Marketing drive by China’s State-owned nuclear companies

State-owned enterprises eye overseas power projects, Nikkei Asian Review TETSUYA ABE, Nikkei staff writer BEIJING  5 Jan 16, — The global nuclear industry is likely to be another area where China’s growing presence will be keenly felt, as the government and state-owned corporations are working hand in hand to win overseas contracts. This development worries critics who are concerned about nuclear safety issues, as well as Beijing’s seeming lack of commitment to nuclear nonproliferation.United front  In their meeting on Dec. 30, Sun Qin, chairman of China National Nuclear Corp., and He Yu, his counterpart at CGN, agreed to join hands to better compete with Western rivals in their pursuit to cultivate overseas nuclear power plant markets.

The two came to the National Development and Reform Commission’s building in Beijing on that day to sign an agreement to set up a joint venture. The new company, to be capitalized at 500 million yuan ($76.5 million), will handle export of Hualong One, a pressurized water reactor model that China claims to have developed on its own.

CNNC and CGN, each of which is a major player that ranks within the top three in the Chinese nuclear industry, are coming together with an eye toward increasing the chance of winning orders in Central Asia and Eastern Europe. Their plan fits nicely with Chinese President Xi Jinping’s ambitious “One Belt, One Road” initiative, which aims to develop a massive economic belt that stretches from China to Europe by building social infrastructure. The signing ceremony in Beijing was attended by minister-level Communist Party and government officials, indicating the importance of the agreement.

CNNC and CGN are both state-owned enterprises. The former, which traces its roots to the now-defunct Ministry of Nuclear Industry, prides itself as a leading figure in the development of the Chinese nuclear industry. CGN, based in Guangdong Province, is the No. 1 builder and operator of nuclear power plants in China………

China scored a major victory with the U.K.’s recent decision to import Hualong One. A month later, in November 2015, CNNC secured an export contract with the Argentine government. The fact that the U.K. had embraced the Chinese reactor was said to have helped the Argentinians make their decision, as CNNC was able to use it as proof of the reactor’s high performance.

“We are currently negotiating for exports with 20 countries,” a CNNC official said.

However, not a small number of experts have expressed concerns about Hualong One’s safety. “It is a mishmash of Chinese and foreign technologies,” a Japanese nuclear equipment maker noted. This makes it essential for China to work with advanced nuclear nations to ensure safe operation and establish an adequate inspection regime.

To further strengthen China’s competitiveness, Beijing is rumored to be considering merging CNNC and CGN. Such a move would reshape the country’s nuclear industry into a duopoly between the merged entity and State Power Investment, which has a technology licensing agreement with Westinghouse Electric, the U.S. nuclear power unit of Japan’s Toshiba………

The expertise and track records stemming from building such a large number of nuclear reactors will likely help China win overseas orders. This prospect, however, raises concerns about nuclear proliferation.

Proliferation issues

China has signed the nuclear nonproliferation treaty, but it does not seem to be as keen about ensuring nuclear nonproliferation as other signatories. For instance, China has been actively working with Pakistan, which is not a signatory to the treaty, on various nuclear power plants. But because of Pakistan’s lack of commitment to nuclear nonproliferation, Japan, the U.S and Europe have withdrawn from the nuclear market in the South Asian country. …….

China is also stepping up efforts to win nuclear plant orders in Romania and other Eastern European countries. For emerging economies, Beijing offers a whole package that covers everything from construction and operation of plants to financial support.

“Our primary focus now is to tap the demand in emerging countries, which used to be dominated by Russia,” a CNNC official said.

About China National Nuclear Corp.

The company, which is better known as CNNC, is a giant enterprise that is directly controlled by the country’s State Council. It traces its beginnings to the now-nonexistent Ministry of Nuclear Industry, which single-handedly managed the country’s nuclear weapons development and nuclear power generation projects.

China National Nuclear Power, whose shares are traded on the Shanghai Stock Exchange, is a core unit of CNNC.

Aside from the Qinshan plant in Zhejiang, CNNC has been handling nuclear projects in various provinces, such as Fujian, Jiangsu and Hainan.

CNNC generated sales of 59 billion yuan for the year ended December 2014. The sales amount is at a similar level to France’s Areva, but CNNC employs 100,000 people, slightly more than double the number of workers at Areva and eight times that at Westinghouse.

One Response to “Marketing drive by China’s State-owned nuclear companies”

  1. A Green Road Project Says:

    Reblogged this on A Green Road Daily News.

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