Dispatch

Where the River Ends

The mighty Yangtze is dwindling -- and a debate has emerged in China over the role of the Three Gorges Dam in exacerbating this summer's devastating drought.

SHANGHAI — In glittering Shanghai, known for its hopping night life and influx of Western luxury stores, a VIP cocktail reception last Thursday night, May 26, marked the opening of a new H&M clothing store on upscale Nanjing Road. As a parade of BMWs, Audis, and Mercedes pulled up to valet parking alongside a red carpet unfurled on the sidewalk, an observer might never have suspected that the local government here in China's richest and most urbane city has been struggling with two very basic problems: keeping the water running and the power on.

Both problems stem from a drought that has been plaguing central China since January and the related shriveling of the Yangtze River. The Yangtze -- Asia's longest river -- tumbles down from the Tibetan plateau, traversing nearly 4,000 miles across the length of China, before emptying into the East China Sea near Shanghai. The water of its final tributary, the Huangpu, winds along the famed Bund area and sparkles at night under the glow of illuminated skyscrapers and the Oriental Pearl Tower. For centuries a source of inspiration for poets -- and frustration for emperors trying to manage its turbulent flooding -- the Yangtze remains in many ways essential to the modern Chinese economy.

Today, it carries 80 percent of China's river freight -- a steady procession of barges laden with coal, construction materials, and container traffic, floating from the megacity of Chongqing to the port of Shanghai, now the world's busiest. The Yangtze and its tributaries are now the site of thousands of small and large dams, including the $45 billion Three Gorges Dam, the world's largest hydropower station. It also supplies water for drinking, farming, and industrial activity to 400 million people in the Yangtze delta, where 40 percent of China's economic activity is located.

The mighty Yangtze's water level has been dropping for years as new towns crop up along its banks and older settlements, such as Chongqing, grow into vast megacities, with factories and farmers siphoning off their take, often in unregulated serve-themselves fashion. Meanwhile, the phalanx of dams has changed the river's hydrology, and Chinese and U.S. scientists project that glacial melt in Tibet, where the river begins, points to a diminished future. But most troubling, whether related to climate change or not, is that this year's rainfall in the provinces that water the upper Yangtze has been a trickle -- as much as 40 percent below the annual average for January to April. China is facing its worst drought in half a century.

The Yangtze, and all who depend on it, are suffering. In May, freight shipping was halted for a 140-mile stretch near the central city of Wuhan due to low water levels. In the parched central provinces of Hubei and Hunan, farmers have been struggling to keep vegetables alive, delaying planting the summer rice crop and losing livestock. The farmers' woes aren't theirs alone. The People's Daily reported on May 28 that in just one week the price of some key vegetables jumped more than 10 percent at a time when the central government is desperately trying to control inflation.

Meanwhile, rolling blackouts have hit central and southern China as many of the dams on the river are operating below capacity. That includes the Three Gorges Dam, whose operator reports that water levels behind the dam are 40 percent lower than usual. Shanghai, which receives a portion of its electricity from Three Gorges, is one of many cities feeling the crunch. (Barge traffic carrying coal down the river has also been strained by the low water levels.) Last week, Shanghai's largest utility company announced that factories and retail stores could soon face outages.

Shanghai's well-heeled elite are often blissfully isolated from the development woes facing China's poorer hinterlands, but the drought has revealed their common vulnerability. In addition to its power, Shanghai's water supply is at risk. The city's municipal water is drawn from two reservoirs that tap the mouth of the Yangtze. With less water flowing downstream into the river's mouth, salt-laden seawater has begun to push upstream. On May 25, the Shanghai Water Authority disclosed possible contamination of the city's freshwater supply by unusual "salt tides."

The plight of the Yangtze is becoming impossible to ignore. Newspapers across the country have lately been plastered with photos of mournful farmers standing in parched fields and river barges marooned in low water. Inevitably, with so many lives affected -- from Hubei peasants to Shanghai glitterati -- people have begun to ask: Who's to blame? Who killed the Yangtze?

One common, if incomplete, answer is the Three Gorges Dam.

China's state-run newspaper Global Times reports that it has tallied 100,000 messages on the microblogging site Weibo -- China's homegrown equivalent of Twitter -- venting about whether Three Gorges caused or exacerbated this summer's dire water shortages. Accusations have ranged from the reasonable to the inflammatory, such as alleging a deliberate plot by dam-builders to shortchange downstream residents. In response, the reliably patriotic paper has published a defense, of sorts, saying that such an ambitious undertaking necessarily involved risks: "Droughts in China's Yangtze River have sparked a new wave of criticism over The Three Gorges Dam.… As the biggest hydropower project ever in history, both the dam's pros and cons could hardly [be predicted]. It was built at a special juncture of transition from the planned economy to market economy."

