Rethinking Investments in Natural Resources: China’s Emerging Role in the Mekong Region

China is rapidly increasing its foreign direct investment (FDI) in the Mekong region to secure natural resources for its industrial growth. Driven by the 'Going Out' strategy, Chinese state-owned enterprises are filling an investment vacuum left by International Financial Institutions in hydropower, mining, and agribusiness. While this provides capital and infrastructure, it poses environmental and social risks due to a lack of compliance with international sustainability standards and poor local regulatory enforcement in Cambodia, Laos, and Vietnam.

• China's 'Going Out' (or 'Going Global') Strategy, initiated since 2004, aims to meet rising natural resource demands by subsidising overseas acquisitions and diversifying energy supply bases to maintain national energy security.
• Chinese investment banks and companies have filled an investment gap in the Mekong region as International Financial Institutions (IFIs) like the World Bank and ADB withdrew from environmentally and socially controversial mega-projects due to onerous compliance standards.
• Trade between China and the three lower Mekong countries is heavily skewed, with over 90 percent of exports from Cambodia, Laos, and Vietnam to China consisting of raw materials and agricultural goods, while China exports manufactured goods and technology.
• Chinese state-owned enterprises are actively driving extraction in the region: Sinohydro Corporation is developing hydropower in Laos and Cambodia, while CNMIC and Chalco are investing in bauxite mining in Laos and Vietnam.
• Informal and illegal trade in commodities is widespread across the borders of the three Mekong countries, involving resources such as coal, rubber, timber, sugar, and minerals destined for Chinese markets.
• China's investment approach often lacks benchmarks for human rights and environmental protection, relying instead on 'soft power' and relationships, which creates risks for riverine ecosystems and local communities.

APA

International Institute for Sustainable Development (2008). Rethinking Investments in Natural Resources: China’s Emerging Role in the Mekong Region. https://www.iisd.org/system/files/publications/trade_chinapolicybrief.pdf

Chicago

International Institute for Sustainable Development. Rethinking Investments in Natural Resources: China’s Emerging Role in the Mekong Region. 2008. https://www.iisd.org/system/files/publications/trade_chinapolicybrief.pdf.

Wikipedia

{{cite report |author=International Institute for Sustainable Development |title=Rethinking Investments in Natural Resources: China’s Emerging Role in the Mekong Region |date=2008 |url=https://www.iisd.org/system/files/publications/trade_chinapolicybrief.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{internationalinstituteforsustainabledevelopment2008rethinking, author = {{International Institute for Sustainable Development}}, title = {{Rethinking Investments in Natural Resources: China’s Emerging Role in the Mekong Region}}, institution = {International Institute for Sustainable Development}, year = {2008}, url = {https://www.iisd.org/system/files/publications/trade_chinapolicybrief.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }