[CHINA] Purchases 4 Nuclear Reactors from US
- Blessed by U.S. Official, China to Buy 4 Nuclear Reactors
By KEITH BRADSHER
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