China to build reactors in Pakistan

China to build reactors in Pakistan
By Geoff Dyer in Beijing, Farhan Bokhari in Islamabad and James Lamont in New Delhi
Copyright The Financial Times Limited 2010
Published: April 28 2010 15:48 | Last updated: April 28 2010 15:48
http://www.ft.com/cms/s/0/cf731b28-52d2-11df-a192-00144feab49a.html


China has agreed to build two new civilian nuclear reactors in Pakistan, according to Chinese companies and officials in Islamabad and Beijing, in a deal that could re-ignite the global debate about nuclear commerce and proliferation.

The decision to supply reactors to Pakistan , which has a nuclear arsenal and a record of dealing with North Korea, Iran and Libya, reflects China’s growing diplomatic confidence. It also reflects Beijing’s ambition to become a global supplier of nuclear energy and underscores its view of Pakistan as a prized south Asian strategic partner .

The new deal with Pakistan, which has yet to be publicly announced, poses a dilemma for the US administration of President Barack Obama, which wants Chinese support for new sanctions on Iran but which does want to weaken the Nuclear Non-proliferation Treaty. Non-proliferation is one of Washington’s main foreign policy goals .

China began building a nuclear reactor in Chashma in Pakistan's Punjab province in 1991 and work on a second rector began in 2005 and is expected to be completed next year. Under the new agreement, Chinese companies will build at least two new 650-MW reactors at Chashma.

A Pakistani government official familiar with the discussions with China said on Wednesday: “Our Chinese brothers have once again lived up to our expectations. They have agreed to continue cooperating with us in the nuclear energy field.”

In a statement on its website, China National Nuclear Corporation said that the Chinese and Pakistan governments had signed an agreement to finance the construction of the two new reactors in February. Last year, Shanghai Nuclear Engineering Research and Design Institute said it had been hired to design the two new reactors.

Diplomats in China said they had been told that Beijing has given its formal approval to the deal, although they cautioned that there could still be last-minute hitches in the talks between the two governments.

Officials of two nations that are members of the Nuclear Suppliers Group said they had yet to be formally informed by the Chinese that the supply of new reactors was going ahead.

Mark Hibbs,senior associate at the Carnegie Endowment for International Peace's nuclear policy programme, said that China had decided to go ahead with the deal because “for political reasons it felt Pakistan should be compensated in some way for the US-India nuclear deal ”. The deal between Washington and New Delhi facilitated nuclear co-operation even though India has not signed the NPT.

“After the dust settled on the US-India nuclear deal, China gravitated towards a position that it will support nuclear commerce if it benefits Chinese industry,” he added.

The Obama administration could well not oppose China’s new nuclear deal with Pakistan, Mr Hibbs said, because it wanted to keep Pakistan engaged in Afghanistan and gain Chinese support over Iran’s nuclear programme. He also said the US would find it difficult to oppose China’s support for Pakistan after signing the US-India civil nuclear agreement.

Western diplomats in Islamabad said the US was likely to accept China's growing role as a supplier of nuclear power to Pakistan.

“As long as China is not arming Pakistan with nuclear bombs, this kind of co-operation helps to deal with Pakistan's frustration over not securing a civil nuclear agreement with the US,” said one western official. "It's not a perfect outcome.”

The agreement comes as Pakistan faces long electricity cuts as a result of under-investment in the energy sector. Yusuf Raza Gilani, Pakistan’s prime minister, last week publicly urged Pakistanis not to damage public property in protests against the power shortage.