Saturday, April 22, 2006

Chinese civil nuclear plans

The United States Congress passed legislation in 1985 to permit full civil nuclear cooperation with China. The Congress approved this notwithstanding official testimony that China had then been covertly assisting Pakistan's nuclear program. China became a NPT signatory in 1992. The Sino-American civilian nuclear deal was delayed by 13 years. It took effect in 1998 after the Clinton administration lifted the sanctions imposed in the aftermath of the Tiananmen protests.

Reuters had an interesting blurb on the subject datelined April 21, 2006. Chinese leaders view nuclear energy as a counter to increased reliance on hydrocarbon imports, not to mention the environmental pollution in Chinese urban areas. China intends to quadruple civil nuclear capacity by 2020. And yet, this would only provide 4% of Chinese energy needs. Opponents warn of challenges that include waste disposal and the steep cost of new generators.

China had opted to rely on a mix of American, Canadian, French and Russian civil nuclear technology designs. The objective was to keep China up to speed on the latest development in the technology realm in different countries. However, the nine nuclear reactors currently in operation barely contribute 2% of the nation's power today. This is a mere one-eight of the global average. The plan is to raise this to 4% over the next 15 years by building 30 new reactors. Many doubt whether this target could be met given the difficulty in constructing 2 major reactors each year. The reliance on fossil fuels is thus set to remain.

The Chinese are moreover pursuing designs that use less uranium as international uranium prices have tripled since 2004. The financial challenge ahead is daunting and China hopes to tap into the power utilities listed in its share market to help fund the nuclear expansion. This would be an interesting development to watch.


cynical nerd said...

Jaffna: I might add that for the latest contract, China is most likely to choose the American Westinghouse's AP-1000 reactor over France's Areva EPR reactor. Apparently the reason was due to the high level of technology transfer which the Chinese asked - the French did'nt want to part away with their tech knowing that the Chinese might re-engineer the same pretty soon!


Anonymous said...

Thank you for posting this, Jaffna. There has not been any significant analysis of the Chinese agreement or how it compares with the Indian one in India's national media. In fact, the apalling apathy of the Indian media and the casual treatment it has received by intellectual lightweights has astounded me.

The contrast between India and China could not be clearer than this. China took its time, strategized, played hardball and out-negotiated the Americans. Basically, China used the lure of its markets - essentially exercising its rising economic power which continues to impress the Americans over a decade - to end its post-Tianamen international pariah status. China held the carrots and Americans gave up the sanctions stick. Compare this with India : Americans lured India with the false carrot of fake energy secutiry to create a sanctions stick! Shrewd Indian negotiation would have, instead, followed the same strategy as the Chinese. India should have held out the economic carrot - billions of purchasing power on Boeings, arms and nuke reactors - to force entry into the NPT as a full-fledged NWS without any obligations towards IAEA or US Congress thugs. In fact, India had two more levers than the Chinese : the threat of a rising trade with China - China is now the second largest trading partner of India - which could've been used to threaten the Americans, and the huge PR value (for Americans) of getting in bed with a stable democracy that has a large moderate Muslim population.

The proof of poor negotiations is in the results. China : negotaites from 1985 to 1998, and comes out ahead inspite of starting from a weak position of post-Tianamen pariah status and being an evil, oppressive, Communist state. India, on the other hand, gives away the farm inspite of being the subject of a global infatuation at the moment and having everythingn going for it.

The mind just boggles at the stupidity of the whole thing. How can we get into this such a losing situation inspite of having committed more dollars to purchase Boeings and nuke reactors from the Americans than the Chinese!! How much more idiotic can this get?

The implications of this deal are far-reaching. For example, who'll take India's bid to become a permanent member of the UNSC seriously if it's a crippled, second-class, nuclear state? How can India ever negotiate anything favourably from the Chinese or the Pakis without possessing the threat of an overwhelming power to annihilate them with nukes? How credible is a Blue Water Navy without a nuclear submarine fleet against the Chinese force projection?

