China Wants the World to Go Nuclear
In the wake of the 2011 Fukushima nuclear disaster, Chairman of the World Association of Nuclear Operators Laurent Stricker suggested that “overconfidence” could undermine the safety of nuclear power plants. While the Chinese nuclear industry may not necessarily be overconfident, its ambition is undeniable: the country has brought nearly twenty reactors online in the past decade and has around two-hundred proposed or planned in an all-out push to reduce its dependence on fossil fuels. And after twenty-five years of developing nuclear power domestically, Chinese companies are now seeking to export their technology abroad. Whether they can do it safely and sensibly remains an open question.
Compared to established nuclear players like France’s Areva, Russia’s Rosatom, and America's Westinghouse (now owned by Toshiba), Chinese companies are relative newcomers to the international market and eager to compete. In 2015, Chinese state-owned enterprises (SOEs) signed important, multibillion-dollar nuclear deals for projects in the United Kingdom, Argentina, Pakistan and Iran. At the end of last year, China’s two main nuclear industry SOEs formed the joint venture Hualong International to promote more effectively the Hualong One, a new Chinese-made “third-generation” reactor design, to international buyers as the industry’s “flagship brand.” In early January 2016, an official from the China National Nuclear Corporation (CNNC), one of the two SOEs behind Hualong International, stated that the company was negotiating exports for the design with twenty countries. In the next five years Chinese companies could invest in or begin building twenty-one reactors overseas, including eight domestically designed models.
Importantly, the total cost of the Hualong One is roughly two-thirds that of American, Japanese or European models, suggesting that the joint venture is aiming to undercut competitors and attract new customers with a more affordable price tag. Although Hualong International is not the only company to market a brand-new third-generation reactor—Westinghouse signed a deal to build its first AP1000 model in China without having previously completed any—it is the first to do so without a significant global track record. Even Westinghouse, which has been building commercial reactors for nearly sixty years, has encountered multiple delays in its recent AP1000 projects. One Chinese nuclear-industry scholar suggested that Westinghouse “oversold the system” and “promised more than [it] could deliver.” A relatively inexperienced company like Hualong International may face similar, and possibly more significant, stumbling blocks when it operates on the global stage.
There are a number of additional safety, security, and financial implications for China and other countries involved as well.