The Three Gorges Dam, first proposed by Sun Yat-sen and later championed by Mao Zedong and Deng Xiaoping, has long been a source of controversy. But until recently, it was risky to voice criticism. A dogged anti-dam activist, Dai Qing, was arrested in 1989 and spent a year in maximum-security prison for publishing a book-length exposé on problems the proposed dam would cause. (Many of the book's predicted woes have since come true, including frequent landslides and geologic instability in the region. Indeed, Columbia University scientists have connected the devastating 2008 earthquake in Sichuan province with increased seismic pressure partly attributable to the Three Gorges reservoir.) Ground was broken on the dam in 1992, forcibly relocating 1.4 million people living upstream. It was completed in 2008.

In today's slightly more open media climate, faulting the Three Gorges Dam is increasingly common among Chinese bloggers, reporters, activists, and even some officials -- those who don't have to take direct responsibility for green-lighting it, anyway. "The primary cause of this drought is a lack of rainfall. But we can also be certain that the Three Gorges Dam has had a negative impact on the water supply downstream," prominent Beijing-based environmentalist Ma Jun told the Guardian's Jonathan Watts. In a similar vein, Wen Bo, a Beijing-based fellow with Pacific Environment, told me: "Three Gorges Dam is part of the problem" for shrinking the Yangtze and destroying the resiliency of the delta's ecosystem.

Shockingly, Beijing agreed. In May, China's State Council released a statement, approved by Premier Wen Jiabao, acknowledging severe problems caused by the dam. Not quite a mea culpa, it read: "At the same time that the Three Gorges project provides huge comprehensive benefits, urgent problems must be resolved regarding the smooth relocation of residents, ecological protection and geological disaster prevention."

Of course, blaming the Three Gorges Dam doesn't alone revive the Yangtze. Nor will fancy technical tricks, like recent efforts at cloud seeding to bring water to a parched land -- there's little moisture to be wrung from the region's dry summer sky. What's needed is a long-term vision for river restoration. Indeed, a discussion is bubbling up among municipal officials and NGOs about the need to create a new environmental planning body to coordinate watershed planning among the provinces and major cities along the Yangtze. Meanwhile, better regulation of industry and agriculture now siphoning off water upstream would give teeth to current water-conservation regulations.

Going forward, the looming question is whether the current drought will prompt the central government to reconsider its future plans for the river -- such as building 100 new large dams on the upper Yangtze in a bid to boost China's hydropower output 50 percent by 2015. Or constructing the final legs of the controversial South-North Water Transfer Project, by which massive quantities of water would be channeled from the southern Yangtze to the northern Yellow River. (The Yellow River is even more polluted and diminished than the Yangtze.) Dai Qing, among others, has warned of the water-transfer project's pitfalls for years.

At some point, the Yangtze, like poet Shel Silverstein's metaphorical "Giving Tree," will have nothing left to give. There are only so many uses to which its water can be apportioned and diverted -- there is little left to take. Or, as environmentalist Ma Jun puts it, "The water in the Yangtze is not unlimited. We cannot bet everything on this river."

STR/AFP/Getty Images

Dispatch

Swimming Upstream

Meet Christine Lagarde, Europe's consensus choice to replace Dominique Strauss-Kahn as chief of the IMF.

PARIS, France — French government ministers can come across as remarkably close to some of their stereotypes. Some are haughty and pander to their bosses -- the prime minister and president -- like royal courtesans. Many talk eloquently but with little substance, as though speaking well is more important than saying something meaningful. And a few act as though they believe that, as a result of their positions, they are virtually untouchable.

Then there is Christine Lagarde, universally seen as the front-runner -- and Europe's strongest bet -- to become the next managing director of the International Monetary Fund (IMF). As France's finance minister since 2007, she was the first woman to ever oversee a G-8 economy, and yet she comes across in one-on-one encounters as down to earth, warm, engaging, and a bit quirky. (In a film, Annette Bening would play her perfectly.) Surely, few other government ministers are vegetarians, have ever competed in synchronized swimming from early adolescence, or had a mother who moonlighted as a rally car driver.

Those who interact with Lagarde often sense that her professionalism was shaped as much by the United States as by France. While she grew up in de Gaulle's France, she spent a year at Holton-Arms, a girls' school in Bethesda, Maryland, and she did a stint as an intern in Washington for William Cohen, a Republican congressman. Like many others, she failed to gain admission to France's prestigious École Nationale d'Administration, an elite finishing school for much of the political class, instead choosing to study law and garnering an offer from the Chicago office of the prominent international law firm Baker & McKenzie.

These days, she makes a special effort to avoid jargon, lingo, and wonkiness, and she speaks nearly flawless English, which is extremely rare for top French government officials of her generation. How well? She not only tangled with Jon Stewart on the Daily Show a couple of years back, but also managed to convey some meaningful points about international economics. More recently, on May 25, she even launched a Twitter account to support her IMF candidacy.

