Dam diplomacy? China’s new neighbourhood policy and Chinese dam-building companies

This analysis examines whether the Chinese state has transformed state dam-construction firms engaged abroad into agents of ‘hydro-diplomacy’ to reflect larger diplomatic initiatives to improve relations with neighbouring countries. It concludes that there is little evidence of strengthened direct oversight over Chinese dam-building companies in the region, which remain principally profit-seeking actors. In implementing projects, they prioritize the standards of host countries over the strategic concerns of the Chinese state. This suggests that either the ‘agency costs’ of hydropower firms’ behaviour remain acceptable to Beijing or there are other impediments to policy change.