Today’s Spotlight: Controversy Surrounding Commencement of Massive Project in Mainland China; Lack of Key Data Raises Eyebrows; Billions in Investment, Why is the “Yaxia Project” Questioned as Unfinished? US-China Negotiations Conclude with Tariff Decision Pending, Trump to Make Final Call.
On July 19th, the new state-owned enterprise of the Chinese Communist Party, the China Yajiang Group, was announced in Beijing. On the same day, the Yarlung Tsangpo River downstream hydropower project led by this group, known as the “Yaxia Project,” officially began construction in Nyingchi, Tibet.
Xinhua News Agency reported that the project mainly adopts a development method of direct cutting and tunneling water diversion, with a total investment of about 1.2 trillion yuan.
What draws attention from the public is that apart from the total investment amount, the Chinese state media did not provide any engineering data about this hydropower station, especially concerning installed capacity and power generation, which goes against not only common sense but also the usual practice of global hydropower projects.
Only the magazine “Caijing” mentioned in an article that industry insiders estimate the future installed hydropower capacity of the Yaxia hydropower project to be between 60,000 to 70,000 megawatts, about three times the total installed capacity of the Three Gorges Dam.
However, this is just an estimation from industry peers and not the official data of the “Yaxia Project.”
Chinese hydropower expert residing in Germany, Wang Weiluo, pointed out that this data primarily comes from 2020 when Yan Zhiyong, then Chairman of China Power Construction Corporation Limited, said, “The installed capacity is roughly equivalent to three Three Gorges power stations, providing nearly 300 billion kilowatt-hours of electricity each year.”
So, what’s the story behind this? Let’s start with the Yaxia Project itself:
China is the world’s largest producer and consumer of electricity. According to the “2024 China Electricity Market Development Report,” in 2024, China’s total electricity generation was 10.09 trillion kilowatt-hours, while the total electricity consumed by society was 9.85 trillion kilowatt-hours. In other words, China’s electricity generation far exceeds its usage. In 2024, the surplus electricity generation was about 240 billion kilowatt-hours.
What does 240 billion kilowatt-hours of electricity mean? Let’s compare: In 2023, the Three Gorges Dam generated 80.3 billion kilowatt-hours of electricity, meaning that the surplus electricity in 2024 was almost three times the annual production of the Three Gorges Dam.
For example, in 2024, the combined electricity generation of six cascade hydropower stations, including Udungde, Baihetan, Xiluodu, Xiangjiaba, Three Gorges, and Gezhouba, was 295.9 billion kilowatt-hours. This implies that the vast majority of the electricity produced by these six hydropower stations was surplus.
In essence, China does not currently face an electricity shortage. The launch of the Yaxia Project has nothing to do with China’s “power shortage.”
So, what is the significance of the Yaxia Project’s commencement?
According to Vice Premier of the CCP Zhang Guoqing’s speech during the establishment ceremony of the Yajiang Group on July 19th, the formation of this group was a significant decision made by CCP leader Xi Jinping from a strategic and holistic perspective.
In light of this, Wang Weiluo believes that the Yaxia Project is a political project by Xi Jinping to regain China’s soon-to-be-lost global dominance in hydropower.
As early as the beginning of this year, Wang Weiluo published an article on “Radio France” stating that under CCP rule, the political pursuit of Chinese hydropower projects is to compete for the global number one spot. The final determination of the storage height and power generation capacity of the Three Gorges Dam was aimed at surpassing the then-world number one, the Itaipu hydropower plant located on the border of Brazil and Paraguay.
In simple terms, for years, the Three Gorges project and the Itaipu project have been vying for the title of the world’s number one.
Prior to 2014, the annual electricity generation of the Itaipu project exceeded that of the Three Gorges project, making it the world number one. In 2014, the Three Gorges project generated 98.8 billion kilowatt-hours, surpassing the Itaipu project’s 87.8 billion kilowatt-hours, claiming the world number one spot. But in 2015 and 2016, the Itaipu project’s electricity generation once again exceeded that of the Three Gorges project, reclaiming the top spot. Following adjustments, from 2017 to 2023, the Three Gorges project’s electricity generation again surpassed that of the Itaipu project.