THe immediate problem is also in foreign policy : America is not exactly the best ally to get in bed with from an international perspective. How much will our opertaing freedom in foreign policy on issues such as accessing Iran's energy resources be curtailed by American influence? For context, China also happens to be largest importer of oil from Iran : they recently signed the world's largest energy deal ever worth about $80 nillion US wherein Iran committed to supply oil to Iran over the next few decades! Did you hear a peep out of the Americans against the Chinese for this deal? No. But India gets slapped around for buying gas or having relations with Iran.

God save us from this mess. Let's hope that US COngresscritters are even more stupid than Shyam Saran and his band of negotiating Indian clowns, and that they will be too dense to understand how good this deal is for the US inspite of Condi Rice trying to drill it into their heads. The delicious irony is exactly this : for once, if the nuclear ayatollahs in Wachington DC succeed in scuttling the deal, they may possibly do the greatest favour to India's interests.

Jaffna said...

Cynical Nerd: Many Thanks for the info. Useful for future posts :-)

Anonymous: Brilliant and thoughtful insights. Thank you for sharing.

Let me refer you to an article published today (April 22, 2006) by Brahma Chellany in the Deccan Herald. Cynical Nerd had alerted me to the piece.

Best regards


Nuclear double standard: India is not equal to China.
Stagecraft & Statecraft By Brahma Chellaney

Two major decisions will come to haunt India in the years ahead. At a time when the future of the crisis-torn, US-led non-proliferation regime looks uncertain, New Delhi has lent full support to it, even though India will never be accepted as a legitimate nuclear power. India will remain a non-nuclear State as long as the Nuclear Non-Proliferation Treaty survives. Furthermore, India has agreed to a formal second-class status in this regime through still-sprouting arrangements under the nuclear deal with the United States. This is best exemplified by its concurrence to international inspections of a kind applicable only to non-nuclear States — perpetual, enveloping and irrevocable.

Having openly accepted an inferior status and pledged support to a regime that has targeted it since its inception, India has undercut its leverage and put itself on a weak wicket. This has important implications for the negotiations that have just begun with the US on a bilateral civil nuclear cooperation agreement and with the International Atomic Energy Agency on India-specific inspections (euphemistically called "safeguards").

Anyone seeking proof of how India is being taken blindly onto a slippery route need look no further than the Prime Minister's own admission in Parliament that because "a safeguards agreement is yet to be negotiated, it will be difficult to predict its content." As an international body operating on the basis of legal instruments, the IAEA will insist on enforcing invasive inspections and a stringent "Additional Protocol."

NPT's credibility today stands severely dented. Yet India has embraced the US fallacy that the NPT can be immutably preserved. More ominously, having railed for years against international discrimination in all its manifestations, including in the form of "nuclear apartheid" as represented by the NPT, India has now willingly accepted discrimination against itself.

Paradoxically, India has begun to sound more Catholic than the nuclear Pope — America — on non-proliferation just when the NPT's problems are becoming acute. The problems have been symbolised not only by the Iran and North Korea cases, but also by the stunning failure of the 2005 NPT review conference to produce any consensus and the non-reference to disarmament or non-proliferation in the final document of the World Summit last September. India should remember what Charles de Gaulle said: "Treaties are like roses and young girls. They last while they last." Some in the West are already calling for reflection on a new, equitable, transparent and truly universal NPT.

America's national-security strategy, however, is pivoted on upholding the NPT regime. Such is the centrality of non-proliferation in US policy that all the major US departments and agencies pursue this mission from different war fronts. America's policy and law will always treat India as a "holdout" to its venerated NPT.

