation of our energy assets is simply bad business. At the same time, neglect of low-carbon energy— undoubtedly the energy sector of the future— is simply bad long-term economic policy.
The stimulus funding of 2009 presented a great opportunity for Canada to invest in the green economy. In the midst of the recession UN Secretary General Ban Ki-moon called for a “Green New Deal” with investments focused on renewable green energy, green jobs and greater energy efficiency. Many of the world’s most powerful economies responded. South Korea allocated 78% of its stimulus to the green economy, and China 30%, and the US 12%. Canada spent just 8.8% – which placed us 10th in the ranking of the G20.
Furthermore, according to a recent report, nearly half of that 8.8% was slated for funding of profitable oil companies for unproven carbon capture and storage technology.
Unfortunately in the past year not much has changed. According to the same report, entitled Falling Behind: Canada’s Lost Clean Energy Jobs produced by Environmental Defense Canada and United Steel Workers, in 2009 Canada invested just $357 million on renewable energy, compared to the US which spent $27 billion. Even on a per-capita basis the US invested almost 9 times more than Canada. The report estimates that this investment gap already has cost Canada 66,000 direct and indirect jobs, not including the job opportunities lost in greener transportation and energy efficiency.

In stark contrast to the lackluster incentives given to green economic development, the Canadian government gives the oil and gas industries $2 billion a year in subsidies and tax relief, according to the Pembina Institute’s most recent estimate. This is an industry with annual revenue of $80 billion, and while profits have been down since their record highs in 2008, profits posted this quarter indicate a strong come back. In fact, following the catastrophe in the Gulf of Mexico the Albertan oil sands are looking more and more appealing to US buyers and the Canadian industry’s prospects are looking brighter than ever. Subsidies of this scale for an industry that is this profitable are absolutely ridiculous.
Canada’s oil and gas industry simply does not need government support. This is a fully mature industry that is more than capable of standing on its own two feet. Not only that, but those feet are firmly planted where they stand. Unlike other industries, like automotives, there is no risk of flight with the oil patch. The resource is ours and unlike an assembly plant it is not at risk of being moved elsewhere, no matter how much the oil and gas industry blusters.
China is already on board for pursuing a more sustainable path to economic development. They have acknowledged that their current approach simply cannot be maintained. While the West polluted its way to development and managed to put off dealing with its consequences, China cannot do the same. They are already choking on their own growth, reeling from the effects of unprecedented levels of smog, desertification, water contamination, and deforestation, to say nothing of the human costs.
In a nationally televised speech, which opened the annual session of the National People’s Congress in 2007, Premier Wen Jiabao announced:
“We must make conserving energy, protecting the environment and using land efficiently the breakthrough point and main focus for changing the pattern of economic growth.”
China is showing leadership and taking the initiative to chart sustainable economic growth and development. Canada needs to reassess its economic priorities in general, but needs to re-evaluate its relationship with China in particular. China’s economy is going to drive the 21st century, and how Canada relates to that economy is going to determine our future in this new century. We can continue to be hewers of wood and haulers of water or become leaders in the research and development of the technologies and methods which the world needs to ensure a healthy, sustainable, and secure future, as do we.