China embarks on world's largest hydropower dam, capital markets cheer
HONG KONG : China's Premier Li Qiang announced construction had begun on what will be the world's largest hydropower dam, on the eastern rim of the Tibetan Plateau, at an estimated cost of at least US$170 billion, the official Xinhua news agency said.
Commencement of the dam, China's most ambitious hydropower project since the Three Gorges Dam on the Yangtze, was seized by Chinese markets as proof of economic stimulus, sending stock prices and bond yields higher today.
Made up of five cascade hydropower stations with the capacity to produce 300 billion kWh of electricity annually, equal to the amount of electricity consumed by Britain last year, the dam will be located in the lower reaches of the Yarlung Zangbo.
A section of the river falls 2,000m within a span of 50km, offering huge hydropower potential.
India and Bangladesh have already raised concerns about its possible impact on the millions of people downstream, while non-governmental organisations (NGOs) warned of the risk to one of the richest and most diverse environments on the plateau.
Beijing has said the dam will help meet power demand in Tibet and the rest of China without having a major effect on downstream water supplies or the environment.
Operations are expected sometime in the 2030s.
China's CSI Construction & Engineering Index jumped as much as 4% to a seven-month high.
Power Construction Corporation of China and Arcplus Group PLC surged by their 10% daily limit.
'From an investment perspective, mature hydropower projects offer bond-like dividends,' Wang Zhuo, partner of Shanghai Zhuozhu Investment Management said, while cautioning that speculative buying into related stocks would inflate valuations.
'The project will drive demand for construction and building materials such as cement and civil explosives,' Huatai Securities said in a note to clients.
Shares of Beijing-listed Hunan Wuxin Tunnel Intelligent Equipment Co, which sells tunnel construction equipment, surged 30%.
So did shares of Geokang Technologies Co Ltd, which makes intelligent monitoring terminals.
Cement maker Xizang Tianlu Co Ltd and Tibet GaoZheng Explosive Co, producer of civil explosive materials, both jumped their maximum 10%.
Broader impact
The Chinese premier described the dam as a 'project of the century' and said special emphasis 'must be placed on ecological conservation to prevent environmental damage,' Xinhua said on Saturday.
Government bond yields rose across the board today, with the most-traded 30-year treasury futures falling to five-week lows, as investors interpreted the news as part of China's economic stimulus.
The project, overseen by the newly formed state-owned China Yajiang Group, marks a major boost in public investment to help bolster economic growth as current drivers show signs of faltering.
'Assuming 10 years of construction, the investment/GDP boost could reach ¥120 billion (US$16.7 billion) for a single year,' said Citi in a note.
'The actual economic benefits could go beyond that,' Citi added.
China has not given an estimate on the number of jobs the project could create.
The Three Gorges, which took almost two decades to complete, generated nearly a million jobs, state media reported, though it displaced at least a similar number of people.
Authorities have not indicated how many people would be displaced by the Yarlung Zangbo project.
NGOs say the dam will irreversibly harm the Tibetan Plateau and hit millions of people downstream.
