Vietnam’s response to controversial Mekong projects in China, Laos, and Cambodia
Vietnam is anxious about the geostrategic implications of upstream Mekong projects in China, Laos, and Cambodia. It faces the dilemma of protecting its vital interests in the Mekong while maintaining stable and cooperative relations with its three neighbours.
INTRODUCTION
Maintaining good relations with China, Laos, and Cambodia is Vietnam’s top foreign policy priority. As land-based neighbours with deep historical and political bonds, these countries play a crucial role in Vietnam’s territorial integrity, economic prosperity, and regime security. Vietnam is also connected to these countries through the Mekong River, a lifeline for millions living in six riparian states (China, Myanmar, Thailand, Laos, Cambodia, and Vietnam). Former Vietnamese Prime Minister Nguyen Xuan Phuc once described the Mekong River as a “shared space of co-existence”, reflecting Vietnam’s desire for cooperative transboundary water management. However, in reality, the river has increasingly become a space of conflicting interests and competition.
As the furthest downstream country, Vietnam is anxious about its three neighbours’ Mekong projects, namely upstream hydropower dams and the recent Funan Techo Canal. These projects, combined with climate change, pose severe risks to Vietnam’s food security, socioeconomic stability, and environmental sustainability. Ultimately, they present a dilemma: how can Vietnam protect its vital interests in the Mekong while maintaining stable relations with its neighbours? This Perspective examines Vietnam’s diplomatic approach to this dilemma and offers recommendations on how Vietnam can better address the upstream exploitation of the Mekong River without jeopardising amicable neighbourly ties.
ANXIETY OVER UPSTREAM EXPLOITATION
Disruptive Mekong Projects in China, Laos and Cambodia
China, the most upstream country, has the largest installed hydropower capacity in the Mekong basin, operating 12 mainstream and 95 tributary dams. Its dam development has been largely unilateral, undertaken without consultation with the Lower Mekong countries. China’s hydropower expansion has also accelerated downstream dam construction in three key ways. First, its dam cascade has altered the Mekong’s natural flow by releasing more water during the dry season and holding back water during the wet season, effectively providing more consistent water availability. This has made downstream run-of-river dams more economically viable by allowing for reliable year-round power generation. Second, China’s successful hydropower projects have provided a model for downstream countries, particularly Laos, to justify their own dam construction as a means of rapid economic growth. Third, Chinese state-owned power corporations have become major investors in downstream Mekong dam projects, particularly in Laos and Cambodia.
Against this backdrop, Laos has emerged as the most ambitious hydropower developer in the Lower Mekong Basin. The country is driven by demands for hydropower across Southeast Asia, including in Vietnam. It currently operates 77 hydropower dams, including two mainstream Mekong projects. There are plans for 61 more, seven of which will be on the Mekong mainstream. Cambodia’s dam development has been more modest. The country has four operational large dams, the most prominent being the Lower Sesan 2 on a major Mekong tributary. In 2020, Cambodia implemented a ten-year moratorium on mainstream Mekong dams, halting two potentially disruptive projects.
A major point of contention between Vietnam and Cambodia, however, is the China-backed Funan Techo Canal—a 180-kilometre waterway connecting the Mekong River near Phnom Penh to the Gulf of Thailand. As part of China’s Belt and Road Initiative (BRI), the canal is being built through a Public-Private Partnership involving the state-owned China Bridge and Road Corporation and two local port operators. This project aims to boost Cambodia’s transportation and economic development while reducing the country’s reliance on Vietnamese ports for exports.
Environmental Concerns
Vietnam’s Mekong Delta plays a vital role in the country’s food security and economic growth. Home to 18 million people, the delta contributes one-third of Vietnam’s GDP, producing half of its rice and much of its aquaculture and fruit crops. However, upstream development projects are putting immense pressure on this fertile region.
China’s cascade of 12 mainstream dams, along with dams in Laos and Cambodia, has significantly reduced water flow and sediment reaching the Mekong Delta. Two of China’s mainstream dams—Xiaowan and Nuozhadu—are among the world’s largest, with the capacity to store approximately 50 per cent of the usable water in the entire Mekong Basin. China’s mainstream dams have already trapped an estimated 30 per cent of sediment flowing to the Mekong Delta, while additional mainstream dams in Laos and Cambodia are expected to block another 5 per cent. If all planned mainstream and tributary hydropower projects on the Mekong River are completed, sediment reaching the delta will decrease by 97 per cent compared to natural conditions. Such sediment loss diminishes soil fertility for agriculture, accelerates riverbank and coastal erosion, and prevents the delta from naturally replenishing itself to counteract sea-level rise. Fisheries are also at risk, with Vietnam projected to lose 30 per cent of its fish catch by 2040 due to dam constructions.
