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Is US-China trade war becoming 'nuclear'?


Source: Sputnik    Published: 2018-10-30

Christopher Ford, Assistant Secretary of State for International Security and Non-Proliferation told the Financial Times that the US has warned the UK of the risks of nuclear cooperation with China.

Ford added that China may use new overseas projects involving China General Nuclear Power Corporation (CGNPC) to steal technology and enhance its military nuclear capacity.

Sputnik has clarified the situation involving both political and economic motives.

China's contribution to the construction of the UK's first nuclear power plant in the past 20 years, the Hinckley Point C nuclear power station (HPC), has long been the target of attacks by US and European politicians and experts. Earlier, it was clear that business motives and efforts to prevent Chinese rivals from entering the Western market were reasons for that criticism.

It was said that China was preparing to truly expand its nuclear reactor technology, and therefore threatening Western suppliers. CGNPC is only involved in HPC's financing. The French EDF is going to build two units with a total installed capacity of 3.2 gigawatts. China General Nuclear (CGN) is going to invest £6 billion ($8 billion) in the project and thus will receive 33.5% of the plant's shares, while the French company will hold the remaining 66.5%.

Some Western critics say that CGN decided to engage in the HPC construction only to gain access to other UK nuclear power plants projects where China will not only be an investor but also supply its own nuclear power plant technology. This may be the first case of China's reactor technology exports to the West.

In the context of the escalating US-China trade war, the United States has decided to use more heavy weapons and accuse China of stealing technology. According to Ford, the US has evidence that CGN has stolen civilian nuclear technology and handed it over to the Chinese military. The US is claiming that with overseas projects Chinese companies can obtain vital information, and that is a threat to the security of Western countries. Ford has even tried to analyze the logical connection between Chinese contractors and the missiles targeting Western capitals, including London.

Sputnik talked to Liu Ying, researcher at the Chongyang Financial Research Institute of Renmin University of China to find out whether such arguments will impress the British authorities, and whether Washington can effectively influence the Sino-British nuclear cooperation.

"The US pressure on the UK will be a drag on the project, but whether it can affect the Sino-British nuclear cooperation depends on the attitude of the British government. Moreover, this is the three-party cooperation, including Britain, China and France. The UK may increase its control over the project, but it won't necessarily affect its implementation. The three-party cooperation, as well as technology exchanges, is common business practice. So, there's no reason for the United States to accuse China of stealing technology. The US is now interfering with the normal business practices, and even other countries' internal affairs. I believe China and the UK have made all the necessary provisions in the contract, including the intellectual property protection issue, otherwise, the United Kingdom wouldn't cooperate with China. The United States is really worried about China's increasing nuclear power competitiveness; it's also concerned that Chinese companies are challenging the US monopoly in high-tech. Therefore, the US is trying to restrict by all means the cooperation between China and other countries; they're demonizing China's overseas cooperation projects and limiting the country's competitiveness."

The question is now how much the rhetoric will translate into political resolutions. Is it worthwhile to expect the US to adopt some "secondary sanctions" in order to extend these to other countries cooperating with China in peaceful nuclear developments?

"I believe this cannot be ruled out; it's also possible that the US will continue to take similar measures. Moreover, it will further restrict the mergers and takeovers involving Chinese companies. For example, CNOOC's takeovers and mergers in the United States have nothing to do with the high-tech industry and that is a common business practice; but these are still hindered," Liu Ying said.

A few days ago, at the International Forum on Nuclear Non-Proliferation and Export Control held in Abu Dhabi CGN condemned the US for setting limits on the supply of civilian nuclear energy materials and equipment to China. According to CGN, the US government's decisions are "totally inappropriate", and added that the company has the right to "defend its own legal rights and interests." Therefore, Ford's "briefing" for the Financial Times was just a continuation of the already simmering debate.

Liu Ying is a research fellow of China's Chongyang Institute for Financial Studies at Renmin University.

Key Words: CGN   China   UK   Liu Ying  

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