France and China: Nuclear buddies

BY LEE HAN SHIH
Dec 12, 2008
*Special to asia!

France is in the process of sharing some of its nuclear technology with China. The world would do well to take note.

In China more than half a billion people are learning English, but only a handful are learning French. Yet the upcoming presidential election in France has captured the attention of Beijing much more than the imminent change of leadership of Britain's ruling Labour party.

Tony Blair, prime minister of the UK, is a vaguely known entity among China’s population of 1.3 billion. But Jacques Chirac of France is a household name.

Blair last visited China in September 2005 while Chirac has been a regular visitor, paying his fourth (and last as president) call to the Middle Kingdom last October. Blair, as PM but not head of state, met Premier Wen Jiabao; Chirac met Wen in Paris but was greeted warmly by China President Hu Jintao in Beijing.

Britain is the biggest European investor in China, with more than US$15 billion in the country. But this is about to change, fast.

France, under Chirac, has a very practical approach to China. It needs business, especially for its nuclear, transportation, telecommunications and financial services sectors. China needs not only the foreign know-how to get the country going, but it also wants to own the know-how so that it does not have to rely entirely on foreigners. And France is quite happy passing out what it terms as "one step from the cutting edge" technology to Hu and his people.

It is a pragmatic approach. The French know that if they don’t pass the tech to China, other countries, Russia, for example, are likely to do so. They also have the confidence that they have the ability to move far ahead of whatever they have passed on to the Chinese, so that there will be a continual commercial relationship between the two countries.

At a time when Bush and, to a lesser extent, Blair, are talking up a storm (but not doing much) about controlling nuclear proliferation, France is in the process of sharing some of its nuclear technology with China.

France is arguably the country that is most advanced in using nuclear reactors to generate power. China, rising fast in the ranks of industrialised nations, is going the same route. It needs to buy reactors, and Chirac has been pushing hard on behalf of Areva, the French firm, to get business from China.

Senior Areva executives are a constant feature on Chirac’s visits to China. Though both Chirac and Hu are keeping mum on what was discussed between them, an agreement must have been reached for a certain amount of transfer of nuclear technology in exchange for some much-coveted contracts.

Latest news from China suggest Areva will soon be given the job to build two reactors in south-east China, in Guangdong and perhaps Fujian; while rival Westinghouse, now part of Toshiba, will get to build four in northern China, near Beijing.

While it may sound like Areva has got the short end of the stick, a good look at the contract size tells a different story. The contract amount for both companies are roughly the same — Areva’s will go up to US$5 billion while that of Westinghouse is perhaps US$6 billion. However, Areva will work with an upstart, the China Power Investment Corp., which is tasked to break the "monopoly" of the Chinese nuclear reactor industry. This gives it much more flexibility and scope for future jobs than Westinghouse, which, as the saying goes, will operate “under the eyes of Heaven”, with very limited scope for expansion.

Areva will also provide uranium fuel to China, something neither Britain nor the US would do. This, if nothing else, is the result of a "special relationship" between Chirac and Hu, much to the chagrin of Bush and Blair.

 

lee han shihLee Han Shih is the founder, publisher and editor of asia! Magazine.

 

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