Moreover, while providing some benefits, the altered hydrology caused by upstream dams, particularly China’s, has been linked with extreme weather conditions downstream. China’s dam management has been blamed for both floods and droughts in Thailand, Laos, Cambodia, and Vietnam. Combined with sediment loss, the altered flow patterns intensify downstream saltwater intrusion, threatening crops and freshwater supplies in the Mekong Delta.
Regarding the Funan Techo Canal, Vietnamese experts fear that it could divert a significant portion of the Mekong’s flow away from the Mekong Delta, particularly during the dry season. Some experts predict it could reduce water flow to the delta by 50-70 per cent, while others project a more modest reduction of 5-13 per cent. The lack of transparency from Cambodia regarding the canal’s design, operation, and water usage has made it challenging to fully assess the severity of the expected impacts. But it is clear that if unmitigated, the canal could exacerbate existing problems of water scarcity, sediment deprivation, and saltwater intrusion in the Mekong Delta.
Geostrategic Concerns
China’s dam-building spree showcases its growing influence in the Mekong region, which has intensified geopolitical competition with the United States. In 2016, China established the Lancang-Mekong Cooperation (LMC) as a platform to engage in water diplomacy with the Lower Mekong countries and counter-balance the Mekong-U.S. Partnership (previously known as the Lower Mekong Initiative). While this institutional competition has brought resources and technical assistance to the Lower Mekong countries, it has increasingly drawn them into broader U.S.-China strategic rivalry and raised the risk of overdependence on external powers.
Although China promotes its dams as beneficial for flood control and drought relief, critics underscore that they provide Beijing with undue leverage over downstream countries. While the extent to which China could use water as a coercive tool remains debatable, Vietnam has reasons for concern.
Although China promotes its dams as beneficial for flood control and drought relief, critics underscore that they provide Beijing with undue leverage over downstream countries. While the extent to which China could use water as a coercive tool remains debatable, Vietnam has reasons for concern. During a severe drought in 2016 that threatened the Mekong Delta, Hanoi had to request that Beijing release additional water from its dams to alleviate the crisis. While this episode can be seen as a benign act of water diplomacy, it also highlights the asymmetry that Vietnamese officials fear: China could potentially weaponise its control over the river, either withholding water in droughts or releasing excess water during floods, to gain geopolitical concession from Vietnam.
China-funded projects in Laos and Cambodia add another layer of strategic complexity. Through the financing and construction of dams in Laos and Cambodia, China consolidates its economic foothold in the Mekong region while enhancing its control of the river flow, which could be used against Vietnam. Vietnam’s geostrategic concerns surrounding the China-funded Funan Techno Canal should be seen in this context. By reducing Cambodia’s reliance on Vietnamese ports, the project further weakens Hanoi’s traditional influence in the country, which has already been challenged by China’s substantial infrastructure investment through the BRI. Additionally, there are fears that the canal could enhance China’s military presence along Vietnam’s western border, adding to existing anxieties about Beijing’s strategic encirclement.
VIETNAM’S DIPLOMATIC APPROACH
Approach towards China
Vietnam has long pursued a dual approach of “cooperation and struggle” in its relationship with China, and Mekong issues are no exception. On the one hand, Vietnam engages in water diplomacy with China primarily through the LMC. It actively participates in LMC meetings, consistently advocating for prioritising water management, increasing transparency in hydrological data sharing, and promoting sustainable water resource management principles. On the other hand, Vietnam frequently raises concerns over China’s upstream dam construction and operations, albeit in a subtle manner. Vietnam supports Mekong minilateral groupings led by major powers such as the U.S., Australia, Japan, and South Korea. These partnerships not only enable Vietnam to attract resources to address Mekong-related challenges but also serve as a counterweight to China’s influence through its dam development and the LMC. Moreover, they have enabled Vietnam to internationalise Mekong issues, garnering broader support for its call for greater transparency in data sharing and comprehensive environmental impact assessments for upstream dam projects.
