"The experience with the Three Gorges has shown they're likely to run into all kinds of opposition and difficulties if they want to get overseas finance," says Fred Hu, director of Asian economic research at Goldman Sachs Asia in Hong Kong.
One US company, Dallas-based Panda Energy International Inc, says it's already had a hard time working in China. In 1995, Panda began building a coal-fired generating plant near Beijing.
Panda's president Todd Carter says the Chinese government agreed to buy electricity for 0.70 yuan (US$0.08) a kilowatt hour. By 1999, China was in an economic slump and cut the rate in half, Carter says. Panda also faced a tough competitive situation because government-subsidized plants were selling cheaper electricity.
Panda sold its plant in September, and Carter is reluctant to return. "The playing field was not level, and the commitments were not honored," he says.
Right now, China is focusing on ensuring that it moves people from the reservoir area without creating dissent or attracting further criticism. The first relocations began in 1994, one year after work on the dam started.
When the reservoir rises, 129 towns and cities and 24,500 hectares of farmland will be flooded. That's caused an outcry from some who will lose their homes.
"We are farmers. Our land is our livelihood," says 52- year-old Nie Guangqing, who grows cucumbers on her farm in Xiufeng Village, about 180km upstream from the dam.
"If you flood it, what will we live on?" At the dam site, construction bustles day and night. The dam's main section will begin to hold back the Yangtze within a year, according to Three Gorges Corp's Wang Jiazhu. The first of 26 700-megawatt turbines will begin to turn in 2003.
"We're under a lot of pressure to get it completed on time," says worker Xu Lijun, 23.
Some scientists say criticism will escalate when the reservoir starts filling in 2003. The reservoir will end in Chongqing about 640km upstream.
Here, the river will slow, dumping mud and rock that some hydrologists say will block shipping and cause floods.
"Chongqing will be overwhelmed by the scale of sediments that they have to dredge out," says James Simpson, professor of geology at Columbia University in New York.
In 1998, the Yangtze carried more than 700 million tonnes of sediment past the dam site. Wang says most will be flushed out each year through 23 gates near the bottom of the dam.
To reduce pollution, the government is closing 7,000 factories along the river. "The pollution along the Yangtze River is very serious, especially in the reservoir area," says Wang Yaoxian, head of the State Environmental Protection Administration's planning department.
China plans to spend a total of 700 billion yuan from this year through 2005 on environmental protection -- about 1.3 percent of its GDP, Wang Yaoxian says.
"It's the lack of transparency that worries me," says Henry Coolidge, managing director of Mirant Asia-Pacific Ltd, a unit of Mirant Corp, one of the largest power producers and energy traders in the US and the owner of stakes in power plants in Guangdong and Shandong.
Even as a member of the WTO, China isn't likely to provide such information. It will be up to investors such as Coolidge to decide whether they can play China's game without knowing all the rules.
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