The Yarlung Zangbo becomes the Brahmaputra River as it leaves Tibet and flows south into India and finally into Bangladesh.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Star
2 hours ago
- The Star
Flurry of trade deals with US offers relief for some Asian countries, while others wait for more Trump antics
BANGKOK (AP): US President Donald Trump has announced trade deals with Japan and a handful of other Asian countries that will relieve some pressure on companies and consumers from sharply higher tariffs on their exports to the United States. A deal with China is under negotiation, with US Treasury Secretary Scott Bessent saying an Aug. 12 deadline might be postponed again to allow more time for talks. Steep tariffs on US imports of steel and aluminum remain, however, and many other countries, including South Korea and Thailand, have yet to clinch agreements. Overall, economists say the tariffs inevitably will dent growth in Asia and the world. Trump and Japanese Prime Minister Shigeru Ishiba announced a deal Wednesday that will impose 15% tariffs on U.S. imports from Japan, down from Trump's proposed 25% "reciprocal' tariffs. It was a huge relief for automakers like Toyota Motor Corp. and Honda, whose shares jumped by double digits in Tokyo. Trump also announced trade deals with the Philippines and Indonesia. After meeting with Philippine President Ferdinand Marcos, Jr., Trump said the import tax on products from his country would be subject to a 19% tariff, down just 1% from the earlier threat of a 20% tariff. Indonesia also will face a 19% tariff, down from the 32% rate Trump had recently said would apply, and it committed to eliminating nearly all of its trade barriers for imports of American goods. Earlier, Trump announced that Vietnam's exports would face a 20% tariff, with double that rate for goods transshipped from China, though there has been no formal announcement. Negotiations with China are subject to an Aug. 12 deadline, but it's likely to be extended, Bessent told Fox Business on Tuesday. He said the two sides were due to hold another round of talks, this time in Sweden, early next week. Meanwhile, Trump said a trip to China may happen soon, hinting at efforts to stabilize US-China trade relations. A preliminary agreement announced in June paved the way for China to lift some restrictions on its exports of rare earths, minerals critical for high technology and other manufacturing. In May, the US agreed to drop Trump's 145% tariff rate on Chinese goods to 30% for 90 days, while China agreed to lower its 125% rate on US goods to 10%. The reprieve allowed companies more time to rush to try to beat the potentially higher tariffs, giving a boost to Chinese exports and alleviating some of the pressure on its manufacturing sector. But prolonged uncertainty over what Trump might do has left companies wary about committing to further investment in China. Pressure is mounting on some countries in Asia and elsewhere as the Aug. 1 deadline for striking deals approaches. Trump sent letters, posted on Truth Social, outlining higher tariffs some countries will face if they fail to reach agreements. He said they'd face even higher tariffs if they retaliate by raising their own import duties. South Korea's is set at 25%. Imports from Myanmar and Laos would be taxed at 40%, Cambodia and Thailand at 36%, Serbia and Bangladesh at 35%, South Africa and Bosnia and Herzegovina at 30% and Kazakhstan, Malaysia and Tunisia at 25%. The status of talks with India remains unclear but progress appears to hinge on the country's heavily protected farm sector. It faces a 26% tariff. Nearly every country has faced a minimum 10% levy on goods entering the U.S. since April, on top of other sectoral levies. Even after Trump has pulled back from the harshest of his threatened tariffs, the onslaught of uncertainty and higher costs for both manufacturers and consumers has raised risks for the regional and global economy. Economists have been downgrading their estimates for growth in 2025 and beyond. The Asian Development Bank said Wednesday it had cut its growth estimate for economies in developing Asia and the Pacific to 4.7% in 2025 and 4.6% in 2026, down 0.2 percentage points and 0.1 percentage points. The outlook for the region could be further dimmed by an escalation of tariffs and trade friction, it said. "Other risks include conflicts and geopolitical tensions that could disrupt global supply chains and raise energy prices,' as well as a deterioration in China's ailing property market. Economists at AMRO were less optimistic, expecting growth for Southeast Asia and other major economies in Asia at 3.8% in 2025 and 3.6% next year. While countries in the region have moved to protect their economies from Trump's trade shock, they face significant uncertainties, said AMRO's chief economist, Dong He. "Uneven progress in tariff negotiations and the potential expansion of tariffs to additional products could further disrupt trade activities and weigh on growth for the region,' he said. - AP
The Star
3 hours ago
- The Star
Laos aims to improve workforce skills and also expand job access for its youth
