China tackles the issues of Greater Mekong Subregion

This year, many of those present will have heard for the first time of a new multinational agreement driven by China that will play an increasingly important role – namely the Lancang-Mekong Cooperation or LMC (Lancang is China’s name for Mekong). It has been nicknamed “blueberry” as it sounds like the name of the fruit in Chinese.   

Yunnan, China’s southernmost province, has been designated by Beijing as a gateway to the GMS and Asean and the emergence of the LMC emphasises the dominant role China wants to play.

In many ways the LMC is a smaller version of Asean. Its three pillars are similar to Asean’s: political and security issues; economic and sustainable development; and social, cultural and people-to-people exchanges. But with just six countries involved and China at the helm, I expect results will come more quickly. This prospect is reinforced by the participants’ emphasis on practical solutions to the issues facing its members.

Recognising that GMS countries have common needs in industrialisation, infrastructure construction, agricultural modernisation and tourism development, the LMC has identified five priority areas: connectivity, production capacity, cross-border economic cooperation, water resources, agriculture, and poverty reduction.

Included are nearly 100 “early-harvest” projects focused on development, while China has also offered concessionary loans of up to 10 billion yuan ($1.54 billion) and up to $10 billion in credit lines to fund improvements to infrastructure and connectivity in all six countries.

Funding for water infrastructure is a key part of China’s support. This is no surprise, given that China controls the Mekong’s water flow from its source in Tibet down into Southeast Asia. 

Beijing has frequently been criticised for building so many dams along the river and restricting water supply at a time of severe drought brought on by the El Nino weather pattern. 

In March, for example, Vietnam formally requested Beijing to increase flows into the river to alleviate salinity levels in its rice plantations.

Clearly, China’s role in the formation of the LMC is another example of its deft use of “soft power” to increase its influence in the region.

 It will be a useful vehicle to try to alleviate the issues that have arisen due to the region’s shared resources. It will be interesting to see how the LMC develops, particularly how problems are resolved and investments are allocated between the participating countries.