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[CHINA] Purchases 4 Nuclear Reactors from US

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  • madchinaman
    Blessed by U.S. Official, China to Buy 4 Nuclear Reactors By KEITH BRADSHER http://www.nytimes.com/2006/12/18/business/worldbusiness/17cnd- nuclear.html?
    Message 1 of 1 , Dec 17, 2006
      Blessed by U.S. Official, China to Buy 4 Nuclear Reactors

      HONG KONG, Dec. 17 — China will buy four Westinghouse nuclear
      reactors in a deal that shows the continued attractiveness of
      American technology, but may also stir worries in Washington that the
      United States is selling its competitive advantage one industry at a

      Energy Secretary Samuel W. Bodman of the United States and Ma Kai,
      the minister of China's National Development and Reform Commission,
      signed a memorandum of understanding for the reactors in Beijing on
      Saturday. The deal calls for the state-owned China National Nuclear
      Corporation to buy the reactors from Westinghouse Electric, which the
      Toshiba Corporation, based in Tokyo, bought earlier this year.

      Neither side announced a value for the reactors. But outside analysts
      have suggested the total price tag may be $5 billion to $8 billion.

      Michael R. Wessel, a commissioner of the United States-China Economic
      and Security Review Commission, which was created by Congress to
      review bilateral relations, expressed concern on Sunday that based on
      the broad outlines of the deal, "it appears they are doing what other
      companies have done, which is to transfer the technology upfront."

      Such deals limit the long-term benefits to the United States, while
      clearly helping China, he said. Chinese companies have been acquiring
      technology from Western companies in the last year for everything
      from aircraft assembly to car design and engine manufacturing.

      China's purchase of American nuclear technology could also stir
      security concerns in the United States, particularly after objections
      in Congress last year to a bid by Cnooc, the Chinese-controlled oil
      and gas company, for the United States oil company Unocal, and this
      year to DP World, of Dubai, taking control of operations at American
      ports. Both bids ultimately failed.

      But having a Bush cabinet official like Mr. Bodman announce the deal
      could limit objections to the transaction, at least among Republicans
      on Capitol Hill, who have tended to be the most outspoken about
      technology transfers to China. The deal also comes after Congress has
      adjourned for the year, which should mute political reaction.

      American politicians may also be cautious about publicly criticizing
      the deal right away because of the possibility of an unspoken link
      between the nuclear technology deal and efforts by Treasury Secretary
      Henry M. Paulson Jr. to persuade China to allow faster appreciation
      of its currency.

      Stephen R. Tritch, the chief executive and president of Westinghouse,
      said in a statement that half the value of the contract would be done
      in China, but that the work would nonetheless support 5,000 design,
      engineering and manufacturing jobs in the United States. Mr. Tritch
      said that the deal would also make it possible, however, for China to
      build future nuclear reactors with less help from overseas.

      "Westinghouse, our U.S. supplier base and our consortium partners
      will continue to benefit much as we do now in the Republic of Korea,
      where recent new plant awards from that country's maturing industry
      still provide about $100 million per plant in U.S. scope," he said.

      Mr. Bodman said at the signing ceremony that "the Chinese were very
      demanding." But he did not elaborate on whether he was referring to
      the extent of technology transfers, frequently a sticking point in
      the past, or to other issues.

      Vaughn Gilbert, a Westinghouse spokesman, said that the company had
      successfully licensed technology to France for many years and
      believed that it could properly manage the transfer of technology to

      Thomas Donnelly, another member of the United States-China
      commission, said that civilian nuclear reactors had little military
      value for China, which has greater interest in miniaturizing its
      nuclear warheads and improving missile technology.

      Westinghouse prevailed in the bidding over Areva of France and
      AtomStroyExport of Russia. China excluded General Electric because it
      makes boiling water reactors, instead of pressurized water reactors.

      Ruth A. Shapiro, the executive director of the Asia Business Council,
      said that China was in an excellent position to play multinationals
      against each other to obtain the most advantageous terms.

      "We can be sure all of them offered great deals, given how
      competitive the supply side is and how thin the demand is," she said.

      Westinghouse and its rivals still have a chance at further orders.
      The International Energy Agency predicted last month that China's
      nuclear power generation capacity would increase by 9,000 megawatts
      by 2015, to 15,000 megawatts. The four reactors announced on
      Saturday, which are to be completed by 2013, will each have a
      capacity of 1,100 megawatts.

      The transaction is not big enough to make much of a difference in
      China's contribution to global warming or air pollution, as China's
      reliance on coal will continue to dwarf its use of nuclear energy in
      the years ahead, energy specialists said.

      The International Energy Agency projects that China will add 331,000
      megawatts of coal-fired generating capacity by 2015, for a total of
      638,000 megawatts. That is the main reason China is expected to move
      past the United States in 2009 as the world's largest emitter of
      carbon dioxide, the main global warming gas.

      Mr. Bodman announced separately in Beijing that the United States
      would work with China to find ways to make coal-fired plants more
      efficient, and to capture and store the carbon dioxide that they
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