(May 31, 1994)
THE THREE GORGES PROJECT IN THE CONTEXT OF PRESENT ECONOMIC AND POLITICAL CONDITIONS1
by Wu Jiaxiang2
Before a large project is carried out, the social, economic and political environments should be considered as well as questions of technical feasibility and profit. At present, these considerations do not favor the start of the Three Gorges project.
First, we are in a transition period in which a new dynamic system is replacing an old static one. Until this new system has been fully established, it cannot provide us with an efficient means to gather the extensive capital funds needed for the project. Indeed, there are many defects in the old system, which nonetheless retains its one advantage, that of attaining at any cost certain economic objectives.3 In this, some see a paradox-for example, a satellite is successfully launched into outer space, while toilets in apartment buildings leak every day with no means to repair them; there are too many missiles, but too few eggs.
Today, this old system is gradually being cast out, along with the so-called advantage. Since the old administrative methods for mobilizing resources are no longer as efficient as they once were, and since the project is not able to produce immediate economic profits, market incentives cannot be used to justify funding for the project. Therefore, it is likely that the project will become “long-and-dragged-out.” The progress of the project will be determined by whether it hits a bottleneck. Once it does, it will be halted. In order to eliminate such bottlenecks good money will have to follow bad. The glorious monument we had hoped the project would be might well become an ugly scar on the body of our motherland.
Second, the start-up of the Three Gorges project would increase the gap between supply and demand, which would narrow the bottleneck even further. The project would consume huge amounts of resources, especially those already in short supply, such as energy and raw materials, without producing profits in the near future. At the same time, enormous pressure would be brought to bear upon the already strained transportation and communication systems.4 Because of the lack of adequate materials, the ever growing demand for funding would surely result in the need to issue new currency, thus leading to more serious inflation and price increases.
Some may argue that if the project were built, the acute shortage of electricity would be eased. But this is a very long-range view that ignores immediate problems. Everyone knows that the next few years are the key transition period in construction and the development of reform. We must be extremely cautious when making important decisions and avoid any man-made instability that would bind us. I doubt whether our present economic conditions can continue to support us until the Three Gorges dam begins to generate power. The risks to our plans for national economic reform and development are too great.
Third, this particular stage, when neither old nor new rules and regulations can work effectively in our management and administration, offers numerous loopholes that could be taken advantage of. Experience shows that whenever the country completes a major project, a small group of people benefit, becoming “fat cats.” The bigger the project, the more fat cats. For instance, according to the newspapers, there have been some underworld gangs, the “Black Rings” for example, who frequent the Asian Game construction sites, in order to take legal or illegal advantage of these projects.4 This is happening even in Beijing, the capital city. Should the Three Gorges project, which is much larger both in scale and budget, be launched in a place where “the sky is high and the emperor is distant,” how much of the funding would disappear through such legal or illegal loopholes? Given our present management and administration systems, the Three Gorges project will become a “bottomless pit” demanding endless investment. In ancient times, the practice was to prepare provisions and supplies before setting out with horses and men. But now, the practice among some is to enjoy the benefits of funding even before beginning a project. Even at the site of the devastating Daxing Anling fire in Heilongjiang province in 1988, numerous cadres began fighting over promotions and privileges.
What is to keep the Three Gorges project from becoming nothing but a venue for those seeking promotions and privileges while showing off?
Finally, the Three Gorges project would invite social unrest through mass resettlement and price increases, which in addition to other, already destabilizing problems, could bring about a profound social crisis. The year 1990 is a peak time for the government to repay both its domestic and foreign debts. In the face of such a difficult financial situation, the Three Gorges project would be a terrible burden for the state.
Having read the assessment report on the project, I have found that the factors and elements I have just discussed were mentioned either perfunctorily or ignored altogether. Because of such important omissions the assessment is defective. I believe there is a need to reassess the project from a more comprehensive perspective. If those who did the assessment insist on the early start of the project, they must be prepared to take personal responsibility for its success and those who are in charge of implementing it should give their personal guarantee to the people of the country.
Sources and Further Commentary
1This essay was included in the original Chinese edition of Yangtze! Yangtze!
2Wu Jiaxuang is an economist and former researcher at the Office of Policy Research under the General Office of the Communist Party Central Committee. Wu was purged and jailed after the 1989 Tiananmen Square massacre.
3Namely, the capacity of the pre-1978 communist apparatus in China to mobilize the entire system of supply and transportation etc. for national goals.
4The pressure would be especially acute for the railroads, which already suffer severe bottlenecks throughout the country. See He, China on the Edge, pp. 65-89.
5Rumors of corruption surrounding contracts for the Asian Games and other large projects abound in Beijing.
Categories: Three Gorges Probe