Xiaonanhai Dam was proposed on the Yangtze River in Chongqing, China according to the “Plan for the Comprehensive Utilization of the Yangtze River Basin” (1990). The feasibility study was approved by the Water Resource Department in Sichuan Province (Chongqing was a municipality in Sichuan Province before it became one of China's four direct-controlled municipalities since 1997 March) in 1991 and the report on the feasibility study was approved on 1993 by the same department, and later the draft technical design of the project was approved in December 1996. In July 1997, the Provincial Planning Commission approved the construction and investment plan for energy and electricity supply. The project firstly started in December 1997; however, it stopped the first time in 1998 due to lack of funds. 
Since the early 1990s, economic and environmental concerns have repeatedly delayed proposed plans to build dams on this section of the Yangtze River. However, Chongqing has been pushing the Xiaonanhai Dam onto the agenda since 2005. In 2006, the Municipal Government signed the contract with China Three Gorges Corporation. In September 2006, an expert group conducted technical consultation on the measures to mitigate the impacts of Xiaonanhai Hydropower Project including the site selection of the dam, the layout of the buildings in the hydron-junction, and the diversion and closure of rivers. It was reported that the construction of the dam will result in many negative impacts on the ecological landscape, the aquatic ecosystems and biodiversity along the Yangtze River. In February 2009, the Ministry of Agriculture organized an expert panel to review the “Special Report on the Impact of Xiaonanhai Hydropower Project to Preferential Rare Fish Species in the National Nature Reserve and the Countermeasure”. The expert panel recommended further complementary research and investigation about the adverse impacts.
Xiaonanhai was added to the list of key projects for the12th Five-Year Plan (2011-2015) Chongqing municipal government under the leadership of laterly deposed Party Secretary Bo Xilai. The municipal government saw the potential boost for GDP growth, job creation, taxation and other revenues that Xiaonanhai would bring, but failed to pay attention to the public interest and environmental responsibility. Sacrificing the public interest in environmental health, the Chongqing Municipality follows a development model that is neither sustainable nor economic for its citizens. 
As the third largest river in the world, the Yangtze River is home to many important freshwater aquatic species and ecosystems. However, attempts to make way for hydropower development have repeatedly reduced the size and degraded the quality of this haven for aquatic life. Many critical fish species have become endangered since the construction of the Gezhouba and Three Gorges dams. In order to mitigate the impact from dams and protect the habitats of rare and endemic fish species in the Upper Yangtze River, a provincial nature reserve was created in 1997 along the Hejiang to Leibo course of the Upper Yangtze. It was given national status in 2000. 
The nature reserve consists of core, buffer and experimental zones. The core and buffer zones are essential for fish survival. In 2005, the boundary of the reserve was modified, in order to develop two very large-scale hydropower plants – Xiangjiaba (6400 megawatts) and Xiluodu (13,860 megawatts). The reserve was reduced in size and moved downstream from the section immediately below the Xiangjiaba Dam in Yibin to the tail end of the Three Gorges Reservoir in Chongqing. The Chishui Tributary of Yangtze, as well as the Yibin to Yuebo section of the Min River, were added to the redrawn reserve, and the whole area was renamed the Upper Yangtze Rare and Endemic Fish National Nature Reserve.
After the modification, the State Environmental Protection Administration (now the Ministry of Environmental Protection, or MEP) clearly stated, “The modification plan should proceed according to the State Council approval opinion. It should be made clear both in revised plans and during construction that no new hydropower project is to be developed in the modified nature reserve.” However, another modification proposal was brought up in 2010 to allow for the Xiaonanhai Dam. It was approved by the National Nature Reserve Review Committee and was announced by MEP’s public circular no. 1 in 2011.
The 22.5 km river section downstream from the Xiaonhanhai hydropower station will be removed from the protection zone, while a 73.3 km section above the dam has been downgraded from a buffer zone to an experimental zone to become a reservoir for Xiaonanhai. This will have fatal consequences for the aquatic ecosystem of the Upper Yangtze River and destroy the essence of the nature reserve. To make matters worse, plans to build two other dams immediately upstream from Xiaonanhai, Zhuyangxi and Shipeng, will turn the entire upper Yangtze mainstream into an inter-locking series of cascade reservoirs. 