The combination of her quirky upbringing with a single mother, after the death of her father during adolescence, and the decisions she made to repeatedly return to the United States has led to her comfort with being something of an outsider in the workplace. In Chicago, Lagarde was a rare female attorney in a male-dominated law firm -- and she rose to the top, eventually becoming its first-ever chairwoman. She so fully inculcated in herself the pragmatic American professional culture that she proved to be an oddity amid her highly formatted French colleagues when she returned to Paris full time after she was recruited into government in 2005 by Prime Minister Dominique de Villepin. Still, she rose from deputy minister of foreign trade under then-President Jacques Chirac to become agriculture minister two years later, before the incoming President Nicolas Sarkozy, impressed with her can-do spirit, tasked her with running the economy.

The competence and pragmatism that Lagarde has shown in her current position help to explain why she has won the strong personal endorsement of U.S. Secretary of State Hillary Clinton. "I actually know her. I admire her.... I am a strong supporter of qualified women, of which she is certainly one, being given the opportunities to lead international organizations," Clinton said on May 26. (The United States will not officially highlight its preferred candidate until after June 10, once all the candidates have been official declared.)

Clinton is hardly Lagarde's only fan. She had a constructive working relationship with Dominique Strauss-Kahn, the French former head of the IMF whose resignation over shocking sex crimes charges in New York has led to her candidacy; and her counterparts in Europe see her as an able and stabilizing interlocutor for a French president whom some see as erratic. Sarkozy expressed his confidence at last week's G-8 summit in Deauville, France, noting that though it is not up to a handful of the world's wealthiest countries to chose Strauss-Kahn's successor, the issue came up in bilateral discussions and "everyone" thinks that Lagarde "would make a very good managing director."

The idea that Sarkozy might replace a former political rival, Strauss-Kahn, with one of his closest ministers and simultaneously keep a French person at the helm of the IMF should bring him special satisfaction. The question is whether the unpopular president can afford to let her go.

When Lagarde first took over the country's finances, she appeared to be a strikingly free market choice for France -- at least until the global economic crisis hit in 2008. An economic model that she lamented for being too rigid proved to be fairly recession-resistant as the crisis cascaded across Western Europe. (To her credit, she readily recognized the need to adapt to circumstances, tolerating a sudden spike in government spending to fund much-needed economic stimulus.) While unemployment in the United States nearly doubled and el paro tripled in neighboring Spain, France's chomage rose only by about 20 percent. France's debt ballooned, as in nearly all Old World economies, but its real estate market didn't collapse and there was no broad wave of foreclosures. And significantly, France's public deficit, which jumped from 3.3 percent in 2008 to 7.5 percent in 2009, is now expected to be around 5.6 percent this year (thanks to increasing fiscal discipline), with a return to pre-crisis levels by 2013 or so. Despite the many challenges of recent years, Lagarde has remained atop France's Finance Ministry since 2007, bringing remarkable stability to a position that has long seemed like an ejection seat. Hers is the longest stint at the helm since 1974, and it amounts to an eternity in a position held by seven different ministers in the seven years prior to her arrival.

Internationally, Lagarde has promoted efforts to develop a renewed international regulatory framework aimed at preventing a return to the speculative excesses that propelled the crisis, and she has promoted a combination of greater fiscal restraint for Europe's most debt-laden countries while also pushing to secure resources to keep them afloat and bolster faith in the euro. Her activeness and pragmatism in navigating through economic crises helped to earn her the Financial Times distinction as "European Finance Minister of the Year" in 2009, while Time, the Wall Street Journal, and Forbes have ranked her among the most powerful women on Earth in recent years.

But one internal obstacle could act as a deal breaker for Lagarde's aspirations to take over at the IMF. A judge is slated to declare on June 10 -- the same day candidates are finalized -- whether French justice will pursue a case against Lagarde for overstepping her authority. The issue in question involves her decision to settle out of court with a prominent French businessman, Bernard Tapie, much of whose wealth was confiscated in the 1990s in relation to a corruption affair that sent him to prison for a brief stint. A judge later voided the confiscation, but its subsequent valuation remained a source of debate.

Ignoring the recommendation of some in her ministry, Lagarde decided in 2007 to settle the case by ordering the return of Tapie's money, plus extensive interest, from state coffers, as well as a settlement believed to be worth approximately 210 million euros, including 45 million euros in damages. A flamboyant former minister in a Socialist government, the Trump-esque Tapie is the sort of financier whom few French people have much sympathy for, especially these days. The fact that he supported the conservative Sarkozy in the 2007 presidential race has also raised suspicions in France. Lagarde argues that her decision to end the Tapie saga is now being used by Socialists simply to undermine the government, rather than because she did anything wrong. She also almost certainly resolved the Tapie case at Sarkozy's behest. Still, if the judge decides to take the investigation forward, it could make it difficult for the IMF, under the current circumstances, to choose someone who is under a legal cloud at home.

If Lagarde is ultimately selected, she may prove to be as much of a fish out of water in Washington as she has been throughout her career -- and the lifelong swimmer just might continue to advance upstream.

BERTRAND LANGLOIS/AFP/Getty Images