Snubbed by U.S, Pakistan Making Nuclear Deals With China

by Antoaneta Bezlova

(IPS) BEIJING -- Pakistan's growing nuclear energy needs and its leaders' determination to look to China for investment and know-how in the field are proving an important incentive for the latter's ambitions of becoming a global player in the nuclear power industry.

While China itself is still in the process of seeking foreign help to expand its nuclear sector, government officials have made it clear that their ultimate goal is to build an internationally competitive nuclear power industry and venture overseas.

Using its domestically built reactors, China has already completed a 300MW nuclear power plant in Chashma in Pakistan and is constructing another of the same size there.

During meetings with a delegation of the Chinese Communist Party in Islamabad late August, Pakistan President Gen. Pervez Musharraf sought more Chinese input in the sector, reportedly requesting a series of new plants to help his country boost its nuclear power capacity.

Beijing aims to sign a deal in November that will see China helping Pakistan build six nuclear power plants with an installed capacity of 300MW each. The agreement will be inked during a visit by top Chinese leaders to Pakistan, bringing the South Asian country a step closer to meeting its target of having 8,000MW of nuclear power capacity by 2025.

Pakistan had earlier invited the United States to set up nuclear power plants in the country but Washington's response has been tepid. Although Islamabad has pledged cooperation in the U.S.-led global fight against terrorism, Washington has chosen to reward Pakistan's archrival, India, with a deal to supply nuclear fuel and technology.

The deal with India was ratified by the House of Representatives in July. Despite being tailored for the needs of the civilian industry, experts say it could still allow India to boost its own production of nuclear warheads.

India and Pakistan have fought three wars since they were separated at independence in 1947. In 1987, A Q Khan, the so-called father of Pakistan's nuclear program, declared that any future conflict could be nuclear and in 1998 the two neighbors declared themselves nuclear powers.

In spite of that, distrust between the two countries over Kashmir and terrorism has only worsened and led to an intensified military build up at both sides. Neither country is signatory to the nuclear non-proliferation treaty (NPT).

Relations between Pakistan and the U.S. suffered a setback in 2003 when it was revealed that A Q Khan had helped Iran, Libya and North Korea develop their nuclear programs. Khan has been under house arrest since.

The Khan episode contributed to the U.S. advising Pakistan to look to its petroleum-rich western neighbor, Iran, for its energy needs. At the same time, the U.S. has actively discouraged India from sourcing Iranian gas and all but scuttled a proposed pipeline through Pakistan.

China is now eagerly stepping in, hoping to create markets for its own budding nuclear power industry. Yet, it is doing so with caution and has strengthened its nuclear export controls. "We will spare no efforts to fulfil our international obligations on nuclear non-proliferation and enhance cooperation in peaceful utilization of nuclear energy," Jin Zhuanglong, deputy director of the Commission of Science, Technology and Industry for National Defense, told an international conference in Beijing late August.

China itself is in the middle of an ambitious nuclear-power initiative. The country has unveiled ambitious plans to have four percent of the country's 2020 electricity needs met by nuclear power.

In the current energy mix, nuclear power accounts for less than two percent. To more than double its share in less than 15 years China would need to add at least two nuclear reactors annually, each with a capacity of 1,000MW.

This aggressive push for nuclear growth is driven by escalating energy shortages and ever more pressing needs to keep greenhouse gas emissions, that are linked to global warming, under control.

In March this year, China's State Council approved a blueprint for the country's long-term nuclear industry development, which embraces the nuclear solution as a clean energy alternative. The document sees the expansion of nuclear energy as the most practical option for diversifying from heavily polluting coal-fired plants and Middle Eastern oil.

Initially foreign investors delighted at the prospect of a huge rollout of new plants -- at least 30 by 2020, anticipating how the new expansion would significantly bolster demand for their technology. After all, only three of China's nice nuclear reactors currently in operation were domestically designed and built. Companies from Canada, France, Japan and Russia played an important part in developing the other six.

But with repeated delays in the announcement of the bidding results for four new nuclear reactors in Zhejiang and Guangdong provinces, foreign companies' hopes of cornering a big piece of the action have begun to look dimmer.

The Chinese government planned to announce its decision on choosing a winner among the three leading bidders -- Areva Group of France, the U.S.-based Westinghouse Electric and Russia's AtomStroy, at the end of 2005 but has repeatedly extended the deadline..

As the tendering process drags on, the China National Nuclear Corporation, (CNNC), the country's major nuclear conglomerate, has begun portraying the planned increase of nuclear power generation as a golden opportunity for China's domestic industry to test and improve its indigenous second-generation-plus reactors.

In that case, China could eventually export its homegrown technology, CNNC officials argue, fulfilling the country's ambitions of becoming a global player in the nuclear-power industry.

At an industry forum earlier this year, Chen Hua, a CNNC senior official, argued that the purpose of foreign cooperation is to help China develop its own technology to the point where its nuclear power industry is both self-sufficient and internationally competitive. He called for only two reactors to be awarded to foreign companies in the current tendering process with the other two reserved for domestic companies.

Meanwhile, CNNC has aggressively pursued its agenda of improving the existing technology and venturing overseas. In May, it established a new engineering-construction venture, the China Nuclear Engineering Co., which is to take charge of furthering China's nuclear interests overseas.

"As the newly established China Nuclear Engineering grows, we will participate in bidding for other projects in a wider range of foreign countries," Li Xiaoming, a senior nuclear scientist was quoted by the leading newspaper ÔChina Daily.'

He said that CNNC, which developed the nuclear power reactors in Pakistan based on its domestically built reactor at Qinshan, Zhejiang province, is also in talks with other nations in Southeast Asia to build nuclear power plants.