Approach towards Laos and Cambodia
Vietnam has relied on bilateral channels and the MRC to address its concerns and mitigate the impacts of Laos’ and Cambodia’s Mekong projects. After Laos launched the MRC’s consultation process for the Xayaburi Dam—its first Mekong mainstream dam—in 2010, Vietnam called for a 10-year moratorium, arguing that environmental assessments were inadequate. In 2011, Vietnam submitted a report to the MRC highlighting the dam’s risks to the Mekong Delta, urging Laos to avoid pursuing prosperity at the expense of downstream nations. However, despite objections from both Vietnam and Cambodia, Laos proceeded with construction in 2012. Subsequently, Vietnam continued to voice its opposition, even calling for a suspension of construction during the 2013 MRC Council meeting, but to no avail.
This experience prompted Vietnam’s more restrained approach to Laos’ subsequent mainstream dams. In 2015, in response to Laos’ second mainstream dam, Don Sahong, Vietnam requested a 5–10-year delay for further studies but clarified that it was not attempting to block Laos’ hydropower development—only ensuring proper environmental assessments. Over time, Vietnam shifted from advocating for construction suspensions to focusing solely on mitigation. This shift was evident during the 2017 consultation process for Laos’ third mainstream dam, Pak Beng. While Vietnamese scientists called for construction to be halted, the Vietnamese government did not. At a conference hosted in Vietnam on the Pak Beng Dam, then-Minister of Natural Resources and Environment Tran Hong Ha acknowledged that stopping Laos from building the dam was “nearly impossible” given Laos’ dependence on hydropower as a key natural resource. Instead, Vietnam’s diplomatic efforts concentrated on strengthening the MRC’s consultation process with regard to the dam, which led to the first Joint Statement by all four MRC members that urged Laos to conduct comprehensive impact assessments, implement mitigation measures, and share updated data in a timely manner.
Vietnam has taken a similar mitigation-focused approach towards Cambodia’s Funan Techo Canal project. Rather than demanding a halt to construction, Vietnam raised concerns through bilateral exchanges and consultations within the MRC. It urged the MRC Secretariat to conduct impact assessments, propose mitigation strategies, and establish monitoring mechanisms. When construction began in August 2024, Vietnam maintained a measured response, stating its respect for Cambodia’s decision while stressing the need for collaboration on research and impact assessments.
Vietnam has also promoted broader norms and rules for Mekong water resource management. Through the MRC, it has consistently called for the “fair, appropriate, and sustainable use of Mekong water resources” and supported the effective implementation of the 1995 Mekong Agreement. During its 2020 ASEAN chairmanship, Vietnam worked alongside Thailand to elevate Mekong issues within the regional bloc by integrating sub-regional goals into ASEAN policy documents and meetings.
Strategically, Vietnam made substantial efforts to preserve its traditional sphere of influence through the now-defunct CLV-DTA (Cambodia-Laos-Vietnam Development Triangle Area). The framework provided a dialogue platform that excludes China, allowing Vietnam to maintain its role as the “big brother” among the three countries. However, Cambodia withdrew from CLV-DTA in September 2024, signalling the country’s broader strategic realignment away from Vietnam and toward China, despite official claims about domestic political concerns.
Structural Constraints behind Vietnam’s Approach
Vietnam’s approach has failed to curb upstream exploitation, highlighting both the weaknesses of Mekong River governance and its own limited leverage over neighbouring countries.
Through the LMC, China has shared some hydrological data and provided substantial funding for socioeconomic and infrastructure development. However, the LMC has faced criticism for prioritising China’s regional influence over environmental safeguards and transparency. Its emphasis on economic development and infrastructure often overshadows concerns about sustainable water management. China has continued to present downstream countries with a series of fait accompli, as seen in the unnotified operation commencement of its 12th mainstream dam in 2024.
Minilateral initiatives led by China’s major power rivals—the U.S., Australia, Japan, and South Korea—have played an important counterbalancing role in the Mekong region’s development landscape. These frameworks provide alternative models of cooperation that emphasise transparency, sustainability, and rule-based water resource management, encouraging China to engage more collaboratively with Lower Mekong countries. However, the effectiveness of Mekong initiatives from the U.S. and its allies has been constrained by fragmented approaches and limited financial commitments compared to China’s more centralised and well-funded LMC.
