China National Nuclear Corporation (CNNC) to Work with Westinghouse on Advanced Reactor

The Clinton administration has approved six one-year visas that will allow nuclear engineers from the China National Nuclear Corporation to work on the development of Westinghouse’s most advanced nuclear reactor, the AP-600.

Because the AP-600 project is part of the Department of Energy’s “Advanced Light Water Reactor Program” the U.S. government reserved the right to prohibit certain countries from participating in the project. Only with the consent of the State, Commerce and Defense Departments, in addition to the Nuclear Regulatory Commission and the Arms Control and Disarmament Agency (ACDA), could DOE grant permission to the Chinese. The National Security Council also gave its approval. Officials at DOE cited the action as a reward for China resuming nonproliferation talks, which China had suspended in protest of President Lee Teng-hui’s visit to the United States last year. Westinghouse reports that it has spent a total of about $400 million, of which $63.9 million are federal funds, on the AP-600 program since 1985.

The approval of the visas comes at a sensitive time in U.S.-China relations. China’s repeated exports of proliferation-sensitive technology, in addition to its missile tests around Taiwan, have put U.S. cooperation with China under the microscope. In May 1995, the Risk Report revealed that clandestine shipments of poison gas ingredients were going from China to Iran, and in February of this year major newspapers reported the transfer to Pakistan of Chinese ring magnets, equipment needed to enrich uranium for use in atomic bombs. The 1994 Nuclear Proliferation Prevention Act authorizes the President to halt Export-Import Bank financing if a country like China assists other countries in developing nuclear weapons. There are about $10 billion in loans for Chinese projects now in the Ex-Im Bank pipeline.

China acknowledged that it exported the magnets to Pakistan but maintained that it had done nothing that violated the Nuclear Nonproliferation Treaty (NPT). China also refused to rule out future sales of sensitive technology. If the Clinton administration were to impose sanctions against the China National Nuclear Corporation, the action could jeopardize contracts held by Westinghouse and Bechtel totaling about $800 million. As the Risk Report went to press, the administration had made no decision on sanctions but had persuaded the Ex-Im Bank to suspend action on loans concerning China pending negotiations.

Western business interests perceive China as one of the biggest emerging markets in the world. U.S. Energy Secretary Hazel O’Leary and late U.S. Commerce Secretary Ron Brown both traveled to China in 1995 with American business leaders to witness the signing of agreements worth billions of dollars.