While some in China celebrated the Three Gorges project staying atop the world, the rise of Africa’s Grand Inga Dam project in the Congo River quietly emerged. The Grand Inga hydropower station consists of six dams, with a total installed capacity of 44,000 megawatts and an annual average electricity production of 300 billion kilowatt-hours. This indicates that both the installed capacity and annual electricity generation of the Grand Inga hydropower station far surpass the Three Gorges Project.
According to Wang Weiluo’s article, “Securing China’s two world number one positions in global hydropower projects is the top priority in constructing the Yarlung Tsangpo River downstream hydropower project.”
So, what will the electricity generation capacity of the Yaxia Project ultimately reach? Though there’s no specific official data from the CCP, calculating this is relatively straightforward.
Based on hydrological data from the starting point of the project in Paizhen, with an average annual flow of 601 billion cubic meters, and a drop of approximately 2,350 meters to Motuo County downstream. According to the formula for hydraulic energy calculation, it can be determined that the average power of the hydraulic resources in that location is 35.78 million kilowatts. Of course, this figure is only the theoretical capacity of the hydraulic resources; the actual technical and economic feasible capacity would be lower.
If the 35.78 million kilowatt generators operate continuously throughout the year, 24 hours a day, the maximum annual electricity generation would be 35.78 million kilowatts x 24 x 365 days, approximately 313.4 billion kilowatt-hours. If calculated at three-quarters of the maximum value of the annual electricity generation of the Three Gorges Project, the annual electricity generation of the Yarlung Tsangpo River downstream hydropower project would be 313.4 billion kilowatt-hours x 3/4 = 235.05 billion kilowatt-hours.
This figure significantly deviates from the earlier media-promoted installed capacity of 60,000 to 70,000 megawatts and an electricity generation of 300 billion kilowatt-hours, clearly not able to compete with the Grand Inga hydropower station in Africa.
According to Wang Weiluo’s perspective, the CCP’s political pursuit of the Yaxia Project not only masks its true power capacity but also obscures the potential environmental crisis it might cause.
One of the more pressing issues is whether the 600 billion cubic meters of flow at the mouth of Paizhen River will all be diverted through the tunnel or if a portion will continue flowing through the original U-shaped river channel.
Some media reports indicate that the project will employ green construction methods, preserving 30% of the natural river channel. According to this claim, the maximum annual electricity generation of the Yaxia Project would be about 70% of 235.05 billion kilowatt-hours, approximately 164.5 billion kilowatt-hours, a significantly lower figure compared to that of the Grand Inga hydropower station in Africa.
Moreover, regardless of the water diversion method used, constructing large-scale hydropower facilities in the uniquely picturesque landscape of the Yarlung Tsangpo River region will inevitably cause severe environmental damage.
According to publicly available information from the media, the project site is located in the core area of the “East Structural Belt” in the Qinghai-Tibet Plateau Himalayas, with intense geological structural activity. A tunnel stretching 50 kilometers, which needs to cross 12 active fault zones, with stresses continuously changing, reaching a maximum depth of 1,200 meters, comparable to construction at a depth of 400 floors underground. As excavation depth in the tunnel increases, the severe engineering disasters triggered by deep-seated stress and rock bursts are particularly grave.
In response to this, Wang Weiluo noted that the CCP’s political project did not undergo public scrutiny and discussion. On October 18, 2022, Engineer Fan Xiao published an article titled “The Infeasibility of the Yarlung Tsangpo Gorge Hydropower Development from the Perspective of Geological Risks,” which was quickly suppressed after publication.
For instance, in March 2022, National Committee Member of the Chinese People’s Political Consultative Conference and academician of the Chinese Academy of Sciences Zhao Jindong stated that the mid to downstream area of the Yarlung Tsangpo River, situated in the southeastern part of the Qinghai-Tibet Plateau, features an extremely rare natural landscape that is the core of the East Himalayas global biodiversity hotspot, possessing unique ecological value on a world-class level. Academician Zhao Jindong proposed enhancing biodiversity protection in the Yarlung Tsangpo Gorge area and establishing a national park.
