Environmental groups opposed to China’s Three Gorges dam urged readers in full-page advertisements in the business section of the New York Times not to fund the dam project. In advertisements published on both the east and west coats of the US, environmental groups targeted China’s December 1998 bond offer to finance the dam.
Washington-based Friends of the Earth and California-based International Rivers Network (IRN) stated that within China the Three Gorges dam is bitterly opposed by scientists and concerned citizens. The advertisement claimed that since Tiananmen Square these dissenting voices are no longer heard.
Environmental groups argue that the project will do untold economic and environmental harm, and will fail to meet China’s need for clean inexpensive electricity and protection against floods. The groups urged individual investors to call their fund manager and insist that their money be used to ‘invest instead in appropriate energy and river management projects in China, because the last thing the people of China need is a monument to an obsolete regime’.
The US$35,000 ad campaign is part of an attempt to derail China’s December 1998 bond issue led by several US finance companies. Activists believe they can stop the Three Gorges project if they make a big enough dent in its foreign financing.
Chinese opponents of the dam have included academics, state hydro power officials and parliamentarians. The Nat-ional People’s Congress decided in 1992 to drop the dam, citing concern over environmental damage and a potential use of force to suppress popular protest and evacuate 1.2M people. The legislators were overturned by Premier Li Peng, who is regarded as the project’s main advocate.
In January 1998, China’s State Development Bank (SDB) issued some US$330M in Yankee bonds underwritten by J P Morgan, Lehman Brothers, Morgan Stanley, Credit Suisse First Boston, Smith Barney and BancAmerica Securities. The SDB is committed to raising US$3.6B for the Three Gorges Project Development Corp-oration, responsible for building the dam. A coalition of environmental groups from 14 countries wrote to US investment firms in November 1998, asking them not to back future bond issues. The companies had no immediate comment on the letters or advertisement, but some firms have since been in touch with the environmentalists.
China has had a tough time raising money for the Three Gorges dam after the World Bank and US Ex-Im Bank withdrew their support. US government agencies, the Bureau of Reclamation and the Army Corps of Engineers – who had provided consulting services for the project since the 1940s — also pulled out from the project in 1993.
The US withdrew its technical support partly because of doubts about the dam’s effectiveness in flood control and partly due to mounting pressure from environmental groups.
Japan’s Nomura Securities underwrote a Tokyo bond issue in 1997 but cancelled a second offering for 1998 after SDB’s connection to Three Gorges was disclosed.