A nuclear deal cannot alter that fundamental reality. Nor can New Delhi become a true beneficiary of a regime whose structures and mechanisms exclude and target India. Even if the deal takes effect, the overly rigorous US export-licensing policy on India is not going to be disbanded. Yet the difference between spin and reality is getting blurred in India. With gushy expectations having overwhelmed reasoned realism, obfuscation has come handy to authorities to mould public perceptions, as negotiations on various fronts compel India to cede more and more ground. The net effect is that despite a zealous public-relations campaign, India is looking less of a nuclear power and more of a non-nuclear State.

The government is now seeking to lock the stable doors after the nuclear horses have bolted. It has widely advertised its reluctance "in preliminary discussions" to accept a unilateral test-ban obligation in the proposed bilateral civil nuclear cooperation agreement — a copy of which was prepared by the US and dutifully accepted by India as the basis of negotiations. In publicising such reluctance, however, New Delhi has made no reference to the fact that Section 1(d) of America's deal-related waiver bill holds India to a perpetual test ban.

Indeed, the Indian foreign secretary has publicly rationalised Washington's use of a waiver bill to enforce seven separate good-conduct conditions on India. Not a single such provision exists in the legislation that brought a comparable US-China nuclear deal into force. Yet the foreign secretary has justified the treatment of New Delhi as less than Beijing's equal on the ground that "China is a nuclear-weapons State" and India is not.

First, this claim is astonishing because the July 18, 2005, nuclear deal is premised on India acquiring "the same benefits and advantages as other leading countries with advanced nuclear technology, such as the United States." Now the foreign secretary is suggesting that the deal's central plank is just a charade, or that New Delhi is discovering the hard way the wide gap between what America promises and what it sets out to do.

Two, the claim misconstrues the legal basis of the US-China accord. China was not even an NPT signatory when the US Congress in 1985 passed legislation to permit full nuclear cooperation with Beijing. A nuclear-weapons State under the NPT is a country that has conducted a nuclear test before 1967 and acceded to the treaty. In 1985, China was merely a de facto nuclear-weapons State, as India is today. It joined the NPT only in 1992. In 1985, it had refused to lend even outside support to the non-proliferation regime. As the top US arms-control official, Kenneth Adelman, attested at that time, China was "a cause for concern" because it had spurned "non-proliferation norms."

Three, the assertion also debunks another premise of the deal — that actual behaviour, not formal membership or hollow commitments, should determine a country's position in the non-proliferation community. New Delhi is now learning that US rhetoric does not translate into reality and that India's spotless non-proliferation record counts for little in securing tangible benefits.

Four, the foreign secretary blithely announced last July that under the deal, India was assuming the same rights and duties as the other nuclear-weapons States, "no more, no less." Now he has become wiser, having discovered "US law" that blocks such no-more-no-less business. For example, he has found "a law in the books of the US for many years" that, according to him, accounts for America's move to rope India into a perpetual test ban through waiver legislation.

What he has left unsaid is that such US law only applies to a non-nuclear State, a status India is assuming willy-nilly. And that there is not one US law but several that could make things uncomfortable for India.

In fact, there are multiple US laws relating just to one issue — a non-nuclear State acquiring or exploding a nuclear device. They include the 1994 Nuclear Proliferation Prevention Act (which defined for the first time in US law the term "nuclear explosive device"); the 1961 Foreign Assistance Act as amended by the 1978 Arms Export Control Act; the 1978 Nuclear Non-Proliferation Act; the 1954 Atomic Energy Act; and the 1945 Export-Import Bank Act. Most of these laws also cover any violation of an accord.

If the deal takes effect, the US President will have to submit an annual report to Congress on India's nuclear-weapons programme under Section 601 of the NNPA. That will put the spotlight on Indian strategic plans, and every technological advance India makes, such as an Agni test, will draw congressional flak. Despite the administration's move to waive Section 128 of the AEA, Congress could still retain oversight to review nuclear exports to India on an annual basis. Reviving memories of the ugly public hearings in the Seventies on fuel shipments for Tarapur, the US Nuclear Regulatory Commission will consider every application to licence an export to India. Such hearings will see the high priests of non-proliferation in full cry.

