Dr Matthew Cottee research associate, Non-Proliferation and Nuclear Policy Programme at the International Institute for Strategic Studies. China is using infrastructure exports to build strategic relationships with a range of countries in Asia, eastern Europe, the Middle East and Latin America. As part of its One Belt One Road (OBOR) policy, Beijing has pledged more money than went into the post-war Marshall plan on high-speed rail schemes around the world in an effort to secure diplomatic allies and develop new markets. The economic and diplomatic impact of its massive investment, however, remains questionable. This trend of geopolitically motivated investment is also be reflected in another one of Beijing’s strategic investment efforts: nuclear energy. Although its scale is not yet comparable with the rail projects, China has signed numerous agreements with states in the OBOR sphere as well as those further afield. Chinese companies are constructing reactors in Pakistan and Romania. China is scheduled to build nuclear facilities in Argentina, the UK and Iran and is bidding for further projects in Turkey, South Africa and Saudi Arabia. Framework agreements and discussions about reactor deals are under way in Kenya, Egypt, Sudan and Armenia. By providing technology, Beijing seeks to develop alliances with key states in a variety of regions. It aims to provide long-term contracts to construct, operate, maintain, provide fuel, train staff, and develop infrastructure while establishing links to high-level government representatives. But will nuclear exports prove any more influential and successful than high-speed rail? Factors beyond Beijing’s control may also influence the success of its nuclear export strategy. Global interest in nuclear energy is experiencing a lull, prompting valid questions about China’s decision to invest in such technology as a long-term export market. Environmental consciousness is one reason for reducing reliance on nuclear energy. Political decisions in South Korea and France – two key proponents of nuclear energy – highlight this evolving trend. In Seoul, In November 2015, China National Nuclear Corporation invested $4.7bn in Argentina’s Nucleoelectrica. In the UK, China is to provide 33 per cent of the estimated Â£20bn for the Hinkley Point C project. In exchange, Beijing has been promised the opportunity to build its indigenously developed nuclear technology in Essex. The open question is whether such investment will eventually pay off. The various setbacks to traditional nuclear energy providers, namely Areva, Toshiba and Westinghouse, suggest that market competition is dwindling. South Korea’s proposed diversification away from nuclear will also have significant ramifications for its nuclear export industry, given the key role government support plays in getting contracts agreed. Time will tell whether these developments represent an opportunity or a forewarning for China’s grand nuclear ambitions.
FT 2nd Aug 2017 read more »