Commentary: Why Did China’s $167 Billion Mega-Dam Project Make Such a Splash With Investors?
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The project involves the construction of five cascading power stations along the lower reaches of the Yarlung Tsangpo River, with total investment estimated at roughly 1.2 trillion yuan
A colossal hydropower project on the lower reaches of the Yarlung Tsangpo River broke ground on July 17 in Nyingchi, Xizang, coinciding with the launch of a new state-owned enterprise, China Yajiang Group Co. Ltd., established to oversee the investment.
Approved by the central government in December 2024, the initiative involves the construction of five cascading power stations along the vast river system, with total investment estimated at roughly 1.2 trillion yuan ($167.2 billion).
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- China began a major hydropower project on the Yarlung Tsangpo River in July 2025, with a 1.2 trillion yuan ($167.2 billion) investment and a 10-year timeline.
- The project will increase annual infrastructure investment by about 0.8% and is estimated to boost GDP less than 0.09% per year short-term, or 0.15% long-term annually.
- Market enthusiasm is largely sentiment-driven; the project’s actual economic impact is modest compared to previous large-scale stimulus efforts.
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Who’s Who
- China Yajiang Group Co. Ltd.
- China Yajiang Group Co. Ltd. is a new state-owned enterprise established to oversee the investment in a colossal hydropower project on the lower reaches of the Yarlung Tsangpo River. The project, approved by the central government in December 2024, involves constructing five cascading power stations with an estimated total investment of 1.2 trillion yuan ($167.2 billion).
- China Securities Co. Ltd.
- China Securities Co. Ltd. is mentioned in the article as the employer of Zhou Junzhi, who is identified as their chief macro analyst. Zhou Junzhi provided an analysis within the article concerning the economic impact of the Yarlung Tsangpo River hydropower project.
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What Happened When
- 2017：
- Sector data from this year is referenced for infrastructure investment estimates.
- Since 2018：
- The National Bureau of Statistics stopped releasing industry-level investment breakdowns, only providing total fixed-asset investment figures.
- 2024：
- Estimated total infrastructure investment for the year was around 14.1 trillion yuan and China’s nominal GDP was nearly 135 trillion yuan.
- December 2024：
- The central government approved the colossal hydropower project on the lower reaches of the Yarlung Tsangpo River.
- March 2025：
- The National Development and Reform Commission designated the Yarlung Tsangpo project a key strategic initiative in a report.
- July 17, 2025：
- The hydropower project broke ground in Nyingchi, Xizang, and China Yajiang Group Co. Ltd. was launched to oversee the investment.
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