Even in the best-case scenario, the Indian dream will sour. But by then the Indian dream merchants would have departed from the scene, bequeathing the mess to successors to clean up. To the US, upholding the sanctity of the NPT regime matters more than ensuring that strategic-partner India is treated not less favourably than China. It signed the nuclear deal with China to entice Beijing to join the regime.

The agreement — America's first civil nuclear cooperation agreement with a communist-ruled State — was speedily approved by US Congress despite official testimony that China was covertly assisting Pakistan's nuclear programme, with Chinese technicians still at work at Kahuta. The deal took effect only in 1998, after a sanction imposed in response to China's brutal Tiananmen Square crackdown was waived. President Bill Clinton, in his certification, said the accord's implementation had been delayed for almost 13 years "because of continuing questions about contacts between Chinese entities and elements associated with the Pakistani nuclear-weapons programme."

Now fast-forward to the heady talk in recent months that the US offered the kind of deal it has signed with New Delhi because of India's impeccable record. India has transferred its nuclear technology to no one, yet the US is not willing to grant it any of the favours it accorded China in the 1985 accord — a lax, elastic and unverifiable framework of cooperation.

While that accord specifically excluded the application of IAEA inspections to US exports to China, with Article 8(2) stipulating that safeguards "are not required," the US has imposed on India everlasting inspections that are to extend to more than two dozen indigenous facilities, including power reactors, heavy-water plants, fuel installations and premier research institutions. It has also forced India to agree to what an opaque China will never do — a watertight civil-military segregation of its nuclear programme.

If India is willing to honour the NPT's central provision, despite the treaty's intrinsic inequity, and also vote against Iran at Washington's bidding, why would the US seek to propitiate a country that makes a virtue out of staying on the "right track"? When India is willing to uphold all the norms of a regime that sneeringly regards it as a non-nuclear State, how can anyone realistically expect the US to accommodate New Delhi as a nuclear-weapons State?

When the foreign secretary publicly boasts of New Delhi having assumed "NPT-plus" obligations, is it any surprise that the US insists on India bearing with the burden of its gratuitous responsibilities without securing the real benefits it dreams of? In fact, the Indian attitude only encourages the US to hold India to standards holier than those it accepts.

This is manifest from the unique civil-military separation plan it has inflicted on India, even as it merrily produces tritium for its nuclear weapons in commercial reactors of the Tennessee Valley Authority. It is also evident from its waiver bill holding India to CTBT-plus obligations.

The US is now negotiating a new bilateral civil nuclear agreement with India even before the issues left over by the earlier pact signed in 1963 have been resolved. India faces major safety and environmental concerns over the accumulating spent fuel at Tarapur, with the US refusing to either take back the discharged fuel or allow India to reprocess it under international safeguards.

Imagine a very different situation where India has not extended one-sided support to the NPT regime, and is actually asserting its lawful rights. Instead of planning to squander billions of dollars to import uneconomical power reactors, it has set aside just $1 billion for a crash programme to build an intercontinental ballistic missile. And instead of staying in the "grovelling plus" category, it has quietly begun helping Taiwan to defend itself from China through a nuclear-deterrent shield. In strategic terms, Taiwan is to India what Pakistan is to China. In such a scenario, the Americans would come running to offer New Delhi a deal on India's terms.

The present deal is on US terms and has been designed to ensnare India in a web of capability restraints in order to inhibit its emergence as a full-fledged nuclear power. By pandering to India's weakness — craving for international recognition — the deal is helping to achieve what the decades-old US technology controls could not do.

Anonymous said...

they recently signed the world's largest energy deal ever worth about $80 nillion US wherein Iran committed to supply oil to Iran over the next few decades

Sorry, that shold read "they recently signed the world's largest enery deal ever worth $80 Billion wherein Iran committed to supply oil and gas to China over the next few decades."

