China: Westinghouse Leads the Way Into Nuclear Market

With help from the Clinton administration, Westinghouse is wedging its way into China’s nuclear power reactor market, a venue previously closed to U.S. firms because of China’s record of helping other countries build atomic bombs.

In February, during the visit of Energy Secretary Hazel O’Leary to Beijing, Westinghouse signed an agreement to provide two 650-megawatt steam turbines for China’s future Qinshan nuclear power plants. The turbines, which are considered a “non-nuclear” portion of the facility, will be produced in a joint venture with China’s Harbin Turbine Company.

U.S. nuclear exports to China are limited by the absence of a U.S.-China agreement for nuclear cooperation. Such an agreement was signed in 1985 on the strength of a now famous toast in the White House by Premier Zhao Ziyang, who declared that China does not “engage in nuclear proliferation ourselves, nor do we help other countries develop nuclear weapons.”

The accord was never put into effect because of reports that China was giving secret help to Pakistan’s nuclear bomb effort. China has therefore never been eligible for important U.S. nuclear exports such as reactor pressure vessels, control rod systems or primary coolant pumps, all of which are licensed by the U.S. Nuclear Regulatory Commission (NRC). For China to become eligible, the President must certify to Congress that China has not, among other things, helped non-nuclear weapon states acquire materials that would have “direct significance” for the production of “nuclear explosive devices.”

In addition, the U.S. Congress imposed a second ban on exports to China in 1990 as a result of the Tiananmen Square incident. Congress barred a broad range of nuclear exports to China until the President can certify that China has given “clear and unequivocal assurances to the United States that it is not assisting and will not assist any non-nuclear-weapon state, either directly or indirectly, in acquiring nuclear explosive devices or the materials and components for such devices….”

NRC has interpreted the Tiananmen sanctions as barring any export under its licensing jurisdiction that would have a nuclear end-use. The Commerce Department has interpreted the sanctions as requiring a denial of any dual-use item under its jurisdiction going to a nuclear end-use or end-user if the item requires an individual validated license for nonproliferation reasons. Commerce can, however, approve dual-use exports to non-nuclear end-users in China. In fact, it approved the export of nearly $1 billion in dual-use nuclear commodities to China in 1994.

In March, Westinghouse announced that it was expanding its contract with China to include steam generators and reactor coolant pumps for Qinshan. According to the trade journal Nucleonics Week, Westinghouse arranged for these items to be manufactured abroad by its licensees because the components could not be exported from the United States under current law.

The question for the future is whether U.S. nuclear trade with China can increase while China makes questionable nuclear deals with other countries. In 1989, China broke the de facto nuclear supply embargo against Pakistan when it agreed to sell Islamabad a nuclear power reactor. This deal was followed by one with Iran for a 300-megawatt power reactor. In addition, there has been talk of a Chinese research reactor for Iran of roughly the same size that India and Israel have used to produce plutonium for atomic bombs. Beijing is not a member of the Nuclear Suppliers Group (NSG), a 31-nation consortium that has agreed to control nuclear-related exports to proliferant countries.

In late September, the Clinton administration announced that China had cancelled its power reactor deal with Iran, but the Chinese Foreign Minister promptly termed the report inaccurate and said that the sale was only suspended. There is serious doubt whether China can manufacture critical components of the reactor, and whether Iran could pay for a reactor from China after going through with its planned reactor purchases from Russia.