(November 29, 1995) American corporations have asked the United States Export-Import Bank to subsidize their exports to the controversial Three Gorges dam in China and Ex-Im has asked environmental and human rights groups for financial, technical and environmental information to help it decide whether or not to do so.

Ex-Im, which provides insurance and financing to help American companies win contracts abroad, will hear from concerned groups and citizens at a meeting today in Washington.

Meanwhile, the latest reports from China indicate the project’s cost has increased 16-fold since 1986. According to Dai Qing, China’s most famous female journalist who was jailed for publishing her critique of the dam, Chinese officials recently acknowledged the huge increase in the cost of the dam: Lu Youmei, the head of the Three Gorges Project Development Corporation admitted to Jiang Zemin, China’s top leader, and Zhu Rongji, China’s economic czar, on an inspection of the dam site four weeks ago, that the current cost of the dam is estimated to be $75 billion, up from $4.5 billion in 1986.

In fact, the project has become so contentious inside China that, according to Dai Qing, it “has emerged as one of the two fault lines in the Communist Party, becoming the focal point of a high level power play, comparable to the struggle over how to handle the June 4, 1989 massacre in Tiananmen Square.”

China’s Three Gorges dam is the largest construction project in the world and will forcibly resettle over one million people. Proponents claim it will generate needed electricity, provide flood control and ease navigation on the Yangtze River. Critics, however, contend that the 2-km-wide dam, which is being built over several seismic faults, would actually cause flooding and disrupt navigation. In addition, they argue, sedimentation would destroy the dam’s turbines in less than ten years.

In written submissions to the Ex-Im Bank, environmental groups have already expressed grave concerns about potential Ex-Im involvement in the project. “American taxpayers would be put at risk while the economy, environment, and lives of millions of Chinese citizens would be threatened if Ex-Im supports this unsound and politically explosive project,” said Patricia Adams, executive director of Probe International, a Canadian organization that has published two books condemning the dam.

Meanwhile, in a thinly veiled threat, the highly litigious American environmental group Defenders of Wildlife, claims in its letter to Ex-Im that participation in the Three Gorges project “would not only represent an abdication of U.S. environmental and political leadership, but also a clear violation of U.S. law.” In addition, says the group, building the dam would destroy or degrade the habitat of a number of threatened species, including the highly endangered Chinese river dolphin, of which fewer than 200 are believed to remain.

Ex-Im has also been asked by the U.S. administration to stay away from the project. After a recent National Security Council review, the White House sent a memo to Bank president Kenneth Brody urging Ex-Im to “refrain from offering commercial assistance in connection with the Three Gorges project.” The letter cites legal, environmental, financial and human rights concerns as factors in the administration’s decision to ask Ex-Im to steer clear of the dam.

Canada’s own Export Development Corporation is also considering financing a $34.5 million computer contract for Three Gorges but has shown no interest in conducting a similar public review or collecting independent expert opinions on the project.

Three Gorges Probe, November 29, 1995