Cao Wenxuan from the Institute of Hydrobiology has said that the aquatic ecosystems of a 600 km stretch of the Yangtze has been significantly changed by the Three Gorges Dam, with reduced habitats and breeding conditions for the rare Chinese paddlefish, Dabry's sturgeon and the Chinese banded shark, as well as over 40 unique species. [...] The reserve is the only stretch of the upper Yangtze offering a suitable habitat for these fish, [yet] the site for the Xiaonanham Dam will submerge one fifth of the length of the Yangtze within the reserve. According to Cao, water management projects which change the aquatic ecosystems of the reserve are illegal .
In a little-noticed ruling made public on Dec. 14, 2011, the council approved changes to shrink the boundaries of a Yangtze River preserve that is home to many of the river’s rare and endangered fish species. The decision is likely to clear the way for construction of the Xiaonanhai Dam. 
The early preparatory work for the Xiaonanhai hydropower project on the Upper Yangtze River started on March 29, 2012 despite wide criticism from experts and the general public. According to the Chinese geologist Fan Xiao’s “Open Letter on the Protection of Upper Yangtze Rare and Endangered Fish Species and their Ecology” from Chinese civil society documents and from Chinese and international media, the construction of the dam would result in huge environmental and social impacts.
Although conducting an Environmental Impact Assessment (EIA) before any hydropower projects is legally mandated in China, construction of hydropower development projects often start even before a full EIA report is approved. This is because early preparatory work, also known as santong yiping (site preparation stage, which includes access to water supply, electricity and roads, as well as land leveling) can start before a project EIA is approved. An EIA report for the santong yiping stage is required, but is often done superficially, only to show compliance with the process. On February 22, 2012, the Chongqing government announced on its website that public comments for the santong yiping work of Xiaonanhai could be submitted between February 23 and March 3. On March 2, a second announcement was published with the finished Santong Yiping EIA report. It was clear that the EIA report was hastily done for the construction work to start as soon as possible. As many previous examples have shown, although no project EIA for Xiaonanhai has been approved, once “early preparatory work” has been done, investment may be so significant that the dam cannot be stopped. In many cases, the dam construction may be almost finished at the end of the “preparatory work”. 
On March 31, 2012, an open letter from the Chinese environmental NGOs was addressed to Premier Wen Jiabao and Vice Premier Zhang Dejiang to call for an immediate stop on the unsustainable Xiaonanhai Project (Pre-construction Preparation). The ENGOs call for the suspension of the Santong Yiping construction of the Xiaonanhai Hydroelectric Project to reevaluate the Pros and Cons, hold citizen hearings, taking sufficient measures to maintain the integrity and ecological function of nature reserves. It was also indicated that “A series of alternative plans are worth considering in meeting the electricity demand in Chongqing. Establishing a cooperative and sharing relationship between Chongqing and the Three Gorges Corporation on the four dams on the lower Jingsha River is a viable solution.”
In March 2015, two mayors from the Luzhou City and Yibin City along the upper reaches of Yangtze River in Sichuan Province unequivocally expressed their opposition to the Xiaonanhai Project built in Chongqing during the annual meetings of NPC and CPPCC.
In April 2015, The Ministry of Environmental Protection said in a document sent to the Three Gorges Project Corporation to authorizing the Wudongde dam stated that: “In the last 10 years, two investigations have been carried out into construction in precious and unique national protection zones for fish in the lower reaches of the Jinsha river, and the structure and function of the zones have already been heavily impacted... Your company as well as other units cannot plan or build the Xiaonanhai hydropower plant.”
Environmental NGOs who have worked on this for six years welcome the news but are still worried since it is hard to say whether this is a one-off victory or a symbol of things to come. The “construction-suspension-restart of construction-block of the project” also affected the villages since many of the submerged areas indicated in the proposal were stopped for any new construction works since 2006, many villagers are living in dilapidated houses for a long time but they were not allowed to rebuild their houses because they are supposed to migrate to other areas due to the dam project.