China launches massive hydropower project to power coastal cities and cement regional integration

Chinese Premier Li Qiang attends the groundbreaking ceremony for the world’s largest hydroelectric project, in Nyingchi, Tibet Autonomous Region

China has officially broken ground on what is set to become the world’s largest hydroelectric power project, located in the Tibet Autonomous Region. The multibillion-yuan initiative – costing an estimated 1.2 trillion yuan ($167 billion) – is designed to generate electricity for China’s coastal economic hubs while strengthening Beijing’s grip on the remote and politically sensitive region.

According to Chinese state media, the project will consist of five massive hydroelectric dams built along the Yarlung Tsangpo River, which originates in the Tibetan Plateau and flows through India and Bangladesh before reaching the Bay of Bengal. Once completed, the combined power generation capacity of the dams is expected to triple that of China’s current largest facility – the Three Gorges Dam in Hubei province – providing electricity for up to 300 million people annually.

The ceremonial launch took place on July 19, with Premier Li Qiang in attendance – a signal of the project’s strategic significance. The newly established state-owned China Yajiang Group will oversee construction and operations.

Chinese analysts expect the project to boost demand for steel, cement and high-capacity energy infrastructure, potentially injecting long-term momentum into the domestic economy as construction stretches into the 2030s.

Xinhua News Agency reports that electricity from the dams will be transmitted to major coastal regions – including Shanghai and Guangdong – aiding China’s broader efforts to reduce its reliance on coal. In 2024, fossil fuels still accounted for over 60% of China’s electricity mix.

The Tibetan hydropower initiative is therefore seen as central to President Xi Jinping’s carbon reduction commitments – peaking emissions by 2030 and reaching carbon neutrality before 2060.

As noted by Nikkei News, this ambitious water project could also have geopolitical ramifications. Experts warn that damming the Yarlung Tsangpo – known as the Brahmaputra downstream – may heighten tensions with India and Bangladesh, who rely on the river’s flow for agriculture and water security.

Nevertheless, Beijing appears intent on pushing forward. During a 2021 visit to Tibet, Xi Jinping personally emphasized the importance of the river’s strategic development.

The presence of Li Qiang at the groundbreaking aligns the Tibet dam megaproject with two earlier state-driven hydraulic endeavors: the Three Gorges Dam (launched in 1994) and the South–to–North Water Diversion Project (begun in 2002) – marking this as China’s third major water-related national infrastructure campaign.

Economically, the project serves dual purposes. It contributes to China’s energy transition while also embedding Tibet more tightly into the national economy.

Currently, Beijing funds around two-thirds of the Tibetan Autonomous Region’s general budget. By exporting electricity to wealthier provinces, Tibet is expected to generate its own revenue stream. Additionally, a rail line under construction between Lhasa and Chengdu is anticipated to increase tourism and commerce in the region.

Coinciding with the 25th anniversary of the China Western Development strategy – which aims to close the wealth gap between coastal and inland regions – the hydropower project also serves a political function.

Analysts cited by Nikkei News suggest that deepening economic integration is part of Beijing’s broader strategy to reinforce political stability and control in Tibet.