China is reviving infrastructure projects by building a massive dam in Tibet to boost economic growth. Part of a 170 B USD stimulus, the dam could add 0.1% to China’s GDP in its first year. While it supports clean energy, the project raises environmental concerns and geopolitical tensions.
China is reviving an old strategy by launching the construction of a massive hydropower dam in Tibet, aiming to stimulate its slowing economy through large-scale infrastructure. The project is part of a 170 B USD stimulus plan and is expected to boost GDP growth by driving demand for steel, cement, and heavy industry.
Markets reacted positively to the announcement. Iron ore prices surged to a four-month high, as investors saw this as a sign of a broader wave of state-driven investments. Analysts estimate the dam alone could add 0.1% to China’s GDP in its first year of construction.
Despite its green energy promise, the project faces serious challenges: massive carbon emissions during construction, environmental risks, India’s concerns over water flow, and regional drought vulnerability. Still, Beijing appears willing to absorb the risks to reignite national growth.