Here's the China deal:

This article valued the deal at $70 Billion, but since then the oil and gas prices have skyrocketed so I think that deal may be worth anywhere near $100 Billion today.

Anonymous said...

You know why India went for such a bad deal? Indians do not understand the American psyche at a very fundamental level. Let me paraphrase Larry Ellison who is once reported to have said that not only must he win everytime, his opponent must lose. See this, for example:

America, in general, is just as obsessed with winning every time - and more importantly - trying to ensure that the other side loses. Everything the US does is driven by this singular desire, including flattering India about building it as a democratice counterweight to China. If you ever deal with America, or indeed any American in any context without this fundamental understanding of their nature, you are bound to make just as many costly mistakes as the Indian negotiators did. You can trust a venomous rattlesnake a lot more than the smiling and complimenting American in his suit sitting across the table working a deal with you. Not that they are personally evil : he may be the nicest guy in the evening when you share a drink, but business is business and regardless of the personal relationship with you, he will drive to maximize his gain at the bargaining table.

sneakers180 said...

Thank-you for allowing me to express my opinion-
as one who lives in biggest concentration of PCBs in the world because of Westinghouse (WEC), largely from dumping reject capacitors, I learned about all the manufacturing boo-boos of this company-including the escalator that ate the woman, and defrauding the Filipino people with Marcos, WEC wanted to use experimental technology here to remedy only 6 of perhaps as many as 2000 sites, not even including their contaminated plant property. And they wanted to charge us taxpayers the tipping fees for this incinerator, which would have made us the only Superfund community PAYING the polluter to clean up their mess. Then, of course, I remember helping stop WEC from "cleaning" up Love Canal, because they said we couldn't use Plasma Torch here for their PCB sites because these sites were in soil, and the torch was only for liquid hazardous waste. Funny thing- Love Canal is in soil, too, so I told Lois Gibbs this, and no more WEC cleaning Love Canal. Then, in order to convince another community to let them build and operate an incinerator for them- they told them we just loved our incinerator In Bloomington, Indiana... But it had never been built- which an audience member knew and blurted out. They also pulled out of state nuclear waste dump construction bidding in Illinois because they refused to accept liability.
My point is- I don't trust WEC for anything, and most certainly not with anything nuclear. And, of course, it seems wrong for WEC to share any info with China, especially while Bush is concerned over their military buildup. Bush has no leverage at with China because we now owe them a scary amount of money. Just for the record, I'm opposed to nuclear deals with India, too, and any else for that matter. A Lakota creation story tells that when Creator was making the races, eac was given a responsibility. The White People were given the responsibility of FIRE. Instead of respecting Fire and honoring it for keeping us warm and cooking our food, they disrepected Fire and dishonored Fire by turning it into nukes.... and besides- there is still no solution for equipment/human error or to properly deal with the waste-whic is piling up as fast as unremedied Superfund sites across the USA.
Again- thank-you for allowing me to express my opinion.

Afzal said...

thanks, Sneaker180 - the Lakota story was interesting and all the other information on corporate america - the likes of Westinghouse and Halliburton.

Anonymous said...

isn't Toshiba in talks of buying Westinghouse? It might be interesting to see if the deal goes through. A Japanese company then supplying nuclear reactors/technology to China - fat chance.

Anonymous said...

A nice post on chinese nuclear energy plans deteriorated into a comparison with the india US deal. The two are entirely separate.

Jaffna said...

Anonymous - 5

You are indeed correct that the post itself was a simple narrative of Chinese plans in the field of nuclear energy and that the discussion in the comments thread had moved to the inevitable comparison with the proposed United States-India nuclear deal.

However, the subtext of my post was a bit more devious :-). I had intended as a layperson to question what the entire fuss was about civil nuclear energy when its immediate returns in terms of energy supply were not that apparent. The objective then was to raise issue with the speed at which the proposed United States-India nuclear deal is being concluded.

So the post and the discussion on the comments thread were not unrelated after all.

Best regards


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