By Haley Zaremba
Last month the United States made the controversial decision to blacklist one of China’s most significant state-owned nuclear power companies. According to an announcement on the United States Federal Register, China General Nuclear Power Group (CGN) and three of its subsidiaries were placed on the U.S. Department of Commerce’s “entity list”, meaning that CGN will no longer be able to obtain technology, parts or materials from the United States, unless they are able to secure a (very rarely-granted) license to do so.
This move comes in response to accusations that Chinese nuclear power companies including CGN have been stealing United States technology and misappropriating it for military use. CGN is a considerable force in the Chinese nuclear industry, with nine running nuclear power plants with 28 reactors mostly centered around the Guangdong province, making the blacklisting of the company a real blow to the Chinese energy sector. According to reporting by the Asia Times, a U.S. Commerce Department probe “concluded that the advanced US technology and components for civilian use transferred to the Shenzhen-based nuclear energy juggernaut had fallen into the clutches of the People’s Liberation Army.”
While the particulars of the Commerce Department probe have not been made public, it has been reported that the issue likely centers around Small Modular Reactors technology. The compact reactors, built by Pennsylvania’s Westinghouse Electric Company, “could be instrumental to CGN’s partnership with shipbuilding SOEs to trial what is called ‘floating nuclear reactors’ to drift in the South China Sea to light up reclaimed islands and power military installations there” The Asia times goes on to say that “rumors are also rife as to how China can leverage its experience and talent pool of civilian nuclear technology to design and construct its first shipborne reactor to propel the future super-carriers of the Chinese Navy.
Blacklisting Chinese tech and energy giants through the Department of Commerce has become one of the latest weapons used by United States President Donald Trump in his yearlong trade war with China’s Xi Jinping. The U.S. used the same tactic with the massive Chinese telecommunications company Huawei in May, angering Beijing and thereby escalating the trade war. Now, reports the Financial Times, “the Trump administration has heightened efforts to block the export of US technologies to Chinese companies on national security grounds, angering Beijing that has decried the measures and accused Washington of unfair practices.”
The Financial Times article goes on to point out that this most recent blacklisting of CGN is not the first we’re hearing of the United States’ suspicions that China is stealing their technologies for military use. “After a policy review, the US energy department in October last year placed new curbs on exports to China to prevent the ‘illegal diversion of US civil nuclear technology for military’ use,” says the Times. “There would be a ‘presumption of denial’ for new licences and extensions to sell to CGN, the department said at the time, due to a 2016 indictment against the company for conspiring to steal US nuclear technology.”
While the blacklisting of CGN did not come out of left field, however, it has caused considerable outcry in China, where the nuclear industry has pledged to keep moving forward despite what they see as an unfair attack on the sector, while warning that in the end United States companies will be harmed as well.
As paraphrased by the South China Morning Post, the top official at China’s National Nuclear Safety Administration Liu Hua “condemned the U.S. blacklisting of Chinese nuclear firms,” but implied that ultimately China will come out on top, intimating that “U.S. multilateralism and protectionism behind the move would harm the interests of companies in both countries, but could strengthen Chinese firms’ research and development and improve their creativity.”
China has also been sure to point out that they are not reliant solely on the United States when it comes to trade and energy tech, asserting that they have plenty of other friends in high places. The South China Morning Post goes on to say that Liu “also pointed out that the market for nuclear cooperation was wide, and that other countries, besides the US, were already involved in China’s nuclear industry” and that “France and Russia were among China’s nuclear cooperation partners and cooperative projects, including nuclear power facilities and reprocessing plants, were making progress.”
To date, Beijing has denied all accusations of misappropriating nuclear energy tech for military purposes.
By Haley Zaremba for Oilprice.com