However, the CCP’s actions starkly contrast with the recommendations of experts. According to Wang Weiluo, constructing a hydropower station in the downstream area of the Yarlung Tsangpo River violates a series of Chinese environmental laws, including the “People’s Republic of China Environmental Protection Law,” the “Qinghai-Tibet Plateau Ecological Protection Law,” and the “Nature Reserve Ordinance.” It also contravenes international laws like the “Convention on Biological Diversity” and the “Convention Concerning the Protection of the World Cultural and Natural Heritage.”
With so many issues at hand, will the Yaxia Project end in abandonment?
In response to this question, Wang Weiluo told Epoch Times that whether the Yaxia Project might become an unfinished project depends on how people define an unfinished project. For instance, if a project with an initial budget of a trillion ends up with a total investment of four trillion, is that considered unfinished? If a project aims to generate an average of 300 billion kilowatt-hours of electricity annually and upon completion, the average annual electricity generation doesn’t surpass 250 billion kilowatt-hours, is that considered unfinished? If the answer is affirmative, then it can be said that the Yaxia Project will be left unfinished.
Chinese affairs expert Wang He stated to Epoch Times that many signs indicate Xi Jinping has gradually lost actual control over the highest power within the CCP since April 2024. In this context, if the new authorities intend to distance themselves from the “Xi era,” the Yaxia Project will be cold-shouldered. In other words, whether it will be left unfinished depends on how the new authorities choose to handle this mess.
Furthermore, Wang He believes that the possibility of the collapse of the Chinese regime is continuously rising. If the CCP collapses in the coming years, the newly formed regime will undoubtedly uphold principles that respect professional opinions and prioritize ecological conservation, thus reevaluating and adjusting the planning direction of the Yaxia Project.
Perhaps, at that time, a compromise will be reached that strikes a balance between ecological preservation and hydropower development. However, regardless of the ultimate outcome, Xi Jinping’s political zeal aiming for “world number one,” disregarding reality, will cease to exist.
Lastly, let’s briefly introduce the design concept of the Yaxia Project: from Paizhen Town in Milin City, a 10-meter-diameter, approximately 50-kilometer-long underground water diversion tunnel, can be excavated, referred to as constructing an underground canal. The Yaxia Project primarily harnesses hydropower by leveraging the hydraulic drop, constructing five cascade hydropower stations within the tunnel, each station with a drop of about 400 meters.
Different from traditional dam-type hydropower stations, the Yaxia Project conceals 90% of the structures underground, with each powerhouse embedded within the mountain, forming a contrasting “underground project cluster” compared to the scale of submerging 632 square kilometers of land with the Three Gorges reservoir.
On July 29th, US and Chinese officials concluded two days of negotiations in Stockholm, Sweden. However, no major breakthroughs were announced. Regarding the widely watched question of “whether to extend the truce on tariffs,” both sides agreed to continue discussions.
US Treasury Secretary Mnuchin stated that extending the 90-day truce was indeed an option. However, he emphasized that while the US and China will continue talks, the final decision rests with US President Trump.
Mnuchin expressed that there are still some technical details left to discuss. If an agreement is not reached by August 12th, the tariffs previously paused by the US would be reinstated. In other words, tariffs would be raised again!
In early April of this year, Trump announced that a reciprocal tariff on Chinese goods was at 34%. However, in response to Chinese retaliation a week later, Trump increased the tariff on Chinese goods to 145%.
China’s chief trade negotiation representative, Li Chenggang, stated that the talks were candid and in-depth, with both sides committed to maintaining close communication.
The US emphasized that President Trump’s trade goals are clear: to reduce the US deficit, increase manufacturing, and revitalize the US economy.
Mnuchin mentioned that the US-China trade teams might convene again within the 90-day window. Gril said that the resumption of rare earth exports is the biggest concession Beijing has made so far.
This negotiation marks the third round of talks between the US and China. Apart from tariffs, the two sides discussed other issues like China’s overcapacity, CCP’s purchasing large amounts of sanctioned Iranian oil, and China selling $15 billion worth of “dual-use military and civilian” technology to Russia.
Prior to this, the US and China held two rounds of negotiations in Geneva and London, with a focus on tariff reduction. In these negotiations, China agreed to resume rare earth supply, while the US agreed to restore the supply of items like Nvidia H20 chips.
Source: Epoch Focus Production Team