TOPIC OF THE MONTH China’s exports of nuclear technology and reactors to SEA

China ups the ante in nuclear infrastructure and technology output

The Chinese are making assertive overtures regarding expanding their nuclear technologies into Southeast Asia.

The SEA landscape
Both Thai and Malaysian authorities have stated on the record that they are at various stages of talks with Chinese technology suppliers. In April of this year, the China General Nuclear Power Corporation outlined its plans for commercial expansion into Southeast Asia, singling out its relationship with Malaysia. CGN has since established a bricks and mortar base in the Malaysian capital to function as its regional HQ.

China’s calls to “Go Nuclear” are not solely heard by the rapidly developing nation of 30 million, but also by the Kingdom of Cambodia, with the Chinese offering assistance in every aspect from preparing a legal framework for the development of a peaceful use industry to offering scholarships to high-achieving Cambodian engineering students. The state controlled China National Nuclear Corporation, which controls all peaceful and military-related nuclear activities, is showing great interest for control of commercial interests in Southeast Asia nuclear. Apart from Cambodia and Malaysia, Indonesia remains ever-keen, when the time is right, to drive toward nuclear power and Thailand once very interested, shelved plans after Fukushima, but now Southeast Asia’s largest Kingdom, with its rapidly growing desire for energy, particularly green energy, is also talking to the Chinese.

Major jitters over safety
Rare co-operation aside, not all chips are falling the Chinese way. The Vietnamese Atomic Energy Institute is highly concerned about the downstream safety-related consequences of three new plants close to, or relatively close to, the SRV’s frontier with the PRC. The Institute is desperately trying to mitigate risk by encouraging a dialogue with Chinese operators. Vice director of the Institute, Nguyen Hao Quang, is showing concern, saying recently, ““With the very strong nuclear activity in China across the border, checkpoints [need to] be set up in the area to promptly detect any impacts.” The Vietnamese have traditionally sought the established experience of the Japanese and Russians in building their nuclear industry and clearly the panic button has been pushed in SEA’s most mature market by Chinese expansion.

Nuclear expert Mr SP Singh, the retired Head of the Indian Atomic Energy Regulatory Board, Nuclear Safety Division, where he spent 12 years of his long career, shares Vietnam’s concerns, and while there is no doubt that China has made advances in nuclear and started its industry on the right footing by importing reactors and expertise from France 25 years ago before modified them, “The major challenge now is that the Chinese eat into their cost margin by compromising safety. Safety is reduced in order to export technology and this will affect not only the Chinese people but also mainly the people of importing nation.” Singh’s point is a powerful one. Nations keen to import Chinese technology and eventually plants, such as the Cambodians, Malaysians, and perhaps the Thai, are keen to take advantage of the fact that contracts may be half the cost of the French and two thirds the cost of the Russians, however, what risk is hidden I these relationships. “Importing nations need to be careful that these [Chinese] designs still meet international standards. The Chinese have been known to overloaded the reactors. Any nation that considers importing Chinese units needs to make sure that such units meet Generation-3 safety standards.”

Singh admits that all nuclear vendor or export countries have taken the failings of Fukushima into account, including the Chinese. But not everything is yet understood. While the Chinese have made amazing advances in nuclear, Singh and other experts (both inside China and independent) share a concern that the Middle Kingdom is moving too quickly.

Singh’s sobering fear? “Import nations that are very heavily populated with only small ‘safety zones’. Certain Chinese technology – particularly what they export is obsolete. An accident will devastate the immediate area, which will naturally involve relatively densely populated neighbouring regions.” This is certainly the case with Malaysia, Thailand and Indonesia.

Scrutiny and transparency the key
Japanese nuclear expert Professor Akira Tokuhiro, is gentler in his opinions on the Chinese nuclear industry, suggesting that more transparency is needed before the question of safety can be answered. “Detailed information is rarely revealed to the general and/or the educated public. It would be unprecedented and “fearless” if the Chinese designs were, on invitation, subject to safety-in-design review.” The answer, says Tokuhiro, may thus be a question as to whether design details can be or will be made available to a review beyond that already exercised by the IAEA. For instance, the Koreans are undergoing the American NRC review process with their APR-1400 reactor design and the Chinese might also follow suit. This process provides the public and experts an opportunity to scrutinise and ask questions.

Speaking diplomatically, Tokuhiro adds that, “since detailed information is hard to find on Chinese nuclear technologies and also on state of operations, there are expectations that many in the nuclear communities share. It has been said for some years now that a nuclear power plant accident has negative impact on all the nations vested in commercial nuclear power. The Fukushima Daiichi accident is proof of the significance, relevance and impact. He suggests nuclear industries subject themselves to the following:

• Demonstrate a world-class safety culture with international peer review
• Make operational data available via INPO/WANO/IAEA
• Work toward leadership via OECD and other means
• Address perceptions
• Demonstrate risk and crisis management and communications
• “Package” all of the above practices as “best practices”

The steamroller will continue regardless
Chinese-based, American nuclear specialist, Robert Barrett, a partner with PwC in Beijing, is generally upbeat about Chinese technology. He says, that the Chinese are generally very good at what they do and they offer export solutions in nuclear that other nations cannot. “The Chinese offer good technology and good financial solutions – the finance side plays a very important role and Chinese nuclear vendors don’t have to look toward bank financing.” However he does warn that while the Chinese have adopted global design standards and have done a good job with new construction methods, “the devil is in the detail”. “In terms of their internal construction, the Chinese government is somewhat challenged by the fact that safely and SOPs become less pure as nuclear technology reaches the provinces and the central government has some difficulty in making provincial authorities stick to the line.” In terms of exporting their technology, Barrett does note that Chinese vendor need to hire local subcontractors as they obviously know the local market better – Chinese only, can cause safety concerns because they are unfamiliar with the local environment.

Concluding thoughts
While it is clear Chinese export technology in nuclear boasts a lot of positives, transparency is lacking. What is also shown by Vietnamese concerns and highlighted by the issues relating to shaky standards in nuclear in the Chinese provinces, is that technology importers must ensure that these internal challenges do not permeate to the Chinese export market, as then newcomer nations in SEA fully understand the pros and cons when purchasing Chinese technology.