VIENTIANE (Xinhua: The Lao government, in collaboration with its partner, has launched a skills testing and certification program to improve national workforce standards and promote fair employment opportunities nationwide. The programme was officially launched on Wednesday in Lao capital Vientiane, bringing together key development partners, private sector representatives, and other stakeholders, according to a report from the Lao Ministry of Labor and Social Welfare on Thursday. In his speech, Lao Deputy Minister of Labor and Social Welfare Phongsaysak Inthalath highlighted the importance of skills testing in assessing workers' abilities and recognizing informal skills according to national standards. He emphasized that certification allows experienced workers, especially those without formal qualifications, to gain official recognition, promoting lifelong learning and encouraging continuous upskilling to meet evolving market and technological demands. He added that skills testing is a vital tool for matching employees with suitable jobs and ensuring fair, skills-based pay. It also helps reduce labor turnover, retain skilled workers, and ease migration pressures. The program targets young people, early school leavers, low-skilled workers, and marginalized groups, aiming to equip them with market-relevant vocational skills to enhance their employment prospects and economic resilience. It also supports the government's broader efforts to empower women, youth, and self-employed individuals by improving access to quality skills training. A key goal of the program is to test and certify 250,000 individuals nationwide between 2026 and 2030, contributing to the development of a more capable, competitive, and inclusive workforce. The initiative is expected to boost Laos' socio-economic development by increasing productivity and preparing the labor force to meet the demands of both regional and global markets. - Xinhua
Malay Mail
4 hours ago
- Malay Mail
Xi calls for ‘proper handling of frictions' as EU-China summit cut short amid rising trade tensions
BEIJING, July 24 — Chinese President Xi Jinping urged top European Union officials today to 'properly handle differences and frictions' as he criticised Brussels's recent trade actions against Beijing at a tense summit dominated by concerns on trade and the Ukraine war. Expectations were low for the summit in the Chinese capital marking 50 years of diplomatic ties after weeks of escalating tension and wrangling that led to the duration being abruptly halved to a single day at Beijing's request. 'The current challenges facing Europe do not come from China,' Xi told visiting European Commission President Ursula von der Leyen and European Council President Antonio Costa, state news agency Xinhua said. He urged the EU to 'adhere to open cooperation and properly handle differences and frictions', after von der Leyen earlier called for a rebalancing of trade ties with the world's second largest economy, saying relations were at an 'inflection point'. 'Improving competitiveness cannot rely on 'building walls and fortresses',' Xi added, according to Xinhua. ''Decoupling and breaking chains' will only result in isolation.' 'It is hoped that the European side will keep the trade and investment market open and refrain from using restrictive economic and trade tools,' Xi said. EU trade actions in the past year have targeted Chinese exports of electric vehicles among other goods, and its officials have repeatedly complained about Chinese industrial overcapacity. Xi also warned EU leaders to 'make correct strategic choices', in a further veiled criticism of Brussels' recent hawkish stance on China. 'As our cooperation has deepened, so have imbalances,' von der Leyen told Xi during their meeting in Beijing's Great Hall of the People, according to a pool report. 'We have reached an inflection point,' she added, urging China to 'come forward with real solutions'. She was referring to the EU's trade deficit with China, which ballooned to a historic €305.8 billion (RM1.5 trillion) last year. 'We think increasing market access for European companies in China, limiting the external impact of involution, and reducing export controls are important steps forward,' von der Leyen told Premier Li Qiang later, according to a pool report. She described her meeting with Xi as 'excellent'. The two sides also issued a joint statement on climate, reiterating their commitment to new climate action plans across the whole economy. They will boost cooperation in areas such as energy transition, adaptation, methane emissions management and control, carbon markets and green and low-carbon technologies, the joint statement said. 'Lack of impetus' At the start of US President Donald Trump's second term, both sides had more of a consensus in working together to tackle trade challenges from the United States, said Cui Hongjian, a foreign policy professor at Beijing Foreign Studies University. 'Recently the situation has changed,' Cui said. 'The EU has continued to compromise with the United States, which means that there is currently a lack of impetus for EU-China ties to become closer.' After intense negotiations, the EU is likely to seal a trade deal with the United States for a broad tariff of 15 per cent on its exports, down from 30 per cent threatened by President Donald Trump. Today, Costa said the EU officials discussed 'at length' their expectations for China to discourage Russia in its war against Ukraine. 'We call on China to use its influence on Russia to respect the United Nations charter and to bring an end of its war of aggression,' Costa told Xi earlier. The run-up to the summit saw tit-for-tat trade disputes and hawkish European rhetoric, such as a July 8 accusation by von der Leyen that China was flooding global markets as a result of its overcapacity and 'enabling Russia's war economy'. In a posting on X, however, she struck a more conciliatory tone today, saying the summit offered an opportunity to 'both advance and rebalance our relationship'. Topics the Europeans were expected to raise in the talks are electric vehicles and China's rare earth export controls that disrupted supply chains worldwide, causing temporary stoppages in European automotive production lines in May. But China's exports of rare earth magnets to the EU surged in June by 245 per cent from May, to stand at 1,364 metric tons, though that was still 35 per cent lower than the year-earlier figure, customs data showed. Today, China's foreign ministry defended the rare earths curbs as being 'in line with international practice', while pledging stronger dialogue and cooperation with relevant countries and regions in the field of export controls. — Reuters