Meanwhile, the MRC suffers from structural weaknesses, including its lack of a legally binding authority and vague provisions in the 1995 Mekong Agreement that allow member states to bypass stricter oversight, as seen with the Funan Techo Canal. MRC’s reliance on consensus-based decision-making and voluntary compliance further limits its ability to prevent or resolve disputes. These challenges are exacerbated by ASEAN’s principle of non-interference, which limits the ability of member states to intervene in problematic projects once they begin construction. Moreover, Vietnam’s efforts to elevate the Mekong as an ASEAN issue in 2020 gained little traction, as subsequent ASEAN chairs have largely sidestepped the issue amid reluctance from maritime member states due to fear of antagonising China.
Vietnam’s limited leverage over its neighbours on Mekong projects stems from three factors. First, riparian countries have the sovereign right to develop projects on their respective sections of the river. Combined with weak governance mechanisms, this geographical reality leaves the Mekong Delta vulnerable to upstream decisions and goodwill. Second, Vietnam’s influence is undermined by its own controversial actions. It operates 81 tributary dams that have negatively impacted downstream Cambodian communities. Moreover, Vietnam continues to invest in and import hydropower from Laos, further contributing to the challenges facing the Mekong Delta. Finally, Vietnam has to balance its water security with broader strategic considerations. Confronting China over water issues could strain bilateral relations and economic ties that are crucial to the country’s stability and growth. Instead, Vietnam adopts a hedging strategy—seeking cooperation where possible, while mitigating potential risks. Meanwhile, strongly opposing Laos and Cambodia for problematic Mekong projects risks pushing them further into China’s orbit.
RECOMMENDATIONS
Vietnam’s measured response to controversial Mekong projects by China, Laos, and Cambodia has helped maintain stable neighbourly relations. However, as upstream exploitation intensifies, the survival of the Mekong Delta—and with it, Vietnam’s food security, socioeconomic stability, and environmental sustainability—is increasingly at risk. This calls for Vietnam to adopt a more proactive strategy.
First, as a regional leader in renewable energy, Vietnam should assist Laos and Cambodia in transitioning to solar and wind power. Fully harnessing the non-hydro renewable potential of the two countries would reduce Southeast Asia’s need to rely on Mekong dams for energy security, thereby protecting the river from further hydropower exploitation.
Second, Vietnam should prioritise strengthening river governance within ASEAN and the MRC. A key issue with the MRC’s 1995 Mekong Agreement is the lack of clear definitions for critical terms, such as the distinction between “tributary” and “mainstream” projects. This ambiguity allowed Cambodia to classify the Funan Techo Canal as a tributary project, bypassing rigorous consultation requirements. Vietnam should advocate for clearer technical criteria to prevent future loopholes being exploited.
As a regional leader in renewable energy, Vietnam should assist Laos and Cambodia in transitioning to solar and wind power. Fully harnessing the non-hydro renewable potential of the two countries would reduce Southeast Asia’s need to rely on Mekong dams for energy security…
Drawing from the experiences of other transnational river organisations, such as the International Commission for the Protection of the Rhine and the International Commission for the Protection of the Danube River, Vietnam should push for the establishment of binding arbitration mechanisms and independent monitoring systems for transboundary water projects. One approach might involve advocating for a technical expert panel within the MRC. This panel would include representatives from all member states, and independent scientific experts, with the authority to issue binding decisions on project classifications, environmental impact assessments, and dispute resolution.
Vietnam should also continue to elevate Mekong issues as a priority within ASEAN. With mainland ASEAN states, Vietnam should further promote the narrative of “shared space of coexistence”, highlighting that all riparian states share a strategic interest in protecting the river’s well-being. Vietnam can engage maritime ASEAN states by highlighting the strategic and economic importance of the Mekong basin to the wider region. Stronger institutional cooperation among Southeast Asian countries—particularly among Lower Mekong countries—not only enhances transnational water governance but also strengthens Vietnam’s ability to garner regional backing and negotiate more effectively with China on dam operations and data sharing.
Finally, Vietnam must lead by example by improving transparency and implementing best practices in managing its own Mekong tributary dams. Conducting joint environmental impact assessments, addressing the concerns of downstream communities in Cambodia, and ensuring its projects align with regional sustainability goals will reinforce Vietnam’s credibility as a responsible actor in Mekong governance.
By Phan Xuan Dung – ISEAS – Yusof Ishak Institute / Fulcrum.sg – May 22, 2025